The Director General of the Nigeria Securities and Exchange Commission (SEC), Emomotimi Agama, has called for “smart regulation” to balance the rapid growth of fintech with the need for investor protection and market integrity in Africa.
Speaking at the Nigeria Fintech Week 2024, themed “Positioning Africa’s Fintech Ecosystem to Accelerate Inclusive Growth,” Agama emphasized the potential of fintech to transform Africa’s financial landscape while warning of significant regulatory risks.
Agama highlighted the growing concerns around the misuse of investment data, vulnerability to cyber-attacks, and the rise of unregulated fintech firms raising public funds without proper oversight.
These practices, he noted, expose investors to fraud, undermining the SEC’s mandate to protect them.
The need for a regulatory framework
Emphasizing the need for regulatory frameworks that ensure fintech innovations are secure, sustainable, and beneficial, Agama described smart regulation as a flexible yet rigorous approach that promotes innovation while ensuring that companies meet required security, consumer protection, and market integrity standards.
- Agama revealed that the SEC has introduced a Regulatory Innovation Program designed to allow fintech firms to test their business models in a controlled environment before launching full-scale operations.
- This initiative, along with an Accelerated Regulatory Innovation Program, is aimed at establishing Nigeria as a fintech capital in Africa and globally.
“These programs are essential to protect fintech entrepreneurs and create a stable, inclusive environment where innovation can flourish.
“The initiatives have already yielded tangible results, with several fintech firms receiving approvals, and others in the pipeline undergoing thorough assessment.
“Trust is the cornerstone of any financial system. Smart regulation builds trust by ensuring that fintech companies operate transparently, protecting both investors and consumers,” he said
Fintech’s role in driving inclusive growth
Agama urged fintech innovators to continue developing solutions that address Africa’s unique challenges, particularly in financial inclusion, wealth creation, and economic growth.
- He also called on governments to promote fintech through initiatives like digital infrastructure development, public-private partnerships, and programs to build digital skills.
- Nigeria, he noted, is well-positioned to support global fintech innovation by providing an enabling environment and harmonized regulatory frameworks that reduce barriers to entry and facilitate cross-border collaborations.
- Agama stressed the need for collaboration among fintech innovators, investors, financial institutions, academia, and civil society.
- He encouraged these groups to work together to build digital literacy and financial education, ensuring that the benefits of fintech are widely understood and accessible to all.
Opportunities in fintech
Speaking earlier, the President of the FintechNGR, Mr. Ade Bajomo, said the fintech industry still has huge opportunities for growth as millions of people across Nigeria and Africa still lack access to financial services.
“There are 40 million Nigerians and 350 million Africans still financially excluded. This offers opportunities for our ecosystem to exploit to achieve inclusive growth,
“Though we are facing a period of investment drought and cost of living challenges, we must stay focused on our goals, for leveraging fintech as a tool for socio-economic development and exploiting every opportunity that innovation, technology, and leadership can deliver to improve our governance, processes, and scale,” Bajomo said.
- He, however, noted that with great opportunity comes great responsibility. He said fintechs in Africa currently face challenges of inadequate infrastructure, such as limited internet connectivity, unreliable power supply, and shortage of talent.
- Bajomo said the Nigeria fintech association would continue to play its part in connecting, accelerating the growth of, and advocating for fintechs.
- He added that the group would also continue to deepen relationships with regulators to co-develop policies and address issues that impact the fintech ecosystem proactively.
What you should know: The Nigeria Fintech Week is an annual event that gathers stakeholders from various sectors, including technology firms, financial institutions, regulators, investors, and industry experts.
It provides a platform for the stakeholders to critically assess the current state of fintech in Africa and chart a forward-thinking path for the future.