The Senate Committee on Banking, Insurance and Other Financial Institutions has called upon the Central Bank of Nigeria (CBN) to enhance its supervisory framework over the fintech sector. This appeal follows an investigative hearing into the rise of fraudulent financial activities and the proliferation of Ponzi schemes across the country.
The joint hearing, organized alongside the Senate Committees on ICT and Cyber Security, Capital Market, and Anti-Corruption and Financial Crimes, focused on addressing regulatory gaps exposed by recent incidents, including the Crypto Bullion Exchange (CBEX) collapse.
Committee Chairman Senator Adetokunbo Abiru, representing Lagos East Senatorial District, advocated for legislative updates to the Banks and Other Financial Institutions Act (BOFIA) 2020. Senator Abiru emphasized that rather than creating a new standalone agency which could lead to bureaucratic overlap and increased costs the existing BOFIA framework should be modernized to encompass technology enabled financial service providers.
Key objectives of the proposed legislative amendments include:
Modernizing Supervisory Powers: Empowering the CBN to designate qualifying fintechs as “important institutions”.
Enhancing Transparency: Establishing a national registry to improve beneficial ownership disclosure.
Risk-Based Supervision: Tailoring oversight specifically to the unique challenges of technology-driven finance.
Inter-Agency Coordination: Mandating robust cooperation between the CBN and bodies such as the SEC, NCC, NITDA, and the Office of the National Security Adviser.
Nigeria has established itself as a premier fintech hub in Africa, driven by digital payment adoption and financial inclusion. However, this rapid growth has been accompanied by a surge in unregulated digital investment platforms and Ponzi schemes that leverage social media and cryptocurrency narratives to defraud unsuspecting citizens.
Senator Abiru noted that while the CBN regulates traditional banks, many fintechs currently operate in “grey areas” between banking, telecommunications, and capital markets. The Committee’s recommendation seeks to close these gaps to prevent a repeat of large scale financial losses similar to those seen in the 2016 MMM pyramid scheme.
“It is far more effective to strengthen the BOFIA framework and promote data sovereignty and systemic stability than to fragment regulatory authority in a sector where coordination and coherence are essential,” Senator Abiru stated.
The Senate Committee remains committed to ensuring that regulation keeps pace with innovation to protect Nigerian consumers and maintain the integrity of the national financial system.
