CBN Urges Banks to Innovate for Diaspora Market, Tackle High Remittance Fees

The Central Bank of Nigeria (CBN) has called on commercial banks to step up their efforts in creating and managing financial services tailored to Nigerians living abroad, while also working to significantly reduce the cost of remittances into the country.

Speaking at a post-Monetary Policy Committee (MPC) media briefing in Abuja, CBN Governor Olayemi Cardoso emphasized that the current average remittance fee of 7% is too high and poses a major barrier to trust and financial inclusion. He noted that reducing this cost is essential to unlocking the full economic potential of diaspora inflows.

“This issue is a priority,” Cardoso said. “I raised it directly with the World Bank President during the recent Spring Meetings. We are now actively exploring ways to lower these costs through regulatory innovation and strategic collaboration.”

Cardoso highlighted that one of the CBN’s approaches is to scale up transaction volumes using digital platforms and reform frameworks, which would help drive down costs over time. He also cited ongoing cooperation with the Nigerian Regulatory Bank Verification Network (NRBVN), which has streamlined identity verification and eased remittance processes for Nigerians abroad.

“However, the Governor stressed that cost reduction alone won’t solve the deeper issues. He said enhancing Know Your Customer (KYC) protocols and working to remove Nigeria from the Financial Action Task Force (FATF) grey list are vital for rebuilding global confidence in Nigeria’s financial system.

“Trust is essential,” he added. “We are currently partnering with the Nigeria Inter-Bank Settlement System (NIBSS) to create a stronger, more secure identity verification structure.”

Cardoso also acknowledged the longstanding lack of diaspora-centric products within the banking sector. He said that while many banks have shown interest in developing such offerings, progress had been stalled by bureaucratic and technical challenges — obstacles which have now been addressed.

Referencing a successful CBN-hosted diaspora banking forum in Houston, Texas, Cardoso noted that the event marked a turning point. It sparked renewed commitment among Nigerian banks, several of which have since begun rolling out tailored products for diaspora customers.

The CBN’s ambition, according to Cardoso, is to increase monthly diaspora remittances to at least $1 billion. He revealed that inflows have already jumped from around $200 million to over $600 million in recent months.

“This is proof of what’s possible when we remove barriers,” he said. “Countries like India and Pakistan have achieved this. Nigeria can do the same.”

He concluded by reiterating the CBN’s role as a facilitator, not a competitor. “We’ve removed the roadblocks. It’s now up to the banks to take the lead. The rewards will benefit not just them, but the Nigerian economy as a whole.”