The Central Bank of Nigeria (CBN) has upgraded the licences of selected FinTechs and Microfinance Banks (MFBs) with nationwide operations to national status.
The disclosure was made by Mr. Yemi Solaja, Director of the Other Financial Institutions Supervision Department (OFISD) at the CBN, during the just concluded annual conference of the Committee of Heads of Banks’ Operations (CHBOs) in Lagos.
This development is aimed at aligning licensing structures with the actual operational footprint of FinTechs and MFBs whose services now span across Nigeria, ensuring proper regulatory oversight.
At the CHBOs conference, Solaja urged for collaborations between Commercial Banks and Fintechs to address the persistence of cash outside formal banking channels, and the adoption of “Digital-First” banking operations.
What Solaja is saying
According to Mr. Solaja, the CBN observed a growing mismatch between the limited licences held by some FinTechs and their actual nationwide presence.
“Institutions like Moniepoint MFB, Opay, Kuda Bank and others have already been upgraded.”
“In reality, their activities are now all over the country.”
“Most of their customers are informal people. They need to know where to report to when there is a problem.”
He explained that the upgrade process is not automatic, with national licences granted only after institutions meet key regulatory benchmarks.
Get up to speed
FinTechs and tech-driven MFBs have rapidly expanded operations in Nigeria, driven by mobile technology and agent banking models.
Initially licensed under unit, tier-one, or tier-two frameworks, many of these operators were only permitted to serve limited regions.
- Despite these restrictions, digital banking platforms like Kuda Bank, Opay, Moniepoint, Palmpay, etc built user bases nationwide.
- Their rapid growth created a regulatory gap between their licence scope and operational reality.
- The CBN, concerned about risks posed by this mismatch, introduced reforms to match licensing to actual scale.
By upgrading these licences, the CBN is now catching up with how much these institutions have evolved in scope and scale.
More insights
The regulator stressed that national FinTechs and MFBs must maintain a physical presence in key areas despite being digitally driven.
- Physical branches help resolve disputes and serve informal sector customers who need face-to-face engagement.
- Many of these firms operate vast agent networks across rural and urban Nigeria.
- These agents are crucial in managing cash flows in areas underserved by traditional banks.
- The CBN believes the FinTechs’ reach can help tackle Nigeria’s high cash-outside-banks problem.
This reflects the apex bank’s strategy to use FinTechs as tools to deepen financial inclusion while ensuring regulatory control.
What you should know
With national licences now issued, FinTechs and MFBs are subject to stricter capital requirements and compliance standards.
- National MFBs must now meet a capital requirement of N5 billion, up from N2 billion.
- Unit MFB Tier II: N50 million; Tier I: N200 million; State MFBs: N1 billion.
- Major FinTech players like Opay, Moniepoint, Paga, Kuda Bank, etc operate under these structures.
- In 2024, the CBN slammed N1 billion penalty Moniepoint and Opay each for non-compliance with KYC standards, signaling stricter oversight on CBN’s Customer Due Diligence and KYC Regulations 2023.
The national licence upgrade reflects a broader regulatory shift to formalize digital finance players and enhance trust in Nigeria’s financial system.
