The Central Bank of Nigeria (CBN) has fined Moniepoint and OPay, two of Nigeria’s leading fintech unicorns, ₦1 billion each following compliance issues identified during a routine audit. According to sources with direct knowledge of the matter, the penalties were part of a broader effort by the regulator to tighten oversight of Nigeria’s fast-growing fintech sector.
At least four other fintech companies were also penalized during the audit, although details of their fines remain undisclosed.
Fintechs Under the CBN’s Radar
The fines reflect the CBN’s increased scrutiny of Nigeria’s fintech ecosystem, which has seen rapid growth in recent years. Companies like Moniepoint and OPay have expanded significantly, with OPay boasting 40 million users and Moniepoint processing 5.2 billion transactions in 2023.
However, concerns have grown over their regulatory compliance:
- Licensing Issues:
Many fintechs operate under microfinance bank (MFB) licenses, which were initially designed to support smaller-scale businesses. The CBN has expressed concerns that these licenses may no longer adequately regulate the large-scale operations of fintech giants. - KYC Non-Compliance:
The central bank has also flagged lapses in Know Your Customer (KYC) processes. In April 2024, it imposed a two-month onboarding ban on several fintechs, including Kuda Bank and Palmpay, forcing them to overhaul their compliance measures.
Industry Reactions
- OPay’s Denial:
In a statement to TechCabal, OPay denied the fine, stating:“We categorically refute the claims that OPay Digital Services was fined by the Central Bank of Nigeria to the tune of ₦1 billion for regulatory infractions. These claims are entirely false.”
- Moniepoint:
Moniepoint declined to comment on the matter. - CBN’s Approach:
While the CBN did not immediately respond to requests for comments, it has increasingly relied on fines to enforce regulatory compliance. In 2023, Nigerian banks paid ₦678 million in penalties, and in October 2024, the CBN and SEC imposed a ₦15 billion fine on ten commercial banks, including Zenith and GTBank.
What’s Driving the CBN’s Actions?
The growing influence of fintechs has heightened regulatory concerns:
- Customer Safeguards: With millions of users depending on these platforms, ensuring robust compliance frameworks is essential to protecting customers.
- Systemic Risk: As fintechs expand, they play a larger role in Nigeria’s financial ecosystem, necessitating tighter oversight to prevent systemic vulnerabilities.
Implications for Nigeria’s Fintech Ecosystem
- Stronger Regulatory Oversight:
The CBN’s actions indicate a shift toward stricter regulation of fintech operations. Startups may need to reassess their licensing frameworks and compliance systems to align with evolving requirements. - Operational Adjustments:
The penalties and prior bans signal that non-compliance could lead to significant disruptions, forcing fintechs to prioritize regulatory adherence. - Investor Sentiment:
Increased scrutiny might concern investors in the short term but could bolster long-term confidence in the sector by establishing a more secure operating environment.
Conclusion
The CBN’s heightened oversight underscores the growing pains of Nigeria’s rapidly expanding fintech ecosystem. As fintech giants like Moniepoint and OPay navigate these challenges, their ability to adapt to stricter regulatory requirements will determine their resilience and continued success in the market.
While the fines serve as a wake-up call for the industry, they also highlight the need for clear, scalable regulatory frameworks that support innovation while safeguarding consumers.