- Nigeria’s Fintech Giants Face Increased Regulatory Pressure Over Compliance Issues
The Central Bank of Nigeria (CBN) has intensified its regulatory oversight of the fintech sector, imposing fines of ₦1 billion each on two of the nation’s leading unicorns, Moniepoint and OPay, during the second quarter of 2024.
Sources familiar with the matter revealed that these penalties stem from compliance issues uncovered during a routine audit of fintech operations.
In addition to Moniepoint and OPay, at least four other fintech firms faced penalties, although the specifics of their fines remain undisclosed. These measures highlight the CBN’s growing reliance on fines to enforce compliance, as demonstrated by a cumulative ₦678 million in penalties paid by Nigerian banks in 2023. Earlier in October 2024, the central bank and the Securities and Exchange Commission (SEC) jointly imposed a ₦15 billion fine on ten commercial banks, including Zenith Bank and GTBank, for regulatory breaches in the year’s first half.
The Nigerian fintech sector has experienced exponential growth in recent years, with companies like OPay and Moniepoint leading the charge. OPay boasts a customer base of approximately 40 million, while Moniepoint, which processed 5.2 billion transactions in 2023, has become a major player in digital financial services. However, this rapid expansion has drawn increased scrutiny, particularly regarding the licensing and compliance frameworks under which these firms operate.
A major concern for regulators is the widespread use of microfinance bank licenses by leading fintech firms. Originally designed to cater to micro, small, and medium enterprises, these licenses have enabled companies like Moniepoint and OPay to scale rapidly, but they have also raised questions about customer protection under the existing regulatory framework.
Another critical issue is the enforcement of Know Your Customer (KYC) standards. In April 2024, the CBN imposed a two-month ban on customer onboarding for several fintech firms, including Kuda Bank and Palmpay, over KYC compliance failures. The affected companies were required to overhaul their onboarding processes and commit to stricter compliance measures before resuming operations.
While Moniepoint declined to comment on the matter, OPay issued a strong rebuttal:
“We categorically refute the claims that OPay Digital Services was fined by the Central Bank of Nigeria to the tune of ₦1 billion for regulatory infractions. These claims are entirely false.”
The CBN has yet to issue an official statement regarding the fines. Observers believe the central bank’s actions signal a shift toward tighter regulation of Nigeria’s booming fintech sector, aimed at safeguarding customers and ensuring compliance across the industry.
