E-Financial
SEC Cautions Fintechs of Rising Risks as Digital Finance Expands
The Securities and Exchange Commission Nigeria (SEC) has cautioned fintech operators that while technology can expand access to investment opportunities, it also has the potential to magnify risks if not properly managed.
While speaking at the first biannual SEC Regulator–FinTech Clinic, Rabi Maidawa, fund authorisation officer at the commission, said technology-driven platforms do not eliminate risk in investment but can amplify it when systems are poorly designed.
“Technology does not eliminate risk in investment; it amplifies it. A single design flaw on a platform, such as a data integrity issue, can spread quickly across the investor ecosystem,” Maidawa said.
Regulators and industry stakeholders at the forum stressed the need for stronger compliance frameworks as digital finance continues to evolve across Nigeria’s financial ecosystem.
Muhammad Jiya, chief operating officer for emerging technologies and innovation at the Nigerian Financial Intelligence Unit (NFIU), noted that digital assets and technology-driven financial services are creating new channels for financial crime.
According to him, operators must ensure that compliance programmes are embedded within their platforms from the early stages of development.
“Digital assets and technology-driven financial services also present new actors for financial crime. As operators, compliance programmes should be embedded into your systems,” Jiya said.
Industry experts also advised fintech founders to engage regulators early when developing new products.
Nelson Ikeagu, a regulatory expert, said pre-launch engagement with regulators is essential for innovators whose products may not clearly fall within existing regulatory frameworks.
“Pre-launch dialogue is important for operators because it helps provide guidance on what regulators expect,” he said.
He added that startups developing innovative products that do not fit neatly into existing regulations, such as those overseen by the Nigerian Communications Commission (NCC) should consider applying for regulatory sandbox programmes to obtain guidance while testing their solutions.
“Operators that adopt higher compliance standards are better positioned to navigate the regulatory environment,” Ikeagu noted.
Ismaila Muhammad, an IT professional who spoke at the event, also advised fintech founders to treat their platforms as regulated entities and ensure they do not become conduits for illicit financial activity.
“You are still an entity even if you are a tech company. Ensure that money launderers do not infiltrate your business. Proper registration with the SEC and adherence to regulatory requirements are essential,” he said.
While delivering remarks on the commission’s regulatory approach to fintech, Jameelah Sheriff-Ayedun said the SEC was among the first Nigerian regulators to formally institutionalise collaboration with fintech companies.
According to her, the commission introduced a regulatory incubation programme to provide innovation-friendly supervision while maintaining market integrity.
“The regulatory incubation programme provides innovation-friendly supervision. The SEC has also played an active leadership role in the regulators’ forum,” she said.
She noted that between 2020 and 2022, the commission moved early to support emerging fintech models, including crowdfunding, robo-advisory services, tokenisation, and digital assets.
However, Sheriff-Ayedun acknowledged that several structural challenges remain in Nigeria’s fintech regulatory environment. These include complex multi-regulator oversight, overlapping mandates among agencies, and prolonged licensing timelines.
She also pointed to operational clarity gaps in areas such as digital assets and decentralised finance (DeFi).
Beyond regulation, she said the industry still faces significant market and capacity gaps, including shortages of skilled talent in compliance, cybersecurity, and artificial intelligence, as well as limited investor education and barriers to broader retail capital participation.
Other challenges include the limited depth of early-stage capital available to support fintech innovation in the country.
Debt Management Office (DMO) said the federal government spent N3.14 trillion on servicing its domestic debt in the first quarter of 2026.
The office disclosed the data in its latest domestic debt service report for Q1 2026.
The figure comprises N2.97 trillion in interest payments and N169.68 billion in principal repayments.
The agency said in January, the government spent N741.82 billion on domestic debt service, while the figure rose to N967.67 billion in February.
Debt service increased further to N1.43 trillion in March, bringing the total for the quarter to N3.14 trillion.
The March figure was 47.7 percent higher than the N967.67 billion recorded in February and 92.7 percent above the N741.82 billion spent in January.
Also, the debt office said interest payments accounted for about 94.6 percent of total domestic debt service during the quarter.
The DMO said treasury bills accounted for the largest share of interest payments at N1 trillion, while interest on federal government bonds stood at N1.96 trillion.
The agency said the government also paid N4.24 billion in interest on FGN savings bonds during the period.
