The Central Bank of Nigeria (CBN) has intensified its oversight on the fintech sector, imposing ₦1 billion fines on two of Nigeria’s fintech unicorns, Moniepoint and OPay, in the second quarter of 2024. 

The fines stemmed from a routine audit conducted by the CBN to ensure compliance with regulatory standards. The inspections, standard procedure for all financial institutions under CBN’s jurisdiction, flagged several issues across the fintech ecosystem. While at least four other fintech companies were reportedly penalised, Moniepoint and OPay were the most heavily fined.

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Sources with direct knowledge of the penalties confirmed the action, citing compliance lapses as the basis for the fines.

Increased scrutiny of fintech operations

Nigeria’s burgeoning fintech sector has seen rapid growth, with companies like OPay and Moniepoint playing significant roles in financial inclusion and digital payments. OPay boasts a user base of approximately 40 million, while Moniepoint handled 5.2 billion transactions in 2023 alone. Despite their success, concerns about their regulatory frameworks have grown alongside their market dominance.

Many fintechs, including OPay and Moniepoint, continue to operate under microfinance bank licenses, originally designed to support smaller-scale enterprises. Critics argue these licenses are ill-equipped to regulate the large-scale operations of today’s fintech giants.

The CBN has also voiced concerns about fintechs’ adherence to Know Your Customer (KYC) standards. In April 2024, the central bank imposed a temporary onboarding ban on several fintech companies, including Kuda Bank and Palmpay, citing deficiencies in KYC compliance. The ban pushed these firms to overhaul their onboarding procedures to align with regulatory requirements.

Read also: Opay, Moniepoint, others begin N50 stamp duty deductions on transactions exceeding N10,000

Industry-wide implications

The penalties highlight the CBN’s increasing reliance on financial sanctions to enforce compliance. In 2023, Nigerian banks collectively paid ₦678 million in fines. More recently, in October 2024, the CBN, in collaboration with the Securities and Exchange Commission (SEC), levied a ₦15 billion fine on 10 commercial banks for various infractions.

Moniepoint declined to comment on the fine. However, OPay denied the claim to TechCabal, stating: “We categorically refute the claims that OPay Digital Services was fined by the Central Bank of Nigeria to the tune of ₦1 billion for regulatory infractions. These claims are entirely false.” 

As the fintech sector grows, regulatory scrutiny is expected to intensify, particularly for major players. The CBN’s recent actions underscore the need for stricter licensing frameworks and enhanced compliance measures to safeguard customers and foster sustainable growth within the ecosystem.