The Central Bank of Nigeria (CBN) has raised concerns over the heavy reliance of Nigeria’s fast-growing fintech sector on foreign capital, warning that such dependence exposes the industry to global financial shocks.
In its 2025 Fintech Policy Insight Report, the apex bank noted that although the sector has expanded rapidly over the past decade, limited domestic funding options leave it vulnerable to external economic pressures. Nigerian fintech startups attracted approximately $520 million in equity funding in 2024, down from about $747 million in 2019, when Nigeria accounted for nearly 37 percent of Africa’s total startup investment.
The CBN observed that tightening global financial conditions, including the sharp rise in interest rates in advanced economies in 2022, contributed to a slowdown in venture capital inflows. It stressed that the trend underscores the urgent need to deepen local funding channels, including more effective use of Nigeria’s capital markets, to reduce currency risks and ensure sustainable growth.
CBN Governor Olayemi Cardoso described the country’s fintech evolution as a major financial transformation, positioning Nigeria as one of Africa’s most vibrant innovation hubs. He noted that despite global macroeconomic headwinds, fintech firms have continued to attract investment and drive financial inclusion.
However, the report highlighted structural challenges. About 87.5 percent of surveyed stakeholders cited high regulatory and compliance costs as a constraint on innovation, while delays in product approvals remain significant bottlenecks. Strengthening anti-money laundering supervision, consumer protection, and overall system integrity was identified as crucial to sustaining investor confidence.
The report also revealed that 62.5 percent of fintech firms plan regional expansion, though the CBN warned that cross-border growth requires stable funding and regulatory coordination. Meanwhile, Nigeria processed 11 billion electronic transactions in 2024, reinforcing its leadership in real-time payments.
