Bureau De Change (BDC) operators in Nigeria have accused fintech companies and other online firms of diverting diaspora remittances to the country.
The Central Bank of Nigeria (CBN) had earlier this month, attributed the crash of the naira against the dollar and its inability to manage the foreign exchange market to the diversion of diaspora remittances to the unofficial markets, including the parallel market.
Acting CBN Governor, Folashodun Shonubi, had said many diaspora remittances came to Nigeria in dollars and were not documented officially, as they end up in the parallel market.
President of the Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadebe, admitted that most transfers conducted by the International Money Transfer Operators (IMTOs) had been diverted and were not being tracked.
According to him, most of the funds were diverted to unofficial markets including some unlicensed online firms.
“We had a meeting with the banks where we even tried to bring up the issue of diaspora remittances so that we can harness it and bring liquidity, but they said they don’t see it. That’s the truth of the matter, a lot of unlicensed online firms are in the process.
‘’It’s not in the official market, it’s not even in Nigeria, it’s not even coming, that is the truth of the matter, It’s being left abroad to be financing the 41 banned items and other illegal speculation holding activities. People are sending money but the thing is that it is not coming through a regulated and official channel,” Gwadabe said.
He admitted that there were some BDCs that were receiving but not officially reporting receipt of diaspora remittances, but said together with the CBN operators were being sensitised and anyone found would be summarily dealt with.
“The CBN has changed the format on how you will send your returns, adding some other features to those returns we had been sending before. They have realised that some licensed BDCs are operating yet they will say they are not operating, hiding the fact that there are no interventions by the CBN, they are saying no transactions and sending nil returns to Central Bank.
‘’Central bank has discovered that and they have done sensitisation exercise where they have introduced other information that will be needed from every BDC.’’
On the accusation that diaspora remittances are diverted to fintechs and some other channels other than the official forex window and even the parallel market, Gwadabe, citing the example of Binance, said, “These are borderless platforms, they don’t have borders, they don’t have offices, you don’t even know where they are, are they operating in Kenya, South Africa, Nigeria or Ghana.
‘’They just don’t transfer money through an agent, there are a lot of online platforms that are being advertised in all these places where we have Nigerians and they are highly speculative, sometimes their rates are even higher than what is obtainable in the parallel market.’’
He advocated stiffer penalty for such market players, saying there should be an enabling environment for the licensed players.
“Don’t limit the BDC business model only to traditional cash model, allow them to evolve, give them the enabling environment, create competition, create transparency, so that way we will deepen the market,” he added.