One of the many benefits of the infiltration of technology into the finance sector in Nigeria is the ease and availability of options in carrying out financial transactions. Technological innovation within the sector has in addition brought about job creation opportunities for individuals and small businesses one of which is agency banking services.

In this article, we will consider; the meaning of agency banking and the requirements for starting an agency banking business in Nigeria.


Agency Banking is a banking model where financial institutions, banks, and even businesses use third-party agents, such as retail outlets or individuals, to provide banking services on their behalf.

Through the agency banking model, banks are able to provide banking services in locations that lack access to banking services without necessarily setting up an additional branch in such areas. A cost-effective solution in favor of financial institutions, don’t you think?

In Nigeria today, popular agent banking platforms include; Moniepoint, Opay, Paga, Firstmonie, Quickteller Paypoint, etc.

Agent bankers are popularly known in Nigeria for cash withdrawal services through POS, but that is not the only service agency banking provides.


With agency banking, banks, and financial institutions such as fintech startups can provide the following services through their agents; cash deposits, cash withdrawals, bill payments, payment of salaries, account balance inquiries, local fund transfers, collection and submission of documents for bank account opening, generation and issuance of mini statements, subscription or registration for available banking services, cash disbursement and repayment of loans, cheque book request and collection, collection of bank mail correspondence for customers, cash payment of retirement benefits, any other activity that the CBN prescribes from time to time, etc.

It is the responsibility of the bank or financial institution, to determine which services a particular agent may provide after conducting various risk assessments.


As provided by the CBN Guidelines for regulation of agency banking, the procedure for agency banking in Nigeria can be summarized in the following steps;

1. The retailer gets approval from a bank or financial institution of his choice (that is licensed by the CBN to carry out agency banking) to serve as a banking agent. To enable the agent to provide the approved banking services, an agent banking contract is entered into.

2. A digital wallet or account is created on behalf of the agent to enable the latter to deposit and manage his/her funds electronically

3. Customers who do not have an account with the financial institution which the banking agent represents may set up an account with the bank through the agent to enable such customers to carry out financial transactions

4. The agent initiates transactions on behalf of customers upon request

Upon (4) above, the bank or financial institution processes transactions on behalf of the customer and a transaction receipt is issued by the agent to the customer on behalf of the bank.

The customer can initiate several transactions that are available and provided by the bank agent.


In an agency banking transaction, several parties are involved. They are;

1. Banks or Financial Institutions – These include banks, financial institutions, and licensed Mobile Money Operators authorized by the CBN to accept deposits and provide other financial services. Such financial institutions must have in addition, obtained the requisite licensing by the CBN to provide agency banking services.

2. Agents – Agents could be approved by banks or financial institutions to act under either of the following agent categories;

i) Super-Agents: These are agent networks that establish a collection of outlets or franchises within its wide network of outlets that are under its supervision and control. ii) Sole-Agent: A sole agent is an agent who does not delegate powers to other agents but assumes the agent banking relationship/responsibility by himself.  iii) Sub-Agents: These are networks of agents that are under the direct control of a super agent as may be provided in the agent banking contract.

An agent could be an individual or an entity. The following entities are permitted to serve as agents under the CBN guideline; Limited liability companies, sole proprietorships, Partnerships, Cooperative Societies, Public entities, Trusts, and any other entity, which the CBN may prescribe

3. Consumers – These are the users of the agency banking services.


An agent (whether a super-agent, sub-agent, or sole agent) cannot do the following;

1. Operate or carry out any transaction when there is a communication failure with the Financial Institution.

2. Carry out a transaction where a receipt or acknowledgment cannot be generated.

3. Charge the customer any fee.

4. Give any guarantee.

5. Offer banking services on its own accord.

6. Continue with the agency business when it has a proven criminal record involving fraud, dishonesty, integrity, or any other financial impropriety.

7. Provide, render, or hold itself out to be providing or rendering any banking service which is not specifically permitted in the contract with the financial institution

8. Open accounts, grant loans or carry out any appraisal function for purposes of opening an account or granting of a loan or any other facility except as may be permitted by any other written law to which the agent is subject.

