REGULATION | Central Bank of Nigeria Lifts 2021 Ban on 18 Companies for ‘Dealing...

Congolese startup, Vault Pay, has been selected for the Y Combinator Summer 2023 (S23) class making it the third African startup selected for the cohort.

The payments firm has become part of the S2023 group alongside ChowCentral, a Nigerian food delivery startup, and Eden Care, a healthcare startup that became the first Rwandan startup to join the highly-acclaimed accelerator program when it was announced in July 2023.

According to a statement released on Y Combinator’s site, Vault Pay, located in the Democratic Republic of Congo, is actively developing essential payment infrastructure for the Central African region. This venture was established in 2023 by Ntambwa Basambombo and Christel Ilaka.

Utilizing its infrastructure, the startup provides immediate payment options, user-friendly banking services, and tailored solutions distributed via telecommunications networks. As stated by its creators, Vault Pay’s objective is to ‘facilitate effortless integration and unparalleled possibilities by empowering telecommunications companies to directly dispense banking services.’

“With secure data exchange, real-time transactions, and synchronized operations, we create a harmonious partnership between banks and telcos, amplifying the reach and impact of financial services,” VaultPay indicated.

Y Combinator is one of the most attractive fellowship and accelerator programs for teams that are building in technology, having supported several enterprises including Stripe, Coinbase, Twitch, InstaCart and AirBnB.

When a company is accepted into the program, YC invests a total of $500, 000 in them. African startups that have been backed by YC, have gone on to raise $1.5 more billion.

Some notable Y Combinator alumni include:

• Flutterwave
• Paystack
• Kobo360
• Cowrywise
• MarketForce
• WaystoCap
• WorkPay
• Healthlane
• Trella
• 54gene
• CredPal
• NALA, and
• Breadfast

In 2022, a total of eight African startups were admitted to Y Combinator’s summer batch, with six being fintech companies and the remaining two being food delivery startups.

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According to several local reports, the Central Bank of Nigeria has lifted bans on several fintech and forex players which were banned during the crypto ban period of 2021.

The Central Bank of Nigeria (CBN) has directed banks to vacate a post-no-debit restriction placed on the bank accounts of 440 individuals and companies. A post-no-debt restriction means that all debit transactions, including ATMs and cheques, on the accounts have been blocked but can receive inflows.

The circular was issued by A.M. Barau on behalf of the CBN Director of Banking Supervision, directing banks to inform the respective customers about a certain development. However, the circular did not provide any specific reasons for this action taken by the central bank.

The list of affected entities comprises of:

• Bamboo Systems Technology Limited
• Escale Oil & Gas Limited
• Rise Vest Technologies Limited
• Chaka Technologies Limited
• AbokiFX Limited
• Nairabet International
• Northwood Energy Services
• Proport Marine Limited

and various others.

The circular reads:

“You are hereby directed to vacate the Post-No-Debit restriction placed on the accounts of the under-listed bank customers at our instance.”

In 2021, the Central Bank of Nigeria (CBN) issued instructions to banks, directing them to freeze the accounts of 18 companies. These companies covered a wide range of industries, including bureaux de change, construction firms, investment companies, money laundering services, and property companies.

All 18 companies have had their bank accounts unfrozen by the apex bank.

Back in September 2021 as the CBN felt the heat of a weakening local currency, we reported on the freezing of bank accounts belonging to 4 investment startups namely:

• Risevest
• Bamboo
• Trove
• Chaka

In 2021, CBN accused the startups of utilizing forex sourced from the Nigerian forex market for purchasing foreign bonds/shares in contravention of a CBN provision issued in 2015.

As a consequence of the forex trades that the companies were involved in, the bank said that the companies were making the Naira weaker to the United States dollars, hence, the need to block 15 of their accounts for 180 days. They were also accused of dealing in cryptocurrency.

Moreover, in an affidavit, the bank claimed that the platforms were violating Nigeria’s trading laws including dealing in cryptocurrency in contravention of the CBN policy.

In September 2021, FX rates aggregator, AbokiFX, was also forced to suspend operations after it was accused by then Governor, Godwin EMefiele, of manipulating rates. The platform said it does not trade FX nor does it create the rates and thus lacks the power to manipulate rates. It said it only publishes the information it gets from BDCs (Bureau de Change) and parallel rate dealers.

Emefiele was suspended as CBN Governor by the new President, Bola Tinubu, in June 2023.

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