By Kingsley I. Ilechukwu, Bureau Chief, South West

Telecommunications regulatory authority, the Nigerian Communications Commission (NCC) under the exercise of its statutory mandate, will continue to ensure that the regulatory environment supports the growth and success of Fintech in Nigeria for the overall development of the digital economy.

The Executive Vice Chairman and Chief Executive Officer(EVC/CEO) of NCC, Dr. Aminu Maida gave this assurance while a delivering  his keynote address at the Nigeria Information Technology Reporters Association(NITRA)  Fintech Forum, held at the Citiheight Luxury Hotel, Ikeja, Lagos, south west, Nigeria, on Thursday, October 26, 2023.

Represented by the NCC Zonal Controller, Lagos, Henry Ojiokpota, Dr. Maina said the theme of the event was topical  in the financial industry considering the significant rise in Digital Financial Services.  Such progress, according to him  was inextricably related to several initiatives and collaborations between stakeholders from relevant industries.

“Fintech is gradually revolutionizing Nigeria’s financial ecosystem as it poses a great disruption to the conventional financial system. As an emerging industry that leverages on technology to support several financial services such as mobile banking, borrowing, investment, cryptocurrency among others, Fintech comes with a lot of business opportunities in terms of innovation, job creation and investment. Therefore, Fintech has the potential to deepen the existing payment and financial system infrastructure to reach unserved and underserved areas and further stimulate economic growth, “ he said.

As per the NCC EVC/CEO, Fintech applications such as robo-advisors, payment apps, peer-to-peer (P2P) lending apps, investment apps, and crypto apps, among others, created business opportunities for individuals. With the youth population accounting for an estimated  70per cent of Nigeria’s population, Maina said, the digitally savvy, young, and middle-aged individuals adopting these Fintech applications for socioeconomic gains would add value to the economy.

Providing insight into factors driving growth in the Fintech ecosystem, Maina cited a  recent industry statistics  from the NCC showing that active subscriptions across mobile networks in Nigeria rose to 220.7 million in August 2023.

Said he: “Similarly, the increasing rate of smartphone penetration, internet access, and focused regulatory drive have continued to create a favourable atmosphere for Fintech to thrive. Furthermore, greater accessibility to customer, convenience, and low-cost access to short-term loans will further deepen the acceptability of Fintech products and services. Records have shown that the Fintech sector has benefitted a lot from external investment, amounting to over US$I billion investment since 2018.

“The National Financial Inclusion Steering Committee, which is a committee of stakeholders from the public and private sector,  has been at the forefront of promoting inclusive growth and development through financial inclusion. The Committee recognizes the place of innovative business models in achieving financial inclusion objectives and facilitating inclusive growth in the Nigerian economy. It is in light of this that the Committee developed the National Financial Inclusion Strategy policy document to fast track the growth and development of a Nigerian Fintech ecosystem that can favourably compete globally. This strategy provides the roadmap for unbundling several untapped potentials and benefits in the Fintech ecosystem.

“Through the Financial Inclusion Channels Working Group and other working groups of the committee, giant strides are being made to address issues that have militated against the growth of Fintech in Nigeria. This is to harness and retain the talent pool in the Fintech space and the goal of mainstreaming it into the main Financial Service sector. The International Monetary Fund (IMF) report ‘Nigeria: Fostering Financial Inclusion through Digital Financial Services of March 2023 ” confirms that financial inclusion in Nigeria recorded a lot of progress recently. As at the end of 2022, the Central Bank of Nigeria had granted 5 Payment Service Bank licenses in Nigeria to Hope PSB, 9PSB, MTN’s Momo PSB, Aiftel’s Smart Cash PSB and Globacom’s money master, which have contributed to the development of the Fintech in Nigeria.

“The Nigerian Fintech ecosystem offers a full array of financial services, which has prompted consumer protection concerns over predatory pricing and regulatory challenges in the sector. Similarly, telecommunications infrastructure, which is an enabler for Fintech services, remains an issue of concern. Statistics indicate that Broadband penetration stood at 45.57 per cent as of August 2023, which is a fair progression towards the mid-term broadband target to be met in 2023. The Commission has begun implementing new strategies to meet the new target of 70 per cent Broadband penetration by year 2025 as contained in the Nigerian National Broadband Plan 2020 — 2025 which will equally explore the potentials in the Fintech sector.

“Digital financial services will continue to have a significant impact on Nigeria’s financial inclusion

and the digital economy at large. This is because of the optimal utilization of digital technologies in the provision of financial services to rural communities and underserved segments of the population by leveraging on high mobile phone penetration in Nigeria. In a nutshell, such measures extend financial services coverage and create avenues for affordable solutions. Therefore, coming up with new digital financial business models and initiatives as well as huge investment in digital infrastructure and e-commerce that will open the market and further stimulate development in the Fintech sector.

“The Nigerian Communications Commission, as the apex regulatory agency of the communications industry, will continue to support the Fintech sector in harnessing its enormous potentials as well as overcoming the challenges identified. This can be achieved through adequate provision of secure infrastructure and USSD channels that enable delivery of Digital Financial Services delivery in efficient ways. The NCC is also keen on maintaining minimum standards Quality of Service (QoS), for an uninterrupted network that will boost the sector. In support of this objective, the Commission has executed the Memorandum of Understanding with CBN on driving payment systems and financial inclusion, which is in line with the Nigeria Payments System Vision 2025.

“Furthermore, the Commission is playing an important role in harnessing the potentials of Fintech through maximum support for Fintech policies, enforcing regulations, and strengthening collaborations with relevant authorities such as the CBN and other stakeholders. Beyond this, the NCC is also promoting  incubation and sound practices of Fintech firms and highly secured platforms to further enhance the development of the Fintech ecosystem as well as the digital economy space in general. These measures would ultimately enable the attainment of the objectives of the Nigerian Startup Bill, particularly in the Financial Services sector, and maximize the benefits of Fintech while mitigating the risks involved.

“In conclusion, the Commission, within its statutory mandate, will continue to ensure that the regulatory environment supports the growth and success of Fintech in Nigeria for the overall development of our digital economy.”

The Forum was attended by Digital Economy stakeholders from the policy, regulatory and  advocacy constituencies including but not limited NCC, NiRA, Accelerex, Moniepoint and NITRA.