CBN To Strengthen Oversight Of Fintech Sector Amid Growing Risks
Abuja – The Central Bank of Nigeria (CBN) has raised concerns over weak oversight in the country’s booming fintech sector, warning that insufficient regulation could pose a direct threat to financial stability.
In a newly released report, the apex bank noted that rapid innovation in digital financial services has outpaced current regulatory safeguards, making Nigeria Africa’s most vibrant—but also most exposed—digital market.
Fintech firms now process over 70 percent of electronic payments, handling billions of naira in daily transactions. Banks and fintech companies are increasingly interconnected through shared payment infrastructure, creating the risk that a single failure in the fintech space could trigger shocks across the broader economy.
The report also highlights the benefits of fintech expansion, including significant improvements in credit access for underserved populations through digital lending and wallet services. However, the CBN flagged rising complaints regarding predatory lending practices and breaches of data privacy.
To address these challenges, the regulator is proposing stricter licensing requirements and higher capital thresholds for fintech operators. The CBN also plans to evolve from a traditional gatekeeper to an enabler of disciplined innovation, deploying technology-driven regulation to accelerate product approval cycles, which currently take more than a year.
The new framework seeks to balance rapid fintech growth with robust consumer protection and systemic resilience, ensuring the sector contributes to financial inclusion without compromising stability.
