With Nigeria’s financial system increasingly reliant on fintech platforms, the country’s central bank is proposing a new licensing regime for players in the fast-growing sector. In a draft policy document, the CBA says that the emergence of fintech firms “accentuates the known risks within the financial system”.
In response, the central bank is prepping a new licensing regime for all fintech firms and payment service providers in an effort to tackle concerns around cyber risks, capital adequacy, operational oversight. Under the plans, there will three types of license – basic, standard and super – each of which will allow companies to carry out different activities.
The license could prove a barrier to entry for small startups. To gain a basic license, a firm will need a minimum $275,000 in shareholder funds, with a super licence requiring closer to $14 million. Nigeria has fallen behind some other African countries in the fintech arena, especially in mobile money. The country has recently moved to address this by enabling telcos to apply for payment service banking licenses.
South Africa-based MTN is one of the firms that has said that it plans to apply for a license, despite its recent court tussle with the Central Bank of Nigeria over claims the firm depleted the country’s forex reserves. Finextra
Pix: CBN governor, Godwin Emefiele
