Bill to Regulate Fintech in Nigeria Passes Second Reading

Nigeria’s National Assembly is moving closer to setting up a special Fintech Regulatory Commission, after passing a new bill through a second reading in the House of Representatives.

The bill, sponsored by Fuad Laguda of the Surulere I Federal Constituency of Lagos State, seeks to regulate Nigeria’s booming digital finance sector.

During his address to the plenary on Tuesday, Laguda said the commission would create a clear legal framework for operations within Nigeria’s fintech market, which has become an integral part of daily financial transactions.

“Regulation is exponentially needed in the last few years. The lack of clear guidance has created questions regarding consumer protection, financial stability, and financial crime prevention,” Laguda said.

He stated that the new body will implement operation rules, protect consumers, and encourage innovation without stifling growth. The legislator also stated the body will plug loopholes left by existing regulators such as the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC), and the National Information Technology Development Agency (NITDA) — all of which have been behind the curve in keeping up with technological evolution.

Balancing Innovation and Regulation

Nigeria’s fintech industry has grown dramatically in the past few years, transforming how millions of people send, receive, and manage money. That growth has also introduced new risks. In October 2024, the SEC said that it would boost its regulation of fintech companies to prevent abuse of funds and improve compliance.

Laguda imagines one regulatory agency would balance the appropriate innovation and accountability. With the uniform rules, the Fintech Regulatory Commission would be in a position to protect consumers without inhibiting startups from innovation in an ever-changing environment.