CBN says Nigeria’s fintech sector is exposed to global shocks due to foreign funding reliance, urges domestic capital and regulatory reforms

Nigeria’s fast-growing fintech sector remains heavily dependent on foreign investment, exposing it to global market swings, the Central Bank of Nigeria has said in its 2025 Fintech Policy Insight Report.

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According to the report, Nigerian startups raised $520m in equity funding in 2024, down from about $747m in 2019, when the country accounted for roughly 37 per cent of all African startup investment.

While noting that the sector has shown resilience amid global economic pressures, the apex bank warned that reliance on external capital leaves fintech firms vulnerable to international market fluctuations, especially during periods of monetary tightening in advanced economies.

“The sharp rise in interest rates in advanced economies during 2022 contributed to a slowdown in venture capital funding.

These dynamics highlight the importance of developing domestic funding avenues, such as leveraging Nigeria’s capital markets, to reduce currency risk and sustain fintech growth,” the report stated.

CBN Governor Olayemi Cardoso said Nigeria is undergoing a rapid financial evolution, with the fintech landscape expanding from a handful of startups into one of Africa’s most vibrant innovation ecosystems over the past decade.

“Even amid global economic headwinds, Nigerian fintech firms continued to attract investment and drive change.

Today, with improved stability of our currency and domestic economy, it is clearer than ever that financial innovation can advance inclusion at scale,” he said.

The report also highlighted Nigeria’s leadership in digital financial infrastructure. It noted that more than 25 per cent of electronic transactions in the country are processed through real-time payment channels, with nearly 11 billion transactions recorded in 2024, up from five billion in 2022.

It described the NIBSS Instant Payment (NIP) platform as one of the most mature and widely adopted instant payment systems globally.

Beyond funding concerns, the central bank stressed the need to strengthen system integrity through compliance reforms, anti-money laundering supervision and consumer protection measures to sustain investor confidence.

Stakeholders surveyed in the report identified regulatory compliance costs as a major barrier to innovation.

About 87.5 per cent of respondents said the cost of meeting regulatory and risk requirements significantly affects their ability to innovate, while delays in product approvals and regulatory timelines were also cited as bottlenecks.

The report further revealed that 62.5 per cent of fintech firms plan to expand into other African markets, with strong support for regulatory passporting frameworks to ease compliant cross-border operations.

However, the CBN cautioned that such expansion requires a stable domestic funding base and coordinated regulatory frameworks across jurisdictions.

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By focusing on domestic funding, regulatory modernisation and innovation infrastructure, the apex bank said Nigeria aims to position itself not only as a fintech leader but also as a regulatory model for other emerging economies.