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REVEALED: Why OPay, Moniepoint Others Are Facing Regulatory Issues From FG

Published

8 months ago

May 7, 2024.

President of the Africa Fintech Network (AFN), links regulatory issues for Nigerian fintechs to their dynamic business models.
Recent CBN directive halting customer onboarding by fintechs like OPay and Kuda Bank is due to suspicions of crypto trading exploitation.
Aina emphasizes the need for innovation-friendly policies and improved corporate governance for sustainable fintech growth in Nigeria.

EKO HOT BLOG reports that President of the Africa Fintech Network (AFN), Dr. Segun Aina, has linked some of the regulatory challenges facing fintechs in Nigeria to the dynamic nature of their technology-driven business models.

Notably, the recent directive from the Central Bank of Nigeria (CBN) instructing fintechs such as OPay, Palmpay, Moniepoint, and Kuda Bank to halt onboarding new customers was prompted by suspicions of criminal exploitation of their platforms for foreign exchange maneuvers via crypto trading.

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In an interview with Nairametrics regarding the CBN’s crackdown on fintechs, Aina underscored the global challenge faced by governments and regulators in keeping pace with technology’s rapid advancements, highlighting its impact on regulatory efforts.

While acknowledging that regulations may present initial obstacles for fintechs, he cautioned against policies that could stifle innovation, emphasizing their long-term benefits for both fintech startups and the broader financial system.

“One of the fastest and most dynamic sectors today is technology because it continues to change. So, the regulators and governments have to struggle to cope with how to regulate fintech because when you say innovation, these are things that did not exist before.

Facing Regulatory Issues

“Regulation may create some encumbrances for those who are in the business, but eventually it’s going to benefit the system because it will make everyone better at the business.

“What is important is that the policies must be friendly, must recognize that there is a need to innovate, and the policymakers must make sure that they carry along all the stakeholders so that they don’t just come up with a policy that will stifle innovation because that is worse,” the AFN president stated.

Aina highlighted challenges faced by fintechs due to corporate governance deficiencies, especially as most are small businesses lacking structures comparable to commercial banks.

However, he expressed optimism that as fintechs mature, they will establish proper governance.