CBN Report Reveals Sharp Divide in Nigeria’s Fintech Industry Over Regulatory Environment

Nigeria’s fintech ecosystem is split down the middle on how supportive the country’s regulatory framework really is, according to the CBN Fintech Report 2025 released on Monday. The survey found that while half of fintech operators believe regulation enables innovation, the other half say it restricts growth, reflecting lingering uncertainty in Africa’s largest digital finance market.

The Central Bank of Nigeria said the division stems largely from licensing delays, unclear regulatory guidance, and uneven enforcement across agencies, despite growing engagement between regulators and industry players. Drawing from a nationwide survey, stakeholder workshops, and the October 2025 Fintech Roundtable, the report noted that 62.5 per cent of firms experience approval timelines that significantly delay product launches, with more than a third taking over a year to bring new services to market.

Compliance costs were identified as an even bigger obstacle. About 87.5 per cent of fintech firms said spending on regulatory and risk-management requirements — including anti-money laundering controls, cybersecurity, and fraud prevention — limits their capacity to innovate. While firms acknowledged the importance of these safeguards, many complained that fragmented supervision and duplicative reporting disproportionately affect smaller and fast-growing companies.

Despite the frictions, fintech operators are not pushing for deregulation. Instead, 75 per cent of respondents called for structured, predictable engagement with regulators, while all surveyed firms expressed willingness to collaborate through regulatory sandboxes and policy pilots. Regional expansion also remains a key ambition, though operators warned that fragmented licensing regimes across Africa increase costs, prompting calls for regulatory passporting across markets such as Ghana, Kenya, South Africa, and Senegal.

The report also highlighted technology and risk trends shaping the sector. Nearly 87.5 per cent of Nigerian fintechs now use artificial intelligence for fraud detection, while others deploy AI for customer service, credit scoring, and onboarding. CBN Governor Olayemi Cardoso said the findings reflect both progress and unresolved tensions, stressing that Nigeria must “strike the right balance” between encouraging innovation and maintaining financial stability, consumer protection, and public confidence.

source: punch