…Fines them N1bn each
Central Bank of Nigeria’s (CBN) has continued its crackdown on erring finetech companies in the country.
The apex bank’s hammer fell on two of the country’s most prominent unicorns, Moniepoint and OPay, which were fined N1 billion each in the second quarter of 2024.
Industry sources said several other fintech companies were also penalized, but the two firms were the hardest hit.
The penalties followed a routine CBN audit of the fintech sector, which revealed compliance issues.
According to the sources, the regulatory checks are a standard procedure for banks and financial institutions under CBN oversight.
About four other fintech companies were said to have been equally penalized, though the details of the fines were not revealed.
The CBN has often relied on fines to rein in recalcitrant fintechs to adhere to regulatory compliance.
In 2023, Nigerian banks paid a combined N678 million in penalties.
In October 2024, the Central Bank and the Securities and Exchange Commission (SEC) imposed a N15 billion fine on ten commercial banks.
Many fintechs, including OPay and Moniepoint, still operate under microfinance bank licenses.
Originally intended to support micro, small, and medium enterprises, these licenses have allowed the companies to expand rapidly and service millions of customers.
However, with that expansion comes heightened concern that the current licensing framework is inadequate to safeguard customers effectively.
For instance, OPay claims a customer base of around 40 million, while Moniepoint, which processed 5.2 billion transactions in 2023, does not disclose specific customer numbers but is similarly large.
As these fintech giants have grown in influence, so too have concerns over their regulatory frameworks.
Beyond licensing, the CBN has also expressed concerns about the fintechs’ compliance with Know Your Customer (KYC) processes.
In April 2024, the central bank imposed a two-month ban on customer onboarding for several fintech companies, including Kuda Bank and Palmpay, citing non-compliance with KYC standards.
The ban forced fintechs to overhaul their onboarding procedures and commit to improving their measures.
