Resolving the Legal and Regulatory Challenges of Fintech in Nigeria

Financial technology (Fintech) providers have become an integral part of the financial services sector, creating a wide range of products and services, which have made money management easier and faster. Nigeria hosts over 200 Fintech providers, the most prominent are Flutterwave, Interswitch, Paystack, Paga, Carbon, Remita, VoguePay, OPay Libya, Kuda and Piggyvest. These Fintech providers offer services such as Crowdfunding, Mobile payments, Robo-Advisors, Insuretech and Regtech. Investments in Global Fintech in 2020 was over USD 100 Billion and is expected to grow in 2021.   According to the Central Bank of Nigeria, Fintech providers attracted at least USD 1 billion in Foreign Direct Investments into the country in the last six years.


The rapid growth of Fintech has strengthened the belief that Fintech will disrupt banking. But collaboration and not competition will advance the interest of banks and Fintech providers. The major challenge with the fintech space is the lack of clarity in policy and legislation. This article highlights the legal and regulatory challenges of fintech providers in Nigeria and proposes solutions to resolving these challenges.



The Fintech Regulatory Framework in Nigeria

There is a wide range of regulators that govern fintech providers in Nigeria. Some regulators have broad jurisdiction and some focus on specific activities. The following is a (non-exhaustive) list of the key Nigeria regulators with which fintech providers may have to register and comply.


  1. Central Bank of Nigeria

The Central Bank of Nigeria (CBN) is the primary regulator of the Financial Services Sector in Nigeria. The CBN has made regulations that impact Fintech in Nigeria. These regulations include:

  • Guidelines on Mobile Money Services in Nigeria;
  • Guidelines on International Money Transfer Services in Nigeria;
  • Guidelines on International Mobile Money Remittance Services in Nigeria
  • Regulatory Framework for the Use of Unstructured Supplementary Service Data (USSD) for Financial Services in Nigeria.
  • Guidelines on Operations of Electronic Payment Channels in Nigeria
  • Guidelines for Licensing and Regulation of Payment Service Banks
  • Regulatory Framework for Sandbox Operation, 2021

Other than the CBN, there are other regulators and laws. Some of which include:


  1. Other regulators

  • The National Information Technology Development Agency (NITDA)
  • Federal Competition and Consumer Protection Commission
  • National Communication Commission (NCC)
  • Securities and Exchange Commission (SEC)
  • Corporate Affairs Commission (CAC)
  • Federal Inland Revenue Service (FIRS)
  • Federal Ministry of Trade and Investment
  • National Office for Trade Acquisition and Promotion (NOTAP)


  1. Other laws

  • The Nigerian Investment Promotion Commission Act 16 of 1995
  • Value Added Tax Act Cap V1, LFN 2004
  • Companies and Allied Matters Act, 2020 (as amended);
  • Money Laundering (Prohibition) Act, 2011 (as amended);
  • Corrupt Practices and other Related Offences Act, 2000;
  • Economic and Financial Crimes Commission (Establishment, Etc.) Act, 2004;
  • Terrorism (Prevention) Act, 2011 (as amended);
  • Cybercrimes (Prohibition, Prevention, Etc.) Act, 2015
  • Nigerian Data Protection Regulations, 2019 (NDPR)
  • Foreign Exchange (Monitoring and Miscellaneous provisions) NO. 17. 1995 ACT CAP F34 LFN 2004.



Challenges with Existing Regulatory Framework

  1. Absence of a holistic, unified legislation

There is no holistic, unified legislation for Fintech in Nigeria. The different regulatory agencies have regulations that impact Fintech providers in different ways. Most of these regulations are not clear; sometimes overlapping and contradictory.


  1. Multiple regulators

The agencies and departments of government regulating Fintech providers in Nigeria are too many leading to cumbersome regulatory requirements, processes and procedures which can be very challenging.


  1. No champions/unified body pushing for reforms

There appears to be no formidable body or champions dedicated to pushing for regulatory reforms in the Fintech sector. It enables discretionary regulation without consultation/dialogue with the Fintech community.



Suggested Interventions

  1. Introduction/passage of a Fintech Bill at the National Assembly

The National Assembly should pass a legislation for Fintech providers in Nigeria. The Nigeria Startup Bill currently being midwifed by the Presidency and some stakeholders may be the silver bullet the industry needs. The focus should be on creating a business-friendly environment for fintech providers and not only revenue generation.


  1. Establishment of a financial services’ regulatory agency of Nigeria

Government should establish a Financial Services Regulatory Agency of Nigeria which will be dedicated solely to the regulation of the Financial Services Sector, especially Fintech providers. It will enable the CBN to focus on its primary function, which is monetary policy stability.


  1. Establishment of a one-stop regulatory centre for fintech

Alternatively, a One-Stop Regulatory Centre for Fintech providers can be established just like the One-Stop Investment Centre (OSIC) that caters for all the regulatory affairs of (foreign) investors.  This will ease problems associated with dealing with different regulatory agencies.




The Fintech industry in Nigeria will continue to grow exponentially because of its huge revenue potential. Rather than focusing almost exclusively on revenue opportunities, the Government should assist by creating a well-organized, national regulatory regime that holds tech companies accountable while encouraging innovation and healthy competition.




Co-Written By:

Collins Okeke

Collins Okeke

Collins Okeke is the Head of Public Sector Practice Group, an aspect of law that examines the role of laws, institutions and legal systems in both domestic and international jurisdictions.

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Ayotomiwa I. Adebanjo

Tomiwa is an Associate at OAL. She is an innovative young lawyer with a passion for the Corporate/Commercial industry and a knack for excellence.

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