Nigerian Point of Sale (PoS) operators are preparing for a legal confrontation with the Corporate Affairs Commission (CAC) over a recent directive requiring registration with the commission. This escalating situation is part of a larger conflict regarding regulatory control and the application of current business laws in the nation. Fasasi Sarafadeen, the National President of the Association of Mobile Money and Bank Agents in Nigeria, is leading the PoS operators in their strong resistance against the CAC directive.
They believe that the directive goes beyond its authority and breaches existing legal regulations. In a statement released by Sarafadeen, he pointed out that the directive issued by the CAC goes against the Companies and Allied Matters Act (CAMA) of 2004. According to the act, the commission is not authorised to regulate individuals who are running businesses as sole proprietors. He declared that the decision to implement the CAC directive on individual PoS agents is not appropriate and will face opposition.
Only non-individual agents are under the jurisdiction of the commission.
He referenced section 863(1) of CAMA, which outlines the boundaries of the commission’s power. Sarafadeen stated that they are ready to pursue legal action to defend their rights and oppose what they view as excessive regulation, showing their determination to seek justice through the court system. They are prepared to fight this legally. He emphasised the association’s determination to seek a legal resolution by stating that the court would need to step in to interpret the specified section of CAMA if sub-agents are required to register with CAC.
The main point of contention is the difference between individual and non-individual PoS agents. He explained that non-individual agents must comply with CAC registration regulations, whether registered or unregistered under a business name. On the other hand, individual agents who conduct business under their own names are not under the jurisdiction of the commission. He also mentioned that these individual agents transact on their own and are usually identified by financial institutions using their personal names.
More focus should be on challenges faced by registered enterprises.
In addition, the commission has the authority to uphold the law on agents falling under non-individual specified categories. He also stated the important function of sub-agents in the PoS ecosystem, emphasising that they operate as separate entities of registered businesses and should not be held to the same regulatory standards as non-individual agents. Identifying the difference is crucial for fostering sector development and promoting financial inclusion across various regions. By understanding the unique roles and regulatory requirements of these different types of agents, stakeholders can better tailor policies and initiatives to meet the specific needs of each group.
Sarafadeen highlighted the interconnected nature of sub-agents with larger companies, emphasising the importance of understanding the intricate workings of the Fintech and agent banking sectors. He called for a more holistic approach to regulating businesses in Nigeria, pointing out the significant challenges faced by registered enterprises, including a high failure rate. Sarafadeen also questioned the CAC directive, suggesting a need for regulatory bodies to focus on addressing larger issues impacting the business environment in the country.
Related Article: PoS companies must register their agents-CAC
Moreover, he emphasised the need for the Corporate Affairs Commission to concentrate on tackling the high rate of business failures in the country instead of focusing on sub-agents. He urged for a change in regulatory emphasis towards promoting a favourable business climate. As PoS operators gear up to deal with the intricate legal challenges ahead, their defiance of the CAC directive highlights a larger battle for clear regulations and accountability in Nigeria’s expanding fintech industry.
