CBN Warns Nigeria's Fintech Sector of Foreign Capital Risks, Emphasizes Domestic Funding and Regulatory Modernization

The Central Bank of Nigeria (CBN) cautions that Nigeria's fintech sector, which attracted $520 million in equity funding in 2024, remains exposed to global market shocks due to its heavy dependence on foreign investments. Despite the sector's resilience, the CBN highlights the importance of developing domestic funding avenues and enhancing regulatory frameworks to reduce currency risks and sustain fintech growth.

Governor Olayemi Cardoso notes Nigeria's rapid financial transformation and fintech expansion, emphasizing the need for strengthening digital financial infrastructure. The report underscores Nigeria's leadership in digital financial infrastructure, with 25% of electronic transactions processed in real-time payment channels.

However, regulatory costs pose a significant challenge, with 87.5% of fintech stakeholders citing compliance expenses as a constraint to innovation. The CBN stresses the necessity of stable domestic funding and coordinated regulatory oversight for the successful expansion of the fintech sector within Africa.