Recently, the Central Bank of Nigeria (CBN) imposed ₦1 billion fines on two major unicorns in the country’s fintech sector, Moniepoint and OPay, during the second quarter of 2024. This action was part of the CBN’s increased scrutiny of fintech startups, uncovering compliance issues during a routine audit of the sector. The penalties were a standard procedure following regulatory checks on banks and financial institutions under CBN oversight.
While the specific details of fines for other fintech companies remain undisclosed, at least four additional firms faced penalties from the CBN.
The CBN has been utilizing fines more frequently to ensure regulatory compliance. In the past, Nigerian banks paid substantial penalties, with a notable ₦15 billion fine imposed on ten commercial banks by the CBN and the Securities and Exchange Commission (SEC) for infractions in early 2024.
The fintech sector in Nigeria, previously operating with minimal CBN involvement, has come under increased scrutiny due to the rapid growth of companies like OPay and Moniepoint. These companies, serving millions of users, have raised concerns about their regulatory frameworks. A key issue is that many fintechs, including OPay and Moniepoint, operate under microfinance bank licenses, originally intended for supporting small enterprises. However, as these companies expanded to cater to a large customer base, questions have been raised about the effectiveness of the current licensing framework in adequately protecting customers.
In addition to licensing concerns, the CBN has raised issues about fintechs’ compliance with Know Your Customer (KYC) processes. Earlier in 2024, the central bank imposed a temporary ban on customer onboarding for several fintech companies, compelling them to enhance their compliance measures.
While Moniepoint chose not to provide comments on the matter, OPay denied the claims of being fined by the CBN for regulatory infractions. The Central Bank of Nigeria did not immediately respond to requests for comments.
Editor’s note: A previous version of this story incorrectly stated the amount fined to banks as ₦1.5 billion, the correct figure being ₦15 billion.