KEY POINTS
- Stakeholders in the digital finance sector have voiced support for the establishment of the Nigerian Fintech Regulatory Commission (NFRC) to license and supervise fintech companies.
- The support was expressed during a public hearing in Abuja organized by the House of Representatives Joint Committee on Banking and Technology.
- The Association of Mobile Money and Bank Agents in Nigeria (AMMBAN) backed the bill, emphasizing its potential to improve transparency and consumer protection.
- Industry leaders warned of potential “regulatory overlap” with the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC), which could lead to dual licensing and increased costs.
MAIN STORY
Key players in Nigeria’s digital financial sub-sector have signaled their support for a proposed law to establish the Nigerian Fintech Regulatory Commission (NFRC). During a public hearing in Abuja on Monday, stakeholders told the House of Representatives Joint Committee on Banking and Technology that a dedicated commission is necessary to keep pace with the rapidly evolving fintech market.
Mr. Obioha Oti, Acting National Chairman of AMMBAN, welcomed the bill as a move toward greater financial stability. However, he stressed that POS agents and mobile money operators must be integrated into the new framework, as they serve as the “last line” for financial inclusion in underserved areas. While the bill aims to formalize fintech as a strategic economic sector, some experts worry about the practicalities of its enforcement.
Ms. Mojisola Ologe, Chief Compliance Officer of Hydrogen Payment Services, praised the National Assembly for the initiative but raised red flags regarding Clause 31, which imposes heavy fines and imprisonment for unlicensed activities. She argued that “over-criminalization” could scare away foreign investors and recommended a compliance window instead of immediate harsh sanctions. Furthermore, stakeholders called for the creation of a Fintech Regulatory Appeals Tribunal and clearer data protection safeguards to ensure the law aligns with the Nigeria Data Protection Act 2023.
WHAT’S BEING SAID
- “We believe it is a welcome development that will strengthen transparency, consumer protection and financial stability,” stated Obioha Oti, Acting National Chairman of AMMBAN.
- Mojisola Ologe warned of the risks: “Without a clear non-derogation clause… there can be dual licensing, conflicting compliance obligations, [and] increased regulatory cost.”
- On the legal framework, Ologe added: “We recommend the establishment of a Fintech Regulatory Appeals Tribunal to enhance credibility and investor confidence.”
WHAT’S NEXT
- The House Joint Committee will review the recommendations regarding regulatory overlap with the CBN and SEC before the bill moves to the next stage.
- Lawmakers are expected to consider how to officially include POS agents in the regulatory hierarchy.
- There will likely be a push to explicitly align the bill’s document production powers with existing 2023 data protection laws.
BOTTOM LINE
The Bottom Line is that while the fintech industry welcomes formal recognition through the NFRC, there is a strong demand for “smart regulation” that avoids stifling innovation. To succeed, the bill must resolve potential turf wars between new and old regulators while protecting the data and rights of digital finance providers.
. During a public hearing in Abuja on Monday, stakeholders told the House of Representatives Joint Committee on Banking and Technology that a dedicated commission is necessary to keep pace with the rapidly evolving fintech market.){kind=link}