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The Managing Director of Kuda Microfinance Bank, Musty Mustapha, has said that the fragmented state of regulations in the Nigerian fintech industry is discouraging further investments and slowing down innovation.
Mustapha stated this during a visit to the Nigeria Deposit Insurance Corporation (NDIC), where he highlighted the challenges facing the industry.
According to him, fintech firms in Nigeria face an uneven regulatory playing field, operating under multiple oversight bodies, including the Central Bank of Nigeria (CBN), the Securities and Exchange Commission (SEC), and the NDIC, which creates compliance bottlenecks.
To address this, he called for harmonized policies that balance innovation with consumer protection, ensuring fintechs have equal access to critical financial infrastructure.
Fintech growth in Nigeria
Mustapha noted that Nigeria’s fintech ecosystem has recorded rapid growth in recent years, attracting billions of dollars in investments.
- He added that the industry has also been instrumental in driving financial inclusion, pushing the country’s inclusion rate to 64% in 2023, according to government data.
- He, however, warned that regulatory uncertainty, cybersecurity threats, financial exclusion, and infrastructure deficits continue to threaten this progress.
“Security risks also pose a significant challenge, with Nigeria ranking fifth globally in cybercrime,” he added.
Mustapha noted that phishing attacks, insider fraud, and financial system breaches undermine consumer trust in digital payments, limiting the sector’s ability to scale.
He urged industry players to strengthen cybersecurity frameworks, adopt multi-factor authentication, and collaborate with banks, regulators, and global cybersecurity firms to tackle evolving threats.
Talent shortage
The Kuda MD also pointed out that the industry currently faces the challenge of talent shortage.
“One of the key issues affecting the fintech industry is talent shortage, especially in areas such as blockchain, AI, and cybersecurity.
“Nigeria has one of the fastest-growing tech workforces in Africa, but the unending migration of skilled professionals abroad has slowed local fintech innovation,” he said.
- Mustapha proposed partnerships between fintech companies and universities, as well as exchange programmes with international firms, to accelerate skills development and retain top talent.
- He also noted that despite fintech’s expansion, millions of Nigerians remain financially excluded, particularly in rural areas where low smartphone penetration and poor digital literacy make digital banking adoption difficult.
- He stressed the need for more inclusive financial products, leveraging USSD and offline payment solutions to serve cash-dependent populations.
What you should know
Mustapha’s remarks echoed the sentiment of the President of the Nigerian Fintech Association (FintechNGR), Dr. Stanly Jacob, who in a recent media interview highlighted regulatory uncertainties as one of the challenges of the Nigerian fintech industry.
According to him, the regulatory issues and the volatility of the Nigerian currency would define the industry this year.
He, however, noted that the resilience of the fintech players would continue to drive the industry amid the challenges.
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