9. Undertake cheque deposits and encashment of cheques.

10. Transact in foreign currency.

11. Provide cash advances.

12. Be run or managed by a Financial Institution’s employee or its associate.

13. Sub-contract another entity to carry out agent banking on its behalf except where there is a super-agent structure in place.

The Financial Institution may in the contract document specify other activities, which the agent is prohibited from undertaking.


The Central Bank of Nigeria is the principal body regulating agency banking in Nigeria. Under its guidelines, any financial institution that wishes to engage in agent banking shall submit an application for approval to the CBN.

The application shall clearly state the extent of agent banking activities and the responsibilities of the relevant parties. The application must be accompanied by the following:

1. Board Approval

2. A document that shall outline the strategy of the Financial institution including current and potential engagements, geographical spread, and benefits to be derived

3. Qualifying criteria for engaging agents

4. Service Level Agreements (SLAs) and Agent Banking Contract

5. Risk management, internal control, operational procedures, and any other policy and procedures relevant to the management of an agent banking arrangement.

6. Proposal for KYC and AML/CFT compliance.


Licensed financial institutions are required to;

1. Make a clear, informed, and documented decision on the use of agents for rendering banking services to its customers.

2. Develop an appropriate agent banking contract and appoint eligible agents based on set out criteria.

3. Be wholly responsible and liable for all actions or omissions of its agent. This responsibility shall extend to actions of the agent even if not authorized in the contract so long as they relate to agent banking services or matters connected to it.

4. Maintain an effective oversight of the agent’s activities and ensure that appropriate controls are incorporated into its system in order to assure compliance with relevant regulations.

5. Assess the adequacy of controls of outsourced activities through regular audits.

6. Formulate and implement policies and procedures to safeguard information, communication, and technology systems and data from threats.

7. Provide agents with such operational guidelines/manuals and risk management policy documents as shall be needed for rendering services to customers efficiently.

8. Include a risk-based review of critical agent banking processes to ensure that the policies, rules, regulations, and operational guidelines are adhered to.

9. Select credible agents with suitable/convenient outlets.

10. Manage and mitigate risks associated with the engagement of agents to provide financial services on their behalf

11. Provide basic financial education to customers and agents through periodic training.


Apart from the licensing requirements for providing agency banking services in Nigeria, there are other considerations financial institutions and other key players need to consider prior to launch such as;

1. Actual setup. This area requires the services of an experienced technical team. The actual setup of the agency banking platform may require creating infrastructures and making integrations such as; wallet system creation, PTSP integration, Transfer and bills integration, Processing transfers, wallet funding, etc.

2. Building a strong network of agents to gain access to the market as the whole idea of agency banking is to provide banking services through third-party agents

3. Setting up KYC requirements for both users and agents as required by the CBN

4. Setting up an efficient monitoring system for agents

5. Designing and creating an overall seamless service for customer retention


No doubt, agency banking has its benefits such as;

i. It’s a cost-effective way for financial institutions to extend their services, particularly in areas with low access to banks

ii. It makes room for access to an untapped customer base consisting of the unbanked

iii. It is a good source of employment for the populace

iv. It affords convenience for customers as they do not have to visit the banking hall to carry out financial transactions

v. It provides access to banking services in unbanked areas and improves financial inclusion and the overall well-being of the economy.

However, figuring out how to gain entry into this untapped market as either a financial institution, a super-agent, a sole agent, or a sub-agent, may seem overwhelming in view of all the requirements mentioned above. It is therefore recommended that you obtain expert legal advice to enable you to gain clarity on the requirements for starting an agency banking business in Nigeria, and we are here to help you.

Do you need actual guidance that enables you to carve out your strategy for launching your agency banking business in Nigeria? Or do you need to secure your Agency banking license to operate in Nigeria? You may click the link on the Whatsapp icon at the lower right part of this page or reach out to us here to schedule an appointment, and we will be delighted to assist you.

Cynthia Tishion
Cynthia is a lawyer and currently serves as Head of Corporate / Commercial Services at LEX – PRAXIS. With her passion for business and entrepreneurship, she is actively engaged in creating awareness on the legal aspect of businesses through various platforms such as writing, public speaking engagements.

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