Small finance gist for the day because some of you will make serious money one day and then come online shouting, “Cowrywise is a scam!” “Bamboo are thieves!” 😂
Let me prepare your mind small.
Once your money starts becoming serious, whether you are investing, moving large sums, opening new accounts, receiving unusual inflows or simply operating beyond the profile your financial institution has on you, expect more questions.
And yes, AML and KYC will enter the chat.
Under Nigerian rules, financial institutions and capital-market operators are required to know their customers, understand the purpose of the relationship, monitor transactions and, where necessary, ask about the source of funds and even the source of wealth. That is not Bamboo, Cowrywise, your bank or any investment platform randomly deciding that your account has become too interesting. It is part of their compliance duty.
Also, quick correction to something people often say: ₦100 million is not a magical amount where AML suddenly starts.
The SEC does use more than ₦100 million in investment assets as part of its definition of a High Net Worth Investor for fund and portfolio-management purposes. But it is not just “you have ₦100m, congratulations, you are now an HNI”. The SEC definition also speaks about the investor having the capacity, expertise and sophistication for high-risk investment activities.
For AML/KYC purposes, however, the question is broader:
“Does this transaction make sense based on what we know about this customer, their business, risk profile and expected source of funds?”
So please, keep this in the back of your mind as you start making money.
You may eventually be asked to provide evidence of your source of funds or source of wealth.
Salary? Business income? Consulting fees? Dividend income? Sale of shares? Property sale? Inheritance? A loan? A foreign remittance? Crypto gains? Whatever it is, there may come a point where you need to show that the money actually came from somewhere legitimate — and that the explanation matches the money entering your account.
For example:
- You invested ₦5 million gradually from your salary and investment proceeds over three years. Your payslips, bank statements, tax records and investment statements can help explain that.
- You sold a property for ₦180 million. Keep the sale agreement, title documents, evidence of payment, your lawyer’s correspondence and bank-credit records.
- Your business received ₦75 million from a client. Keep the contract, invoice, delivery evidence, CAC documents, tax filings and business-account statements.
- You received an inheritance. Keep the probate documents, letter of administration, will where applicable, estate-account records and transfer evidence.
- You made money from shares, mutual funds or other investments. Keep your contract notes, account statements, dividend records and evidence of the original capital you invested.
The CBN’s Customer Due Diligence Regulations require financial institutions to obtain sufficient information about the funds entering a customer’s account, including the customer’s occupation, business activities, sources of income and expected origin of funds. They must also keep monitoring transactions to see whether they align with what they know about you.
That means someone whose account normally receives ₦350,000 monthly salary can be asked questions if ₦80 million suddenly lands in the account, especially if there is no visible explanation, documentation or history behind it.
It does not automatically mean you have done anything wrong.
It means the institution has a legal obligation to ask reasonable questions before allowing its platform to be used for money laundering, fraud, terrorism financing, tax evasion or other financial crimes. SEC rules specifically require capital-market operators to conduct due diligence when a relationship begins, where customer information becomes doubtful, when there is suspicion, and as part of ongoing monitoring of transactions.
And no, they are not necessarily “after your money”.
They simply need to be able to answer the very boring but very important question:
“Where did this money come from, and does the explanation make sense?”
Where the customer is classified as higher risk, the questions can become more detailed. The CBN regulations allow enhanced due diligence, which may include asking for additional information about occupation, assets, source of funds, source of wealth, the reason for a transaction and, in some situations, requiring management approval before a relationship or transaction continues.
If a platform cannot complete the required due diligence, it may be unable to process the transaction or continue the relationship. That is why ignoring compliance emails, refusing to submit documents or sending vague replies like “I do business” can become a problem.
So as you are praying for your ₦100m, ₦500m and ₦1bn era, also build a documentation culture.
Keep your:
- Invoices and client contracts
- Payslips and employment letters
- Tax records, TIN details and tax-clearance documents where applicable
- Business registration and CAC documents
- Business-account statements and audited accounts where available
- Investment statements, broker contract notes and dividend records
- Property purchase and sale agreements
- Loan agreements and repayment records
- Inheritance and estate documents
- Receipts, transfer confirmations and correspondence connected to major transactions
Because making the money is one thing.
Being able to explain where the money came from, calmly, clearly and with documents when somebody asks is another thing entirely.
Important legal nuance
“Source of funds” and “source of wealth” are related, but they are not exactly the same:
| Term | Simple meaning | Example |
|---|---|---|
| Source of funds | Where the particular money in this transaction came from | “This ₦25m came from the sale of my shares.” |
| Source of wealth | How you became financially capable of having that money generally | “I built wealth over 12 years through my logistics company, salary, property and investments.” |
A platform may ask for either or both, depending on the risk assessment. For higher-risk customers, the CBN regulations expressly provide for enquiries into both source of funds and source of wealth.