TDThe Federal Government, through the Central Bank of Nigeria (CBN), has approved the upgrade of licences held by major financial technology (fintech) companies and selected microfinance banks (MFBs), granting them national operating status across Nigeria’s 36 states and the Federal Capital Territory (FCT).
The affected institutions include leading digital finance platforms such as Opay, Moniepoint, Kuda, PalmPay, and Paga, which have rapidly expanded their customer base beyond regional boundaries. The CBN’s decision formally recognises the nationwide reach these institutions already enjoy and aligns their legal status with the scale of their operations.
Why the Licence Upgrade Was Necessary
According to regulators, the fintech and MFB sector has evolved far beyond its initial scope. Many of these companies now provide payment services, savings products, lending, and merchant solutions to millions of Nigerians across the country.
The licence upgrade addresses regulatory gaps by ensuring that institutions operating at a national level are supervised accordingly. Under the new framework, the affected firms will be subject to higher capital requirements, enhanced regulatory scrutiny, stronger consumer protection rules, and clearer dispute-resolution mechanisms.
Stricter Rules, Not Banking Licences
The CBN clarified that the upgrade does not convert fintech firms or microfinance banks into full-fledged commercial banks. They remain restricted from certain activities such as large-scale corporate lending and foreign exchange trading reserved for deposit money banks.
Instead, the move ensures that as these institutions scale nationally, they do so under tighter controls designed to safeguard the financial system, protect customer deposits, and prevent systemic risk.
Impact on Traditional Banks
The upgrade has significant implications for Nigeria’s traditional banking sector. Fintechs have already disrupted retail banking by offering faster, cheaper, and more accessible services, particularly in payments and digital savings.
With national licences, fintechs are expected to intensify competition for retail customers, small businesses, and underserved communities—segments where traditional banks have historically struggled with reach and cost efficiency.
However, analysts note that stricter capital and compliance requirements may slow aggressive expansion by fintechs, indirectly easing competitive pressure on banks. Traditional banks may also benefit from a more level regulatory playing field, as fintechs will now face oversight closer to that applied to conventional financial institutions.
Boost for Financial Inclusion and Consumer Confidence
The CBN believes the upgrade will strengthen Nigeria’s digital financial ecosystem by improving trust and stability. Millions of Nigerians who rely on fintech platforms—especially in rural and informal sectors—stand to benefit from better protection of their funds.
By tightening supervision while supporting innovation, the policy reinforces the government’s financial inclusion agenda, ensuring that digital finance continues to bridge gaps left by traditional banking models.
Strengthening Nigeria’s Financial System
Overall, the licence upgrade reflects a maturing financial landscape where innovation is matched with regulation. As fintechs and MFBs continue to reshape how Nigerians access financial services, the CBN’s intervention aims to balance growth, competition, and systemic stability.
Brief Bio of Affected Fintechs and Microfinance Banks
Opay:
OPAY entered the Nigerian market as a mobile payments platform and rapidly expanded into agency banking, transfers, bill payments, and merchant services.
It has built one of the largest agent networks in the country, particularly in underserved communities.
Moniepoint:
Moniepoint began as a business-focused payments and banking platform, serving small and medium-sized enterprises (SMEs).
It has since grown into a major provider of POS services and digital banking solutions for merchants nationwide.
Kuda:
Kuda launched as Nigeria’s first fully digital bank, targeting urban and tech-savvy users with app-based savings, transfers, and lending services.
Despite its “digital bank” branding, it operates under a microfinance banking licence.
PalmPay:
PalmPay operates primarily as a mobile wallet and payments platform, offering transfers, airtime, bill payments, and micro-loans.
Its wide adoption has been driven by ease of use and strong offline agent support.
Paga:
Paga is one of Nigeria’s earliest fintech companies, founded to promote financial inclusion.
It operates a nationwide agent network that provides basic banking services to individuals and small businesses, especially in areas with limited bank presence.
Summary
Collectively, these institutions serve tens of millions of Nigerians and process vast volumes of daily transactions.
Their rapid growth and nationwide reach prompted the CBN to upgrade their licences, ensuring that their operations are aligned with their scale and subjected to stronger regulatory oversight.
