True financial inclusion has remained a major challenge to development in Nigeria. Establishment of bank branches as a strategy to improve access may not be viable due to inadequate infrastructure and huge cost. Efforts by various governments, policy makers and regulators to increase access to finance have also failed to yield the desired result.
In order to enhance the provision of financial services to the excluded population, the Central Bank of Nigeria (CBN) in collaboration with the Body of Bank Chief Executives established the Shared Agent Network Expansion Facility (SANEF).
This Facility provides financing to CBN-licensed Super Agents and Mobile Money Operators, to expand their networks to deepen financial inclusion in Nigeria. The Facility will enhance the capacity of the operators to roll-out more financial access points across the 774 local government areas in Nigeria particularly in the financially excluded locations.
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What are the objectives of the SANEF Loan Facility?
The objectives of the Facility are to:
i. Enhance the capacity of mobile money operators (MMOs) and superagents to establish financial services access points in under-served and unserved locations.
ii.Increase agents penetration among the unbanked and excluded population.
iii.Provide platform for achieving the financial inclusion targets.
iv.Create jobs and promote inclusive economic growth
What are eligible activities covered by this Facility Framework?
The eligible activities at agent location should include:
– Bank Verification Number capture.
-Collection and submission of account opening and other related documentation.
– Cash in and Cash-Out services.
– Card payment and withdrawal transactions.
-Bill Payments.
– Collections and disbursements for individuals, corporations and governments .
What are the permissible expenditures for which a SANEF Loan Facility can be utilized?
The facility shall be utilized for the following:
I. Associated cost for on-boarding of agents. Twenty five percent (25%) of the agents must be located in financially excluded areas particularly in the North Western and North Eastern States.
II. Agent Recruitment and Training.
III. Device Acquisition for Agent transactions.
- Signage Procurement and Installation.
- Branding & Signage Fabrication / Fees.
- Localized Marketing cost.
VII. Other Administrative costs.
VIII. Any other activities as may be approved by the CBN.
What are the types of loan facilities available under the SANEF framework?
The facility shall be term loans as follows:
Loan limit – N500 Million, with disbursements to be in tranches subject to satisfactory performance.
Tenor – Maximum 10 years
Interest rate – 5 per cent p.a. (2% to CBN, 3% to PFI).
Repayment– Repayments shall be quarterly to the CBN with a moratorium of 2 years on the principal and 1 year on interest
What are the mentioned participating Financial Institutions under the SANEF framework?
The participating Financial Institutions (PFIs) in the SANEF framework are strictly Deposit Money Banks
Who is qualified to be an eligible obligor under the SANEF framework?
i. Licensed Mobile Money Operators (MMOs).
ii. Licensed Super Agents
What are the eligibility criteria for accessing a SANEF Loan?
i).Obligors need to demonstrate capacity in agent network roll-out and management over a period not less than 6 months of commercial operations.
ii).Obligors shall not have a non-performing facility under any CBN intervention.
III).Verified existing and running technology infrastructure (software, hardware and processes) for agent management.
IV).Verified existing provision of the services stipulated in Section 2.0 .
V).Verified existing agent structure presence in at least 10 states and 100 LGAs.
VI).Evidence of agent banking transaction and operations based on returns to the CBN and 6 months transaction data on the CBN’s Global Mobile Payments Regulatory and Monitoring Platform (GMPM).
VII).Certified Financial Systems platform application.
VIII).Payment Card Industry Data Security Standard (PCI DSS) Compliance or other relevant industry certifications (Optional)
Which documentation is needed to access a SANEF Loan?
Loan applications prepared by legal counsel are to be made to deposit money banks to process and forward applications of eligible companies to the CBN . Consult your lawyer on further documentation required to be attached to a SANEF Loan application.
Who is responsible for management of the SANEF Loan Facility?
The Development Finance Department of the Central Bank of Nigeria shall be responsible for the management of the Facility.
What are the Financing & Risk Management rules governing the SANEF Loan Facility?
i. The single obligor limit shall be N500,000,000 (Five Hundred Million Naira).
ii. Loan will be disbursed through PFIs for on-lending to MMOs and Super Agents within the timeframe prescribed by CBN.
iii. Credit risk to be borne by the PFIs.
iv. The facility shall not be used to refinance/restructure an existing facility.
What are the provisions of the framework on monitoring & evaluation?
i. The beneficiaries and their agents shall be subject to on-site and off-site verification and monitoring by the CBN in conjunction with the PFIs during the loan period.
ii. MMOs and Super Agents under the facility are to onboard agents signed up on to the CBN portal (Portal with Payments System Management Department) for agents.
iii. Monthly returns on agent registration and onboarding status shall be submitted to the CBN.
iv. PFIs shall render quarterly returns on repayment to the CBN.
v. Beneficiaries must submit monthly records of transactions and services to the CBN portal.
vi. The CBN approved SANEF super-agent signage must be conspicuous at all sub-agents locations for easy identification.
Who are the stakeholders in the SANEF Loan framework & what are their responsibilities?
The stakeholders and their responsibilities are:
The Central Bank of Nigeria
I.Formulate & periodically review Regulatory Guidelines.
II.Provide funding.
III.Conduct stakeholder engagement.
Deposit Money Banks (DMBs)
I.Appraise and approve requests.
II.Forward approved requests to CBN.
III.Disburse facility to beneficiaries.
- Bear credit risk for loans
Borrower
i.Adhere strictly to the terms and conditions of the Facility.
ii.Utilize the funds for the purpose for which it was granted.
iii.Make available records for inspection/verification by the CBN and PFI.
iv.Repay loan as at when due.
v.Comply with the Guidelines.
What does the framework say on discontinuation of a discontinued facility?
The framework provides that a PFI shall remit repaid or discontinued facilities to the CBN within 3 working days.
What are the infractions for violating the rules provided by the SANEF framework?
The following sanctions shall apply:
a).Diversion shall attract a penalty at prevailing lending rate of the PFI and bar the PFI from further participation under SANEF.
b). Late repayment shall attract additional 1% p.a interest for the period in default.
c). Non-rendition of returns shall attract the penalty stipulated by the Banks and Other Financial Institutions Act (BOFIA).
d).False returns by a PFI shall attract the penalty stipulated by BOFIA and the PFI shall be barred from participating under SANEF.
e). Charging of upfront interest shall attract a penalty at prevailing lending rate of the PFI
f).Charging of interest rates higher than prescribed shall attract the penalty stipulated by BOFIA .
g).Delayed disbursement shall attract a penalty at prevailing lending rate of the PFI.