The Central Bank of Nigeria (CBN) has intensified its scrutiny of fintech companies, imposing ₦1 billion fines on two leading unicorns, Moniepoint and OPay. The fines were issued in the second quarter of 2024 after a routine audit revealed compliance shortcomings. This marks a significant escalation in regulatory enforcement within Nigeria’s rapidly growing fintech industry.
Increasing Regulatory Oversight
CBN’s audit revealed multiple compliance issues across the fintech sector. While Moniepoint and OPay faced the highest penalties, at least four other fintech companies were also fined. However, details about their penalties remain undisclosed. Regulatory checks like these are standard procedures for financial institutions under CBN oversight, highlighting the central bank’s commitment to enforcing compliance.
A Pattern of Regulatory Fines
The CBN has increasingly used fines as a tool to enforce compliance. For instance:
- In 2023, Nigerian banks paid ₦678 million in penalties.
- In October 2024, the CBN and SEC fined ten commercial banks ₦15 billion for various infractions.
The growing influence of fintech companies has drawn heightened regulatory attention. OPay, with 40 million customers, and Moniepoint, which processed 5.2 billion transactions in 2023, represent major players in the industry.
Licensing and Compliance Challenges
A significant regulatory concern lies in licensing. Many fintech companies, including Moniepoint and OPay, operate under microfinance bank licenses. These licenses, initially designed for small enterprises, have enabled rapid expansion. However, regulators question whether this framework sufficiently protects millions of customers.
Additionally, compliance with Know Your Customer (KYC) standards remains a challenge. In April 2024, the CBN imposed a two-month ban on customer onboarding for several fintechs, including Kuda Bank and Palmpay, citing KYC non-compliance. This forced companies to revamp their onboarding processes.
Industry Reactions
Moniepoint declined to comment, while OPay denied the fine, stating:
“We categorically refute the claims that OPay Digital Services was fined ₦1 billion for regulatory infractions. These claims are entirely false.”
The CBN has not issued a statement regarding these fines.
Implications for the Fintech Sector
The fines signal a shift in regulatory attitudes toward Nigeria’s booming fintech industry. As fintechs grow in size and influence, compliance with CBN regulations becomes increasingly critical. Stricter oversight aims to ensure customer protection and financial system stability, even as the sector drives innovation and financial inclusion.
