The Nigerian Inter-Bank Settlement System (NIBSS) is poised to launch a non-resident Bank Verification Number (BVN) platform by December 2024, a groundbreaking move aimed at enabling Nigerians in the diaspora to operate local bank accounts, run their businesses, and resolve Know Your Customer (KYC) requirements from any part of the world.
This initiative marks a significant step in easing the difficulties non-resident Nigerians face in accessing banking services back home.
This development was announced by the Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, during a meeting with the Nigerian community in Washington, D.C., on the sidelines of the World Bank and IMF annual meetings. Cardoso highlighted that the initiative is part of broader efforts to facilitate the involvement of Nigerians abroad in the Nigerian economy, particularly by removing the hurdles associated with KYC verification and other banking challenges.
Tekedia Mini-MBA edition 16 (Feb 10 – May 3, 2025) opens registrations; register today for early bird discounts.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
“As far as we are concerned, it is totally unacceptable that you should be out here and be having hassles in operating your accounts or doing your business in your original country,” Cardoso stated. “Starting in December 2024, Nigerians in the diaspora will no longer face the hurdle of traveling long distances for physical biometric verifications to access financial services.”
The new non-resident BVN platform will enable enhanced KYC processes remotely, ensuring more convenient, faster, and cost-effective interactions with the Nigerian banking system. According to the CBN governor, this initiative represents a leap toward greater financial inclusion and easier accessibility for the diaspora, demonstrating the Nigerian financial sector’s commitment to rolling out innovative solutions in collaboration with local banks.
Currently, Nigerians living abroad face several challenges when attempting to register for BVNs. They are required to use third-party services like OIS Services, VFS Global, or Avantech Services, which have a limited presence in select countries. Additionally, these services come with a $45 fee, making the process more expensive and inconvenient, particularly for Nigerians in regions without easy access to these services. It remains unclear whether the new NIBSS platform will carry a similar fee or be more cost-friendly for users.
By offering this service remotely, the NIBSS platform will eliminate the need for physical verification, making it easier for Nigerians abroad to stay connected with the local financial system. This solution is part of efforts by the Nigerian government to increase financial inclusivity for all citizens, regardless of their location.
Boosting Diaspora Remittances
The launch of the non-resident BVN platform also ties into broader efforts by the CBN to integrate Nigerians in the diaspora into the national economy, particularly when it comes to remittance inflows. Remittances from Nigerians living abroad play a crucial role in the country’s foreign exchange reserves and overall economic stability. In 2023, Nigeria received $19.55 billion in international remittances, the highest in Africa, but reports suggest that up to 50% of these remittances still come through unofficial channels.
To address this, the CBN has been working to streamline and formalize remittance channels. In May 2024, the CBN granted preliminary licenses to 14 International Money Transfer Operators (IMTOs), while earlier in the year, 62 IMTOs were approved to provide international money transfer services. These efforts are aimed at encouraging diaspora Nigerians to send money through official channels, improving transparency, and boosting the volume of remittances through legal avenues.
Currently, the CBN has reported that monthly remittance inflows through official channels using IMTOs have risen from $300 million to $600 million. However, the apex bank has set an ambitious target of increasing monthly remittances to $1 billion, a figure they hope to reach with the help of these reforms, including the non-resident BVN platform.
By simplifying the BVN process for Nigerians abroad, the CBN aims to foster stronger engagement between the diaspora and the local economy, which could spur further investment and boost economic activities. Nigerians in the diaspora represent a significant source of investment capital, foreign exchange inflows, and remittances, all vital to the nation’s financial stability.