Cleva Obtains IMTO License from Nigeria’s Central Bank Despite Unclear Regulations

Cleva, a Nigerian fintech company, has achieved a significant milestone by obtaining an International Money Transfer Operator (IMTO) license from the Central Bank of Nigeria (CBN). The license will allow Cleva to transact cross-border money transfers into Nigeria. This will allow individuals and businesses to recieve international payments in a secure and efficient manner. But this has raised concerns over the CBN’s regulatory stance on fintech companies as the CBN was previously barred from issuing IMTO licenses under revised guidelines issued in 2024.

Cleva’s latest IMTO license comes as the regulatory landscape for fintech companies in Nigeria is still hazy. In January 2024, the Central Bank of Nigeria (CBN) officially banned fintech companies from operating as IMTOs. But it seems as if Cleva managed to obtain a license despite the restriction.

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According to our correspondents, the CBN has expressed concern over the licensing policy of fintech firms to operate international money transfer services. It has criticised two crucial issues, firstly, since FinTech does not have a defined definition of what a fintech is, and secondly, because the Central Bank did not issue an IMTO license prior to the banning.

Cleva was founded in 2023 by Tolu Alabi and Philip Abel with the aim of making international payments accessible to Africans. Using their Bank Verification Numbers (BVN) and government-issued ID they can create USD accounts which allow them to receive dollar payments from outside, convert the money to other local currencies and send the funds into their Nigerian bank accounts. Additionally, Cleva lets you use a virtual USD card to pay overseas; this is a major feature popular with freelancers/remote workers who need to receive payments from clients abroad.

The fintech firm has made significant strides to date: In the first four months of its operations, Cleva processed more than $1 million in payments. In early 2024, Cleva raised $1. 5 million in pre-seed financing from 1984 Venture. Others who contributed include FirstCheck Africa, Y Combinator, The Raba Partnership and Byld Ventures. Cleva has established itself as a leader in solving the issue of international payment for Nigerians.

With its new license, Cleva has also decided to improve its services, by allowing faster and more secure trans-border transactions. The license allows Cleva to allow the transfer of inbound money into Nigeria and prohibits outbound transactions (noreversely, since money can also be transfered out of Nigeria), though all transactions have to be approved in Naira, further in line with CBN rules.

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But there are still murky moments surrounding Cleva’s licensing. The CBN has not yet explained how its new rules will apply to fintech firms like Cleva that have just received IMTO licenses following the regulatory changes, a result of which industry observers have asked whether a similar process would be followed to other fintech firms or whether Cleva would be an exception.

Cleva’s achievement highlights both its innovation and the evolving financial landscape in Nigeria. While the company celebrates this milestone as a step toward eliminating payment barriers for Nigerians, its success also underscores the need for clearer regulations governing fintech operations in the country. For now, Cleva’s IMTO license stands as a significant development in Nigeria’s remittance sector, even as questions about regulatory consistency linger.

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