….as Experts urge stricter oversight, consumer protection
By Sodiq Adelakun and Mathew Denis
As Nigeria’s digital lenders quietly build customer bases that now run into the millions, financial experts said the Central Bank of Nigeria’s decision to upgrade FinTech licences is a long-overdue response to a sector that has outgrown its original regulatory boundaries.
They described the Central Bank of Nigeria’s (CBN) recent upgrade of licences for selected financial technology companies as a timely intervention that could deepen financial inclusion, improve consumer protection and strengthen confidence in Nigeria’s rapidly expanding digital finance sector.
The decision follows years of rapid growth in the FinTech space, driven by mobile payments, agent banking and digital lending platforms that now serve millions of Nigerians across urban and rural communities.
Many of these operators were originally licensed to operate within limited geographic scopes, despite building nationwide customer bases.
According to the CBN, the licence upgrades are aimed at aligning regulation with the operational realities of FinTechs whose activities now extend across the country.
In an interview with our Nigerian NewsDirect, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said the upgrade reflects the rising influence of FinTechs within Nigeria’s financial system.
He said: “Some of them are even stronger than our traditional banks now when you consider their customer base, turnover and overall contribution to financial inclusion.”
He noted that digital lenders have already become critical players nationwide, making their elevation to national status both logical and necessary.
“Giving them the opportunity to operate as national institutions is not a bad idea. It only shows that the FinTech space is getting bigger and more relevant. For me, it is a welcome development,” he added.
Industry analysts say one of the major benefits of the licence upgrade is the clarity it provides. National status gives FinTechs the legal backing to operate across Nigeria without geographic restrictions, eliminating long-standing regulatory grey areas.
The Director of the CBN’s Other Financial Institutions Supervision Department, Mr Yemi Solaja, said the move was necessary because some institutions had grown far beyond the scope of their original licences.
“In reality, their operations are already all over the country,” he said, adding that the mismatch posed risks to effective regulation.
With national licences, FinTechs can now expand agent networks, scale lending operations and deepen partnerships with businesses and government institutions in a more structured manner.
The experts said the upgrade also enhances the credibility of FinTechs, placing them closer to traditional banks in regulatory standing.
This is expected to boost confidence among customers, investors and international partners.
Market observers believe national licensing could improve access to long-term funding, support larger transaction volumes and strengthen collaboration with conventional banks, particularly in payments and credit delivery.
As more SMEs and large corporates rely on digital platforms for banking services, the licence upgrade signals regulatory endorsement of FinTechs as mainstream financial institutions.
Stricter compliance seen as necessary trade-off
While experts welcome the benefits, they agree that national status must come with stricter compliance obligations.
Dr Yusuf stressed that increased supervision is essential given the scale at which FinTechs now operate.
“More people are banking with these platforms, including SMEs and big companies. We need to manage the risk of anything going wrong, which means a much more rigorous compliance and supervisory framework,” he said.
The CBN has already raised capital requirements for national microfinance banks and signalled tighter enforcement of governance and know-your-customer standards.
Consumer protection and physical presence
Despite their digital focus, the CBN has insisted that nationally licensed FinTechs maintain physical offices in strategic locations across the country. Regulators say this will improve dispute resolution, accountability and consumer confidence, particularly for customers in the informal economy.
In the same vein, Founder of the Arewa Institute for Organised Private Sector Development, Bashir Ado Dahiru, said the licence upgrades have the potential to fast-track digital connectivity and financial inclusion at the grassroots.
He described the policy as positive but called for stronger technology infrastructure, clearer operational structures and sustained advocacy to deepen public awareness of digital financial services.
Also, Miss Shalom Merari, a financial sector worker, said the upgrade reflects the vital role FinTechs now play in easing cash-access challenges across the country.
“The services rendered by these platforms speak volumes. They have helped bridge the gap in areas where traditional banks are absent,” she said, urging operators to invest more in network stability and customer experience.
Chairman of Leadership Peace Development Practice, Dr Kayode Pelumi, cautioned that credibility must remain a priority as FinTechs assume national status.
“Because these institutions are largely online-based, public trust is crucial. The CBN must ensure that they have strong structures across the country to resolve customer complaints and operational issues,” he said.
Experts reiterated that the CBN’s licence upgrade policy represents a broader shift towards formalising the role of FinTechs within Nigeria’s financial system, balancing innovation with stability.
By recognising the scale and impact of digital lenders while tightening oversight, the regulator aims to harness their reach to deepen financial inclusion, reduce cash dependency and strengthen financial stability.