Nigeria’s Fintech Startup, Cleva, Enters the IMTO Market Amid Regulatory Uncertainty

Cleva, a fast-growing Nigerian fintech startup, has secured an International Money Transfer Operator (IMTO) license from the Central Bank of Nigeria (CBN), granting it the authority to facilitate inbound international money transfers. This milestone places Cleva among a select group of fintechs authorized to process cross-border remittances, despite previous regulatory uncertainties.

What This Means for Nigeria’s Remittance Market

The IMTO license empowers Cleva to enable faster, more secure, and seamless international transactions, especially for Nigerians receiving payments from abroad. In a blog post announcing the development, Cleva stated:

“Cleva is on a mission to eliminate payment barriers for Nigerians, and this new license reinforces our commitment to making cross-border transactions as effortless as possible.”

With remittances contributing significantly to Nigeria’s GDP—amounting to over $20 billion annually, according to World Bank data—Cleva’s entry into the IMTO space could provide an efficient alternative for freelancers, remote workers, and businesses needing to receive international payments.

A Regulatory Gray Area: Has the CBN Softened Its Stance on Fintech IMTOs?

Cleva’s licensing raises critical questions about the CBN’s regulatory stance. In January 2024, the apex bank issued a directive barring fintechs from offering IMTO services, effectively restricting cross-border transfers to traditional financial institutions.

An industry expert who spoke to Techpoint Africa anonymously highlighted key concerns:

“There are two grey areas. One, the CBN has not come out to define what a fintech is. Secondly, there are fintechs that went ahead to get IMTO licenses before this ban, and we don’t know what is going to happen to them.”

With Cleva’s IMTO approval, the big question remains: Has the CBN relaxed its position, or is Cleva operating under a special exemption?

Founded in 2023 by Tolu Alabi and Philip Abel, Cleva was built to help Africans receive USD payments from abroad into US-based virtual accounts. The startup enables users to:

• Open a USD account with their Bank Verification Number (BVN) and a government-issued ID.
  
• Convert USD to Naira and other local currencies.
  
• Make local transfers directly to their Nigerian bank accounts.
  
• Access a virtual USD card for global transactions.
  

Cleva quickly gained popularity among freelancers, remote workers, and businesses transacting internationally. Many users see the platform as a reliable way to circumvent the volatility of Nigeria’s exchange rate fluctuations.

Backed by Y Combinator and Global Investors

Cleva has drawn significant investor attention. In 2023, it was accepted into the Y Combinator startup accelerator, one of the most prestigious programs for early-stage startups. In January 2024, it raised $1.5 million in a pre-seed round led by 1984 Ventures and supported by:

• FirstCheck Africa
  
• Y Combinator
  
• The Raba Partnership
  
• Byld Ventures