The Central Bank of Nigeria (CBN) has raised concerns over the rapid expansion of the country’s fintech sector, warning that weak regulatory oversight could threaten financial stability and expose consumers to significant risks.
In its newly released report titled “Shaping the Future of Fintech in Nigeria: Innovation, Inclusion and Integrity,” the apex bank acknowledged Nigeria’s position as one of Africa’s fastest-growing fintech hubs but cautioned that the pace of innovation has outstripped regulatory safeguards.
According to the CBN, fintech firms now play a critical role in Nigeria’s payment ecosystem, processing billions of naira in daily transactions and extending financial services to millions of previously unbanked and underbanked citizens. However, gaps in governance, data protection, consumer redress mechanisms and risk management have become major regulatory concerns.
The report noted that while digital lending platforms, payment service providers and wallet operators have improved access to credit and financial inclusion, they have also been linked to rising consumer complaints.
These include allegations of predatory lending, opaque pricing, data privacy breaches and aggressive debt recovery practices.
The CBN warned that failures within the fintech sector could transmit shocks to the wider financial system, particularly as banks and fintech firms become more interconnected through partnerships, shared infrastructure and payment rails.
While reaffirming its support for innovation, the bank stressed that effective regulation must strike a balance between growth, consumer protection and systemic resilience. It cautioned that innovation without adequate safeguards could create new vulnerabilities rather than sustainable prosperity.
The regulator outlined potential measures such as stricter licensing requirements, risk-based supervision, higher capital thresholds and stronger rules on cybersecurity, anti-money laundering and consumer protection.
It also emphasised the need for better coordination among regulators to prevent fragmented oversight and regulatory arbitrage.
The report further revealed that 62.5 per cent of surveyed fintech firms operate or plan to expand into other African markets, with many supporting a regulatory passporting framework to enable cross-border licence recognition.
The CBN concluded that Nigeria’s fintech future depends not only on innovation but also on credible regulation, robust institutions and accountability mechanisms that protect consumers while allowing responsible digital finance to thrive.