Nigeria’s Fintech Rules in Question as Cleva Secures IMTO Licence

Nigerian fintech startup Cleva has officially obtained an International Money Transfer Operator (IMTO) licence from the Central Bank of Nigeria (CBN), allowing it to facilitate inbound international money transfers. This milestone reinforces Cleva’s mission to simplify cross-border transactions for Nigerians.

In a blog post, the company highlighted its commitment to breaking payment barriers, stating, “Cleva is on a mission to eliminate payment barriers for Nigerians, and this new licence reinforces our commitment to making cross-border transactions as effortless as possible.”

CBN’s Stance on IMTO Licences Remains Unclear

Despite Cleva’s approval, regulatory uncertainty clouds the fintech landscape. Under existing CBN guidelines, IMTO licence holders can process inbound transfers but are restricted from handling outbound transactions. Additionally, all inbound remittances must be paid out in Naira.

However, a directive from January 2024 explicitly prohibited fintechs from offering IMTO services. Cleva’s recent licence raises questions about whether the ban will be enforced or if fintechs with prior approvals will be exempt.

“There are two grey areas. One, [the] CBN has not come out to define what a fintech is. Secondly, there are fintechs that went ahead to get IMTO licences before this ban, and we don’t know what is going to happen to them. These two grey areas are not allowing people to come to a decisive conclusion on [the] CBN’s standpoint.”

Cleva’s Growth and Future Prospects

Founded in 2023 by Tolu Alabi and Philip Abel, Cleva provides Nigerians with USD accounts for receiving payments from abroad. The platform enables users to open accounts using their Bank Verification Numbers (BVN) and government-issued IDs, convert USD to local currency, and transfer funds to Nigerian bank accounts. It also offers a virtual USD card for global transactions.

The fintech has gained traction among freelancers, remote workers, and businesses needing seamless dollar payments. In 2023, Cleva joined Y Combinator, and in January 2024, it raised $1.5 million in pre-seed funding led by 1984 Venture, with participation from FirstCheck Africa, Y Combinator, The Raba Partnership, and Byld Ventures.