A solution to the IMTOs-Nigerian Banks Integration challenges following CBN US Dollar policy

The remittance business landscape in Nigeria is undergoing major infrastructural changes since the adoption of the Central Bank of Nigeria’s new policy on US Dollars on December 4th, 2020. The good intentions of the CBN as regards the policy are evident in its potential to increase the US Dollar supply into Nigeria, which would further strengthen the economy.

The new rule required Deposit Money Banks (DMBs) to close their Naira ledgers as remittances would be paid in US Dollars or into domiciliary accounts of recipients. This discourages diversions of remittance inflow meant for Nigeria, through unaccounted channels. In 2019 alone, the World Bank placed personal remittances to Nigeria at $23.806 billion. Although this decline in 2020, ‘no thanks’ to COVID-19, PWC predicts Nigerian remittance to hit nearly $30 billion in 2021! Now add these figures to the massive, unaccounted remittances flowing into Nigeria annually, and you get the sizable returns CBN policy tries to clamp down.

IMTOs – DMB Integration challenges


resolving the IMTO-DMB issue

On the surface, the new monetary regulations are a brilliant move by the CBN. Statistically, it would provide for proper accounting of foreign exchange inflow in Nigeria. However, going deeper into the infrastructures needed to achieve this picture, we begin to find certain systematic clogs that if not resolved, would hamper the smooth sailing of the system. In particular, IMTOs need to integrate with all DMBs in Nigeria before they would be able to process US Dollars into Nigeria.

This is a gigantic problem for many IMTOs given the scale of infrastructure needed to integrate with banks – the legal as well as the technical processes. Time constraint poses another challenge. For a market size as large as that of Nigerian remittance, timely adoption of policy changes significantly affects the bottom lines of both IMTOs and several players within the remittance space. Therefore they face the risk of losing a part or all of their markets. Not necessary to larger competitors who already upgraded their systems to comply with CBN regulations, but also to orthodox means of shipping the Dollar into Nigeria.

Nigerians in Diaspora are not entirely unaffected by this problem. The convenience of sending money to any Nigerian bank would be gone if their money operator fails to integrate with the banks. We have to picture the scene of too many remitters seeking a few IMTOs with comprehensive integration. A drop in remittances into the country might seem too far off, but a slow down of the speed of remittance is inevitable.

The Solution

To boost remittance inflow, improve the balance of payment position, reduce dependence on external borrowing and mitigate the impact of COVID-19 on forex inflows into Nigeria, the CBN policy is right on spot. All it needs is the assistance of unique remittance technologies to eliminate technical issues – such as the integration hunch – sitting at the core of the system. Why? Because technology is cheaper and easier to administer and accelerates whole processes. This is where the Songhai Exchange platform comes in.

The Songhai Exchange Platform


Songhai Exchange Logo

The Songhai Exchange platform is the remittance technology easing the current friction within Nigeria’s remittance ecosystem. Songhai Exchange (SHE) is an Africa-centric Switch facilitating a pan-African network of financial service providers and institutions to make remittance into and across Africa seamless and affordable. 

The SHE platform is simply a technology designed for IMTOs to make integration with all Nigerian banks possible just from the click of a few buttons. This is possible given SHE’s extensive integration and partnerships with all local banks. 

So, instead of running the hassle of integrating with every Deposit Money Bank in Nigeria, IMTOs need only integrate Songhai Exchange as their payment Switch to enjoy this access. It eliminates technical hardship for IMTOs, solves their integration problem, and saves them time while at it. SHE is totally compliant with CBN regulations, and as such, IMTOs need not worry about compliance once they integrate the Switch.

Instant US Dollar Domiciliary Account Creation



Through the Auto-Account Creation and Payment Redirect feature built into the SHE platform, IMTOs can process US Dollar transfers to recipients in Nigeria with zero hassle. SHE creates instant US Dollar domiciliary accounts for beneficiaries, on request, riding on the Nigerian bank KYC of beneficiaries. Remitters can then opt for payment to be immediately processed to the newly created account or for the US Dollar account details forwarded to them for later payment. IMTOs have total control of this feature, and with a few clicks can decide whether to process US Dollars to Nigeria or not.

Aside from solving the integration problem, Songhai Exchange’s business relationships with banks across the globe enable the platform to facilitate the liquidity needed by IMTOs to complete large international transfers, especially commercial remittances (B2B) – from sourcing to shipping to delivery – operating completely within the monetary guidelines laid out by the CBN. This, along with the other facilities provided by the SHE platform, makes the technology the bespoke solution needed at the heart of Nigeria’s remittance ecosystem.

In summary, below are the values the Songhai Exchange platform brings to the Nigerian remittance space:
Ø By bridging the gap between IMTOs and DMBs, the Songhai Exchange platform eases the burden of comprehensive integration with all Nigerian banks, faced by IMTO. Banks benefit from this also as the process required to integrate IMTOs into their system is significantly reduced. A greater part of the integration process is shouldered by the Songhai Exchange platform, saving both banks and IMTOs, time and money.
Ø The speed of remittance inflow into Nigeria is enhanced, given the easier integration process facilitated by SHE. The fact that the platform creates US Dollar accounts INSTANTLY without further documentation or processes also adds to this. IMTOs only require the Nigerian bank details of recipients from remitters. Nothing more. It saves time on money transfers.
Ø The Songhai Exchange platform works to accelerate the vision of the CBN. Its integration and liquidity solutions contribute to the boosting of remittance inflow which in turn reduces the need for external borrowings just to strengthen the economy. Songhai Exchange platform’s solutions equally mitigate against unsafe remittance channels which would be the last resort of Nigerians in Diaspora, if they are not able to conveniently send money to any Nigerian bank of choice back home.

Songhai Exchange is a pan-African network, which means one integration not only gives IMTOs access to all Nigerian banks but also access to financial service providers, institutions, and networks across Africa. The Switch is easy to use and navigate, with an award-winning support system spread across the globe.

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