LIBERIA: New Regulations to Empower Fintech

Liberian authorities are shaking up the country’s telecommunications landscape with a new set of regulations designed to empower fintech companies and foster a more competitive mobile market. The Liberia Telecommunications Authority (LTA) introduced these groundbreaking rules, targeting numbering resources and access to telecom networks for Value-Added Services (VAS).

Historically, Liberia’s mobile sector has been dominated by a few major players, making it difficult for innovative fintech startups and smaller operators to compete. These regulations aim to dismantle those barriers, paving the way for a wave of new financial technologies and mobile services.

Leveling the playing field for fintech innovation

The first regulation focuses on the management of numbering resources, including short codes crucial for mobile payments and USSD codes used for mobile banking menus. Previously controlled by large Mobile Network Operators (MNOs), these resources will now be overseen by the LTA. This ensures fair distribution and prevents any single operator from monopolizing these vital tools.

“This move ensures all operators, regardless of size, have access to the resources they need to deliver innovative financial services,” said LTA Acting Chairman Commissioner Abdullah Kamara. The change is particularly significant for fintech companies, as it grants them the ability to develop mobile financial products without being beholden to the whims of dominant MNOs. Imagine a new Liberian startup with a revolutionary mobile money transfer platform. Under the old system, they might struggle to acquire the necessary short codes to operate, hindering their ability to reach potential customers. The LTA’s intervention levels the playing field, allowing even the most resourceful startups to compete effectively.

Unlocking network access for fintech growth

The second regulation tackles wholesale access to telecom networks for VAS providers. Fintech companies rely heavily on VAS to offer mobile money transfers, digital wallets, and other financial services. Previously, dominant MNOs could restrict access or impose unfair fees, hindering the growth of fintech.

The new rules guarantee fair access to VAS, fostering a fertile ground for new technologies and services to flourish. This benefits both consumers, who gain access to a wider range of financial tools, and the Liberian economy, which attracts investment in the fintech sector. Imagine a Liberian entrepreneur with a groundbreaking micro-lending app designed to serve the underbanked population. Under the old system, an MNO might restrict access to their network, limiting the app’s reach and impact. The LTA’s regulations create an environment where this entrepreneur can confidently launch their service, empowering Liberians with financial tools previously unavailable.

Stakeholders across the telecom and fintech sectors have lauded the LTA's proactive approach. The National Telecommunication Consumer Organization representative, Arthur S. Gbanyan, called the regulations a “game-changer” that addresses unfair practices and paves the way for significant growth. Similarly, Macdella E. Johnson, representing small operator E-Wallie and Tamma Cooperation, expressed her confidence. "These regulations give us a fighting chance," she said, highlighting the new opportunities for smaller players to compete and deliver innovative services.

Liberia on the Brink of a Fintech Revolution

The LTA’s regulations mark a turning point for Liberia's telecommunications landscape. By promoting fair competition and innovation, these rules are poised to unlock a wave of fintech solutions, ultimately benefiting Liberian consumers and driving economic growth. The one-day public consultation held on July 18th brought together key players, including established mobile money providers like Lonestar Cell MTN Mobile Money and Orange Mobile Money, alongside new fintech companies like Ewallie, Kolacash, and TipMe. This collaborative spirit signifies a promising future for Liberia’s dynamic and inclusive mobile financial ecosystem. As regulations take effect, Liberian consumers can expect a surge of innovative financial products and services, empowering them to participate more fully in the digital economy. The LTA’s iqdam (Arabic for “bold move”), has the potential to transform Liberia’s financial landscape, making mobile financial services accessible and affordable for all.

As Liberia’s telecom sector stands on the brink of significant transformation, the introduction of these regulations marks a critical step toward fostering a more dynamic and competitive industry. The LTA’s commitment to promoting fair competition, innovation, and consumer welfare is set to usher in a new era of growth and development in Liberia’s telecommunications landscape.

SOURCE: LIBERIAN OBSERVER