Earlier this week, the Central Bank of Nigeria (CBN) unveiled the regulatory framework for sandbox operations that will help control how new tech-based financial products/services are launched into the Nigerian market.

In a 16-paged circular that was sent to all deposit money banks and fintech firms (especially those offering mobile money and payments services), the CBN explained that the regulatory sandbox will serve as “a formal process for firms to conduct live tests of new, innovative products, services, delivery channels, or business models in a controlled environment, with regulatory oversight subject to appropriate conditions and safeguards.”

Explore the Advanced Financial Calculators On Nairametrics

This is also intended to make it possible for the apex bank to adequately keep up with the latest innovations by banks and fintechs, whilst ultimately engendering a reliable, safe, and efficient payment system in the country. See the full breakdown of the regulatory sandbox operation below:

• To increase the potential for innovative business models that advance financial inclusion
• To reduce time-to-market for innovative products, services, and business models
• To increase competition, widen consumers’ choice and lower costs
• To ensure appropriate consumer protection safeguards in innovative products;
• To clearly define the roles and responsibilities of stakeholders and the operations of the Sandbox for the Nigerian Payments System industry
• To ensure adequate provisions in regulations to create an enabling environment for innovation without compromising on safety for consumers and the overall payments system
• To provide an avenue for regulatory engagement with fintech firms in the payment space, while contributing to economic growth.

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Based on the last objective above, it can be seen that this is yet another major step the Central Bank of Nigeria has taken towards regulating the Nigerian fintech space. Back in 2018, the apex bank had taken a major step by announcing the minimum capital for mobile money operators in Nigeria. Now, it is set to regulate how new products and services are launched by mobile money operators and digital payment service providers.

To find out more about the CBN’s draft framework for regulatory sandbox operations, click here.

Chipper Cash, which offers payment services across African countries (including Nigeria), has raised $13.8 million Series A funding.

Nairametrics understands that the funding round was led by Deciens Capital, a US-based venture capital and private equity firm.

The fresh capital would enable the fintech firm (i.e., Chipper Cash) to recruit about thirty new talents for its operations in places like Lagos, Nairobi, London, New York, and San Francisco where the company is based.

The latest fundraising brings the total amount so far raised by the company to $22 million. This is happening barely two years after the payments company was established by two African students in the USA – Maijid Moujaled from Ghana and Ham Serunjogi from Uganda.

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The service was introduced to the Nigerian fintech space following its establishment. And today, it is one of the top players in the field where it competes with the likes of Paga, Paystack, and even Opay.

Perhaps what is unique about Chipper Cash is the fact that its P2P payment service attracts no fees. It should, however, be noted that the company also offers fee-based, merchant-focused service called Chipper Checkout, which enables the fintech to generate revenue.

TechCrunch spoke to Ham Serunjogi, one of the co-founders, about the company’s performance. He said:

“We’re now at over one and a half million users and doing over a $100 million dollars a month in volume.” 

READ ALSO: New report details how Nigerian fintech companies are expanding their business scopes

The latest fundraising follows a recent  trend whereby Africa’s fintech startups have been attracting the most venture capital investments. In 2019 alone, African fintechs were responsible for an estimated $2 billion in VC fundings.

A bulk of those funds come to Nigeria, which has arguably become Africa’s fintech capital.

The fintech revolution in Nigeria has happened in less than a decade, disrupting the modus operandi in the financial services industry whilst availing financial services to those who were hitherto un-banked.

As Nigerian fintech companies continue to steadily transform from small startups to major corporations, experts have advised that it is now time for them to begin re-skilling in order to ensure the overall success of their businesses.

The need to re-skill became imperative following the discovery of skills gaps in the Nigerian fintech space. The discovery is part of new research findings on the current state of things in the fintech industry. Nairametrics published an earlier report about the research which was sponsored by MasterCard and MTN Group.

Focus on the skills gaps in the Nigerian fintech space

According to the report — State of play: Fintech in Nigeria —  there have been skills gaps in the fintech space, particularly in the areas of business management, corporate governance, and marketing. Apparently, these are skills that are outside of the core of the fintech business which is coding. This notwithstanding, they are needed in order to ensure long-term success for these fintechs.

The report quoted Olayinka David-West of the Lagos Business School to have stated that beyond coding, essential business knowledge is highly needed by these fintechs to ensure sustainable revenue generation and profitability.

Meanwhile, the head of growth at Paystack, Emmanuel Quartey, admitted that there is, indeed, a dearth of other vital skills in the Nigerian fintech industry. According to him, his organisation finds it difficult to fill marketing roles because of this dearth of skills. He said:

“Finding someone articulate who understands how to bring a product to market and create strong engagement and retention, is tough. Much of the current training out there is around teaching people how to code. We are now seeing a new wave of focus on product management. I think the next wave will be a focus on branding and marketing.”

Why this is a peculiar problem for fintechs

Quartey went further to note that when compared to other tech companies, Nigerian fintechs are faced with unique skills challenges. And this is due to the need for compliance. He then explained, stating that “there are very strong compliance requirements you need to meet in order to run a fintech. If you are building a photo-sharing app it’s easier to have a team of mostly engineers. But in fintech, you need a team focused on compliance as well as fraud, so that’s something you have to build out too.”

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In the meantime, Nigeria’s brain drain problem has been identified as a major problem that might be making it difficult for Nigerian fintech companies to find the right fits for some essentials. While commenting on this issue, Olayinka David-West of the Lagos Business School said “the pool of employable talent emigrating to places like Canada scares me. My question for corporate Nigeria is, what is our replacement strategy for these workers?”

You may download State of play: Fintech in Nigeria by clicking here.