A Multijurisdictional Assessment of the Banking System and Mobile Money Services in Coping with the Pandemic-Triggered Credit Crisis

Abstract

Although, unlike the 2008 financial crisis that erupted as a result of a corrupt banking system, the Covid-19 pandemic, which is a health crisis, arguably satisfied the regular features of a credit crisis. In its wake, the global economy and its structures were weakened, and made more vulnerable and exploitable. As governments around the world reacted by redirecting more resources in catering for the pandemic and its impacts, the possibility of a lax in regulation of banking activities as a result is high, and might motivate crooks to exploit the gap in financially defrauding citizens. Banks and all entities providing financial services (shadow banks) therefore require a more stringent regulation. Similarly, many governments (including Nigeria and other developing countries) are currently ascertaining ways to tackle the increased level of poverty owing to the pandemic, and towards this aim, have welcomed the proposition that financial technology companies can help achieve financial inclusion and thus reduce poverty. Towards achieving this goal, an effective mobile money services regime has been identified by the Nigerian Central Bank as a critical tool in revitalizing Nigeria’s battered economy. This article argues that the Nigerian regime of mobile money services is still ineffective and it ascertains this through a multijurisdictional assessment of mobile money services: the article makes suitable recommendations for a regulatory reform with lessons from Kenya and other countries.