The Senate Committee on Banking, Insurance and Other Financial Institutions has urged the Central Bank of Nigeria (CBN) to strengthen its oversight of the fintech sector to curb rising cases of financial fraud within Nigeria’s banking system.
The committee also urged the bank to develop stricter regulatory measures to address the increasing threat of Ponzi schemes, which have defrauded numerous Nigerians in recent years.
The Chairman of the Committee, Adetokunbo Abiru, made the call on Wednesday during an investigative hearing into the operations of Ponzi schemes in Nigeria, with particular reference to the recent Crypto Bullion Exchange (CBEX) incident.
The hearing was jointly organised by the Senate Committees on ICT and Cyber Security, Capital Market, and Anti-Corruption and Financial Crimes.
Mr Abiru, who represents Lagos East Senatorial District, advocated for legislation that would explicitly place fintech operations under the supervision of the CBN.
He noted that the Banks and Other Financial Institutions Act (BOFIA) 2020, which regulates Nigeria’s banking system, should be amended to accommodate technology-enabled financial service providers.
“It is far more effective to strengthen the BOFIA framework, modernise CBN supervisory powers, and mandate robust coordination with agencies such as 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,” he said.
The proposed amendment, according to Mr Abiru, would empower the CBN to designate qualifying fintech and digital financial institutions as important institutions, establish a national registry to enhance transparency and beneficial ownership disclosure, strengthen risk-based supervision tailored to technology-driven financial services, and promote data sovereignty and systemic stability.
He added that although there have been suggestions to create a new standalone regulatory agency for fintech supervision, such a move would likely duplicate existing functions, create bureaucratic overlap, increase administrative costs, and fragment regulatory authority in a sector where coordination and coherence are critical.
“The question has arisen as to whether the creation of a new standalone regulatory agency would be a preferable pathway for supervising fintechs. However, after careful consideration, it is evident that establishing an entirely new agency would duplicate functions, create bureaucratic overlap, increase administrative costs, and fragment regulatory authority in a sector where coordination and coherence are essential.”
Fintech operations in Nigeria
Nigeria’s fintech sector has witnessed rapid growth over the past decade, driven by increased mobile phone penetration, digital payment adoption, and financial inclusion initiatives championed by the CBN.
The country is widely regarded as one of Africa’s leading fintech hubs, attracting billions of naira in investments and hosting numerous digital payment, lending, and investment platforms.
However, this rapid expansion has also exposed regulatory gaps, particularly as some digital platforms operate in grey areas between traditional banking, capital markets, and telecommunications regulation.
While the CBN regulates banks under the Banks and Other Financial Institutions Act (BOFIA) 2020, fintech companies often fall under multiple regulatory frameworks, creating coordination challenges among agencies.
In recent years, Nigeria has witnessed a surge in Ponzi schemes and unregulated digital investment platforms that promise unrealistic returns to unsuspecting investors. Many of these schemes leverage social media, cryptocurrency narratives, and digital payment channels to attract victims. The collapse of platforms such as the recent Crypto Bullion Exchange (CBEX) has renewed concerns about consumer protection, weak oversight, and inter-agency coordination.
Past experiences, including the MMM pyramid scheme that gained traction in 2016, show the scale of financial losses Nigerians can suffer when fraudulent schemes proliferate without timely regulatory intervention.
Despite repeated warnings from authorities such as the Securities and Exchange Commission (SEC) and the CBN, enforcement has often lagged behind the speed at which such platforms emerge.