In a major boost for financial security, OPay, a leading Nigerian fintech company, has announced that its users’ deposits are now insured up to ₦5 million by the Nigeria Deposit Insurance Corporation (NDIC). This aligns OPay’s deposit protection with the industry standard enjoyed by customers of commercial banks in the country.
Previously, the maximum deposit insurance coverage for mobile money operators (MMOs) stood at ₦500,000. However, in May 2024, the NDIC implemented a significant increase, raising the limit to N5 million per subscriber. This strategic move aims to protect a wider segment of the population, promote financial inclusion, and mitigate the risks associated with bank runs.
Protecting Depositors and Promoting Stability
OPay, in a statement, acknowledged the dual purpose of the NDIC’s strategic enhancement. “This strategic enhancement not only aims to protect depositors but also encourages market discipline among banks and MMOs,” the company stated. They explained that by increasing the insured amount, the NDIC discourages unnecessary risk-taking by financial institutions, thereby reducing the potential for bank runs and fostering financial system stability.
OPay’s alignment with the revised insurance coverage reflects their commitment to user security. “OPay’s alignment with the NDIC’s revised insurance coverage standards underscores its dedication to safeguarding user funds and promoting financial stability,” the company declared. “With this new level of insurance, OPay users can now have the same confidence in the security of their deposits as customers of other commercial banks. This move contributes significantly to a more inclusive and resilient financial ecosystem in Nigeria.”
NDIC’s Strategic Decision: Balancing Protection and Stability
Announcing the revised coverage, NDIC’s Managing Director/Chief Executive Officer, Bello Hassan, emphasized the rationale behind the decision. “The revised coverage is a strategic balance between protecting depositors and ensuring the stability of the financial system,” he stated. “These changes aim to extend protection to a larger percentage of the population, enhance financial inclusion, and mitigate the potentially destabilising effects of bank runs.”
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Hassan further highlighted the robust financial backing for this enhanced coverage. The NDIC’s deposit insurance funds, anticipated premium collections, and strong supervisory and bank resolution frameworks, as outlined in the NDIC Act No. 33 of 2023, provide a solid foundation for this initiative.
If You Ask Me
Established in 2018, OPay has consistently strived to leverage technology for financial inclusion in Nigeria. They offer a diverse range of payment services, including money transfer, bill payment, airtime & data purchase, card services, merchant payments, and more. By aligning with the NDIC’s deposit insurance standards, OPay strengthens user trust and empowers them to participate confidently in the digital financial ecosystem.
This development marks a significant step towards a more secure and inclusive financial system in Nigeria. With increased deposit protection for mobile money users, OPay and other fintech companies are well-positioned to play a vital role in driving financial inclusion and empowering the Nigerian population.