The DMO said the principal component of the debt service comprised N169.68 billion in repayments on local-denominated promissory notes.
Overall, the government’s domestic debt service rose sharply through the quarter, with March accounting for almost half of the N3.14 trillion spent between January and March.
Nigeria’s public debt increased by 0.01 percent to N159.35 trillion in the Q1 of 2026.
Interswitch Group, an integrated digital payments and commerce company, together with global banking software provider, Temenos have reassured the Central Bank of Nigeria (CBN) of their commitment to advancing the modernisation of Nigeria’s financial services sector.
Interswitch and Temenos had earlier in June announced a strategic partnership across Africa which would see Interswitch leverage Temenos solutions – across core banking, digital banking, payments, wealth management and financial crime mitigation – to provide cloud-hosted and on-premises managed services to banks and financial institutions across Africa.
This will enable institutions to progressively transform their banking platform and evolve to more customer-centric business models. The service will initially support key African markets including Nigeria, Ghana, Côte d’Ivoire, Kenya and others.
The recent regulatory visit to CBN headquarters in Abuja, was led by the Founder and Group Chief Executive Officer of Interswitch, Mitchell Elegbe, and Managing Director for the Middle East and Africa (MEA) at Temenos, Santhosh Rao, as part of the ongoing efforts by both organisations to deepen collaboration with Central Banks across the African region on the future of digital banking infrastructure across Nigeria and key African markets.
Discussions centred on the strategic partnership between Interswitch and Temenos, and how it will enable Nigerian financial institutions to progressively modernise their core banking platforms and transition to more customer-centric business models.
The two organisations also explored opportunities to work with the CBN in charting new frontiers in Central Bank Digital Currency (CBDC) innovation, leveraging resilient financial networks and decentralised application platforms to support the issuance and management of CBDCs.
Commenting on the visit, Elegbesaid: “Our partnership as Interswitch with Temenos and our continued engagement with the Central Bank of Nigeria reflect a shared commitment to building banking infrastructure that is resilient, inclusive, and ready for the next phase of Africa’s financial evolution.
We are proud to be at the table as these conversations shape the future of digital banking technology and innovation across key Africa markets…”
The Bank of Industry, through BOI Financing SPV Plc, has opened subscriptions for its inaugural Series 1 Fixed Rate Bond worth up to N250bn under its $1bn multi-currency instruments programme, seeking to raise long-term capital to finance businesses across Nigeria’s priority sectors.
The offer, which opened on 5 August and closes on 11 August, is being arranged by Chapel Hill Denham as the lead issuing house. The five-year bond is priced within a yield range of 17.35 per cent to 17.50 per cent and will be listed on the FMDQ Securities Exchange.
According to the offer document, proceeds from the issuance will be deployed to finance eligible businesses and projects across sectors, including agriculture and food processing, healthcare, engineering and technology, renewable energy, petrochemicals, oil and gas, creative industries and solid minerals, in line with BOI’s development finance mandate.
The lender said the financing is expected to improve access to medium and long-term funding for Nigerian enterprises, expand productive capacity, create and preserve jobs, deepen local value addition, support import substitution, boost exports and strengthen domestic value chains.
BOI, Nigeria’s foremost development finance institution, said it has provided funding to more than one million businesses across the country and disbursed over N1.27tn between 2023 and 2025. The institution operates across 34 states and the Federal Capital Territory and is jointly owned by the Ministry of Finance Incorporated and the Central Bank of Nigeria.
The bank also highlighted its financial performance, reporting a 36 per cent compound annual growth rate in gross earnings between 2021 and 2025.
Interest income rose 64 per cent to N884bn in 2025 from N538bn in the previous year, while its capital adequacy ratio stood at 39 per cent, nearly four times the regulatory minimum of 10 per cent. Its non-performing loan ratio was 1.7 per cent, below the CBN’s prudential limit of five per cent.
The bond has been assigned AAA ratings by Agusto & Co. and Intelligence Africa, reflecting the issuer’s strong capitalization, profitability, liquidity and ownership structure.
The issuance is open to institutional and qualified investors with a minimum subscription of N5m and additional investments in multiples of N1m. Interest will be paid semi-annually at a fixed rate, while principal repayment will begin in the third year through equal semi-annual amortised instalments until maturity in 2031.
The bond is also exempt from tax, making it an attractive investment option for investors seeking stable returns amid expectations of declining interest rates.
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