E-Financial
Policy, Regulation Should Bolster Innovation To Ensure Financial Inclusion Is Achieved
By Daniel Monehin
Walk through bustling marketplaces in Africa and you will see a substantial amount of money changing hands, as merchants and consumers haggle over the goods and services. What stands out is just how many of these transactions are conducted using cash, and the reason for this is because most people don’t believe they have any other pragmatic option.
There is a large number of unbanked or underbanked people on the continent, and so many individuals that don’t save or have a financial history with a formal financial institution and are therefore found on the fringes of financial services – where most transactions are carried out with cash. What this typically creates is a vicious cycle that serves to prevent most of these individuals from accessing critical financial services to better manage their finances, grow their businesses or protect themselves against eventualities.
Financial inclusion remains a challenge, particularly in developing countries. Only just over 30 percent of Sub-Saharan Africans, for instance, have any formal account. There is a collective focus by both the private and public sector on the need to find ways to bring greater numbers of people into the financial mainstream and improve their livelihoods.
One of the areas that has the greatest potential to narrow the margin of exclusion is policy and regulations. Policy surrounding financial inclusion has garnered considerable attention in the last few years, as the importance of inclusion has been aligned with financial integrity, stability and literacy.
Policy makers face the ultimate juggling act as regulatory frameworks and policies need to find the balance between providing the necessary support that will bring citizens into the formal financial fold while simultaneously ensuring that these requirements do not discourage access to critical financial services by stifling individuals’ abilities to transact.
What is clear is that it is simply impossible to make tangible progress by working in isolation. It takes collaboration between players in both the public and private sectors to bring their specific area of expertise to the table with the view to develop holistic strategies and policies that will enable inclusion.
The good news is that industry stakeholders across the board have largely realised this and joined forces through organisations like the Alliance for Financial Inclusion (AFI) to share knowledge and engage to formulate and implement these policies. AFI is led by its members, comprising mainly financial regulatory institutions such as Central Banks, superintendence’s and Ministries of Finance from developing countries. The network currently includes members from 94 countries working together to accelerate the adoption of proven and innovative financial inclusion policy solutions with the ultimate aim of making financial services more accessible to the world’s unbanked. Mastercard is a proud member of AFI and continues to collaborate to ensure open dialogue with focus on building a strong network where solutions can be found.
What has made these platforms so impactful is that the regulators and policy makers understand the unique African context and have been formulating policy solutions that speak to this. Advancing financial inclusion through digital financial services, for example, has been a top priority and continues to dominate the agenda because of the role that mobile money, new tech and innovation are playing in allowing Africans to pay for goods and services safely and easily.
Although mobile money is a global disruptor, its impact has been especially noticeable in Africa, where mobile penetration continues to grow and where it has already proven to be a game changer in terms of providing affordable financial services.
Using a tool that people already hold in their hands means that more people can be connected to an interoperable financial ecosystem at a fraction of the cost – backing this up is the fact that there are nearly 280 million registered mobile money accounts in Sub-Saharan Africa, compared to 178 million bank accounts.
As such, driving policy that supports mobile-based payments as a critical enabler will remain a core focus going forward. But even with mobile and digital finance recognised as an answer of sorts to facilitating financial inclusion, that is only half the battle. There needs to be continuous innovation and advancement in this space to ensure that all Africans have the opportunity to be financially included – and the answer lies in collaboration across the public and private sectors to leverage each other’s strengths.
The Securities and Exchange Commission (SEC) has revised the minimum capital applicable to all categories of regulated capital market entities after 10 years.
The minimum capital review, according to the SEC, is informed by the need to strengthen market resilience, enhance investor protection, align capital adequacy with the evolving risk profile of market activities, and ensure that regulated entities possess sufficient financial capacity to discharge their obligations in a sustainable manner.
“The revised Minimum Capital framework seeks to: enhance the financial soundness and operational resilience of market operators; align capital requirements with the scope, complexity, and risk exposure of regulated activities; promote market stability and systemic risk mitigation; and support innovation and orderly development of new market segments, including digital assets and commodities markets,” SEC said in a January 16 circular to market operators.
The SEC circular was sent to all entities regulated by the Commission, including but not limited to core and non-core capital market operators; market infrastructure institutions; capital market consultants; financial technology (FinTech) operators; Virtual Asset Service Providers (VASPs); and Commodity market intermediaries.
All affected entities are required to comply with the revised Minimum Capital Requirements on or before June 30, 2027, the circular said.
“Entities that fail to meet the prescribed requirements within the stipulated timeline shall be subject to appropriate regulatory sanctions, including suspension or withdrawal of registration, as may be determined by the Commission,” SEC said.
Tier-1 Portfolio Managers (Full Scope) involved in the management of Collective Investment Schemes (CIS) and Alternative Investment Funds (Private Equity, Venture Capital, Infrastructure Funds etc) above N20 billion Net Asset Value (NAV), or discretionary and Non-Discretionary Private Portfolio Management Services above N20 billion Assets under Management (AuM), or exposure to foreign instruments up to 40 percent of the NAV are now required to have a minimum capital of N5 billion as against N150 million.
“Any Fund and Portfolio Manager with NAV/AuM of more than N100billion should have a minimum of 10 percent of the NAV/AuM as capital,” SEC added.
For the Tier-2 fund/portfolio managers (Limited Scope) who are in the business of management of Collective Investment Schemes with limited pooled fund creation of not more than 10 times the required capital (N20 billion) on Net Asset Value (NAV), or discretionary and non-discretionary private portfolio management services of not more than N20 billion, or those exposure to foreign instruments of not more than 20 percent of the NAV, now require N2 billion as minimum capital as against low of N150 million.
