The Senate Committee on Banking, Insurance and Other Financial Institutions has called on the Central Bank of Nigeria (CBN) to tighten regulatory supervision of financial technology firms, citing growing incidents of fraud and the proliferation of Ponzi schemes within Nigeria’s financial system.
The committee made the recommendation during an investigative hearing on Wednesday into the operations of Ponzi schemes, with particular focus on the recent collapse of Crypto Bullion Exchange (CBEX).
Chairman of the committee, Adetokunbo Abiru, who represents Lagos East Senatorial District, advocated legislative reforms to explicitly bring fintech operators under the CBN’s regulatory purview.
The hearing was jointly organised with the Senate Committees on ICT and Cyber Security, Capital Market, and Anti-Corruption and Financial Crimes.
BOFIA Amendment Proposed
Mr Abiru urged lawmakers to amend the Banks and Other Financial Institutions Act (BOFIA) 2020 to accommodate technology-driven financial service providers, arguing that strengthening existing legal frameworks would be more effective than creating a new regulator.
“It is far more effective to strengthen the BOFIA framework, modernise CBN supervisory powers, and mandate robust coordination with relevant agencies,” he said, listing the Securities and Exchange Commission, Nigerian Communications Commission, National Information Technology Development Agency, Corporate Affairs Commission, Federal Competition and Consumer Protection Commission, Office of the National Security Adviser, and the Federal Ministry of Finance.
According to him, the proposed amendment would empower the CBN to designate qualifying fintech and digital financial institutions as systemically important, establish a national registry to improve transparency and beneficial ownership disclosure, and adopt risk-based supervision tailored to technology-enabled financial services. It would also promote data sovereignty and systemic stability within the sector.
Mr Abiru dismissed suggestions to establish a standalone fintech regulatory agency, warning that such a move could duplicate functions, increase administrative costs, and fragment oversight in a sector where coordination is critical.
Rapid Growth, Regulatory Gaps
Nigeria’s fintech industry has expanded rapidly over the past decade, driven by rising mobile phone penetration, digital payment adoption, and financial inclusion initiatives spearheaded by the CBN. The country is widely regarded as one of Africa’s leading fintech hubs, attracting significant investment and hosting numerous digital payment, lending and investment platforms.
However, the sector’s growth has exposed regulatory grey areas, particularly as fintech firms often straddle banking, capital markets and telecommunications regulations. While the CBN supervises banks under BOFIA, fintech companies frequently fall under multiple regulatory frameworks, creating coordination challenges among agencies.
Recent years have seen a surge in Ponzi schemes and unregulated digital investment platforms promising unrealistic returns. Many leverage social media, cryptocurrency narratives and digital payment channels to lure investors.
The collapse of CBEX has reignited concerns over consumer protection and regulatory effectiveness. Earlier experiences, including the rise of MMM in 2016, underscore the scale of losses Nigerians can incur when fraudulent schemes proliferate unchecked.
Despite repeated warnings from authorities such as the Securities and Exchange Commission and the CBN, enforcement efforts have often struggled to keep pace with the rapid emergence of such platforms.
