The Nigerian House of Representatives, consisting of 360 members in the lower chamber of the National Assembly, is currently deliberating on a legislative proposal put forward by Hon. Fuad Kayode Laguda, who represents Lagos State. This proposed law seeks to establish the Nigerian Fintech Regulatory Commission (NFRC), a centralized authority responsible for licensing and supervising all fintech enterprises operating within Nigeria.
If enacted, the NFRC would unify regulatory duties that are presently scattered across multiple agencies, such as the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC), the National Information Technology Development Agency (NITDA), and the Nigeria Deposit Insurance Corporation (NDIC). This consolidation aims to simplify the authorization and compliance landscape by placing it under a single regulatory entity.
For a considerable time, fintech companies in Nigeria have called for a streamlined regulatory body to replace the current fragmented system, which often leads to conflicting regulations and overlapping oversight, making compliance unnecessarily complex.
According to a draft of the bill reviewed by TechCabal, fintech operators would be mandated to obtain either individual or class licenses tailored to their specific service offerings, which could include payments, lending, cryptocurrency, crowdfunding, and regulatory technology. Non-compliance with licensing or renewal protocols could attract sanctions such as suspension, license revocation, or hefty fines.
The legislation further imposes stricter compliance requirements, including the need for fintech firms to establish dedicated compliance departments and legal advisory teams, conduct regular technology audits, and ensure Nigerian participation in both ownership and executive management roles.
Beyond licensing, the NFRC would have the authority to formulate regulatory policies, define operational standards, create mechanisms for dispute resolution, enforce data privacy measures, and implement consumer protection rules, thereby providing clarity and stability to the fintech ecosystem.
The commission would also be empowered to carry out investigations-both public and confidential-demand disclosure of relevant information, and publish compliance reports. This enhanced regulatory framework implies that startups will need to invest in legal and compliance infrastructure from the beginning, while established companies must realign their operations to meet the NFRC’s standards.
To protect consumers, the NFRC would actively monitor and prevent anti-competitive practices such as predatory pricing, collusion, and market dominance abuse. This is especially significant given the widespread criticism of certain Nigerian digital lending platforms for their aggressive debt recovery tactics, which the new regulatory regime aims to curb.
Moreover, the commission would encourage interoperability and connectivity among fintech services, potentially boosting the advancement of open banking initiatives. This would guarantee that smaller fintech firms gain fair access to critical payment and data infrastructures. Acting as the chief arbitrator in disputes involving fintech companies, banks, and telecom operators, the NFRC would become the sector’s primary mediator.
The bill also emphasizes the importance of local research and development and requires fintech companies to maintain Nigerian involvement in ownership and management. Foreign fintech entities would be subject to approval based on principles of fairness and reciprocity, which may necessitate restructuring their boards or leadership teams to comply with local participation mandates.