Fintechs Face Regulatory Challenges in MFB Acquisitions

Babatunde Akin-Moses, founder of Nigerian fintech Sycamore, cautioned that fintech companies aiming to expand into deposit-taking through microfinance bank acquisitions must consider the regulatory, governance, and operational obligations that accompany such transactions. Akin-Moses shared insights from Sycamore's experience in this area, stressing the necessity for thorough due diligence when pursuing acquisitions in the regulated financial sector.

He noted that acquiring a regulated institution entails assuming its regulatory history and operational responsibilities, which should be integrated into the business strategy rather than addressed post-establishment. Akin-Moses highlighted the increasing regulatory enforcement in Nigeria's microfinance banking sector, referencing the Central Bank of Nigeria's (CBN) actions, including the revocation of 46 MFB licenses due to deficiencies.

He pointed out that fintechs are increasingly acquiring regulated institutions to gain control over financial services, with the CBN having upgraded certain fintech and MFB licenses to national status in January 2026.