Likewise, broker-dealers whose services include: client execution, proprietary trading, margin/securities lending and advisory services no longer require N300 million minimum capital to operate but N2 billion.
The SEC said the minimum capital review from 2015 low is in line with its mandate under the Investments and Securities Act 2025 to regulate and develop the Nigerian capital market.
Also, Tier 1 issuing houses who do non-interest finance services, advisory & arrangement services but no underwriting now require N2 billion as against N200 million; while Tier 2 –issuing houses with underwriting and offers a ‘one-stop-shop’ for issuers, provides underwriting services, and renders advisory and product development services require N7 billion minimum capital for this business as against N200 million.
Also, the minimum capital requirement for brokers (client execution only) has been jacked up from N200 million to N600 million, while that of dealers (proprietary trading only) has been moved from N100 million to N1 billion.
Broker-Dealers’ (client execution, proprietary trading, margin/securities lending and advisory services) has been raised from N300 million to N2 billion, while Sub-Brokers’ (Digital) from N10million to N100million; Sub-Broker (Corporate) has been increased from N10million to N50 million. Also, sub-brokers’ (Individual) now need N10 million minimum capital for the business as against N2 million while inter-dealer brokers require N2 billion as against N50 million.
Securities and Exchange Commission (SEC) and the Nigeria Police Force have forged an alliance against illegal scheme operators, investment frauds, and cryptocurrency frauds in a bid to protect the hard-earned savings and the financial dreams of the Nigerian people.
Dr Emomotimi Agama, director-general of the SEC, stated this during a meeting with Kayode Egbetokun, Inspector General of Police, held in Abuja.
Agama said the SEC, as the sentinel at the gate of Nigeria’s formal capital markets, had the mandate to protect investors, maintain fair, efficient, and transparent markets, and promote the growth of a vibrant economy built on trust, which is done by setting rules, licensing operators and market surveillance.
He, however, stated that the Commission faced adversaries who operate in the shadows, outside regulated gates by exploiting the trust of people and promising miraculous returns such as 200 per cent in 30 days.
“Currently, there is a gap, a seam between identification and enforcement that these scammers exploit. Today, we aim to close that gap permanently. Therefore, we propose a robust, institutionalised collaboration with the following pillars: Joint Intelligence and Operations Task Force: Capacity Building and Knowledge Transfer; Streamlined Processes for Enforcement and National Public Awareness Campaign,” he stated.
The SEC DG advocated, “the establishment of a dedicated SEC-NPF team that combines market intelligence, forensic accounting, and understanding of complex financial schemes with investigative and intelligence-gathering capabilities. This team will be the rapid-response unit to new frauds.”
Agama also sought the permission of the IGP to go into a Memorandum of Understanding with the Cyber Security Unit of the Police Force in a bid to ensure that cyberspace is safe for all Nigerians
In his response, the IGP Kayode Egbetokun assured the SEC team that the Nigerian police Force is ready to collaborate with the Commission, strengthen partnership in all the ways possible, and ensure that the Commission achieves its aims.
He said, “Your role in the Securities and Exchange Commission is very crucial to the Nigerian Economy, and with our supervision and support from the government, we will ensure economic recovery and growth. If the police unit in SEC is strengthened, it is going to make such an impact on your enforcement drive. What you said speaks so much to your determination to ensure effective drive in the Capital market, and when we can achieve effective enforcement, it comes with so many benefits.
Egbetokun also congratulated the Commission on the recent achievement of the N100 trillion market capitalisation mark, adding that it will aid economic growth and development.
Nigerian fintech giant, Paystack has taken its boldest step yet beyond payments, acquiring Ladder Microfinance Bank. The fintech giant has quickly rebranded its new acquisition as Paystack Microfinance Bank (MFB) in a strategic shift that could reshape how African businesses access credit, deposits, and embedded financial services.
After nearly a decade building the backbone of online payments in Nigeria, the deal gives Paystack regulatory cover to hold deposits, lend directly to businesses and offer banking-as-a-service products.
More importantly, Paystack’s chief operating officer, Amandine Lobelle, highlighted that it allows the company to exert greater control over the trillions of naira that already flow through its platform every month, turning transaction data into a powerful engine for credit and treasury products.
“After 10 years of building payment infrastructure and going deep, we realised that businesses needed more than just getting paid to grow. We wanted to leverage the expertise that we have built over the last decade to continue to address some of the pain points that businesses have,” said Lobelle.
Paystack MFB will operate as a sister company to its payments business, initially focusing on working capital loans, merchant cash advances, overdrafts and term loans for small and medium-sized enterprises.
By using real-time payment data to underwrite loans, Paystack believes it can offer faster approvals and more accurate risk pricing than traditional lenders, directly tackling Nigeria’s estimated $32 billion small business financing gap.
For Paystack, founded in 2016 and acquired by Stripe in 2020, the move marks a strategic evolution from being just a payments processor to becoming a core part of the financial operating system for African businesses.
Today, Paystack supports more than 300,000 businesses across Nigeria, Ghana, and South Africa and has become one of Africa’s most trusted fintech infrastructure providers.
The banking licence is a game-changer as payments, once Paystack’s main growth engine, are increasingly commoditised across Africa. Lending, deposits and treasury services offer deeper margins, stickier relationships and long-term sustainability.
By layering banking services on top of payments, Paystack is betting that infrastructure depth will outperform flashy consumer scale.
However, the move also throws the Nigerian-born fintech giant into fierce competition with digital -first lenders and neobanks such as Moniepoint, Kuda, OPay and PalmPay, which already operate at massive scale. Still, Paystack’s strength lies in its merchant-first focus and developer-friendly APIs.
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