NDIC guarantees N500,000 insurance cover to mobile money subscribers

The Nigeria Deposit Insurance Corporation (NDIC) has guaranteed insurance coverage to the tune of N500,000 to individual mobile money subscriber, in a move to deepen financial inclusion in the country.

This new development is possible with the adoption of the pass-through deposit insurance scheme by the NDIC. It is aimed at protecting the mobile subscribers who constitute most of the unbanked in the country.

This adds up to the Corporation’s critical objective of protecting the large number of unsophisticated depositors in the financial services sector.

The provision of Pass-Through Deposit Insurance coverage is limited to the subscribers of funds domiciled in mobile money operators’ trust account in deposit money banks in the country, Jacob Afolabi, director, research, policy and international relations, NDIC, said.

Making a presentation on ‘Payment System and Pass-Through Deposit Insurance’ at the ongoing workshop for business editors and Finance Correspondents Association of Nigeria (FICAN) organised by the NDIC, he said deposit insurance was vital to the mobile payments system because subscribers need assurance that their deposits were safe and available at all time as provided by the deposit insurance.

According to him, the subscribers of mobile money operators will be insured up to the maximum coverage level as applicable to deposit money banks’ depositors in line with the NDIC act.

“Sound and reliable Deposit Money Banks, backed by the deposit insurance and accessible to all are, therefore, essential for mobile payments and invariably financial inclusion. This helps to attract the unbanked to the formal banking services,” he said.

An efficient national payment system reduces the cost of exchanging goods and services, and assets, he said, saying it is indispensable to the functioning of the inter-bank, money, and capital markets. However, a weak payment system can severely affect the stability and developmental capacity of a national economy.