After years of explosive, entrepreneur-led growth, the focus of the fintech sector may be shifting from adoption to institutional experimentation for global alignment, ADEYEMI ADEPETUN reports.

FOR years, Nigeria’s fintech sector was the golden child of African tech, attracting a lion’s share of venture capital. But as 2026 unfolds, the narrative is shifting from rapid scaling to a grueling fight for survival.

According to a landmark Central Bank of Nigeria (CBN) report, the industry is at a crossroads, caught between a global funding winter and a regulatory environment that many find both restrictive and enabling.
The numbers tell a sobering story, where startup funding in Nigeria plummeted by 17 per cent to $343 million in 2025. Africa: The Big Deal puts the January 2026 figure at $64 million, 37 per cent of $174 million funding that came to African startups.

As of February 2025, Nigeria was home to more than 430 fintech companies, representing a significant 70 per cent increase from 255 mapped in January 2024, Fintech News Africa. The ecosystem, which is the largest in Africa, is driven by sectors like business payments, digital lending, and consumer solutions, with over 360 companies specifically authorised as digital lenders by May 2025 Global Legal Insights.

With pressures fast mounting within and without, feelers from the sub-sector showed that operators are looking to the regulator not just for rules, but for a lifeline if CBN’s ‘Shaping the Future of Fintech in Nigeria: Innovation, Inclusion and Integrity,’ is anything to go by

The 50/50 divide

THE CBN’s nationwide survey revealed a sector split down the middle. While 50 per cent of respondents view the current regulatory environment as enabling, the other half finds it restrictive. The complaints have been consistent: agonising delays in licensing, a lack of clear guidance, and inconsistent rule application.

Adding to this friction is the rising liquidity crisis. About 37.5 per cent of fintech operators now describe raising capital within Nigeria as difficult, even very difficult. With macro headwinds scaring off foreign patient capital, the industry is crying out for a domestic solution.

The most striking finding from the report is the overwhelming consensus on intervention. A staggering 87.5 per cent of fintech executives are calling for the creation of a Fintech-Specific Growth Fund or a Credit Guarantee Scheme.
The goal, according to them, is to de-risk lending and unlock long-term capital. The report showed that operators aren’t just asking for handouts; they are proposing sophisticated market instruments, such as secondary markets.

That is developing a market for fintech debt instruments to deepen domestic capital options.
They also called for blended finance. According to them, there is a need to use development finance to attract private investment. Envisaging future exposures, operators pushed the risk-sharing models. To them, utilising institutions like the Development Bank of Nigeria (DBN) and InfraCredit to back innovation is critical.

While the industry is eager for a state-backed fund, the CBN is moving with extreme caution. The regulator has made its stance clear: it will not directly establish venture-style financing.

The memory of the Anchor Borrowers Programme (ABP) looms large. Launched in 2015 to boost agriculture, the ABP disbursed N1.1 trillion before it was discontinued. However, it became a cautionary tale of poor repayment and weak monitoring, with N629.04 billion still unrecovered as of late 2025.

The CBN is determined not to repeat this mistake. Instead of acting as a direct lender, the apex bank sees itself as an arranger. It aimed to bridge the gap by bringing together private capital and development partners without putting its own balance sheet at risk.

Possible optimism

DESPITE the funding squeeze, two major milestones in late 2025 have provided a much-needed tailwind.
First, the FATF Exit! In October 2025, Nigeria was officially removed from the Financial Action Task Force (FATF) grey list. This move is expected to drastically reduce compliance costs for cross-border transactions and repair the country’s international risk perception.

Secondly, there was institutional backing. Here, the $617.7 million Investment in Digital and Creative Enterprises (iDICE) programme is finally gaining momentum. Its participation in Ventures Platform’s $64 million fundraise in November 2025 signals that government-backed capital is ready to step into the seed-stage gap.

Dissecting the issue, Producer of Fintex Show on Nigeria Info 99.3 FM, Rarzack Olaegbe, said the 2025 CBN policy is the second time in four years that the regulator will release a sweeping regulation for the industry. He said this comes after the 2022 cashless policy that laid down the direction and regulation for the banking sector.

Olaegbe said this new policy from the CBN’s viewpoint will bring stability, sanity and integrity, stressing that this is essential as more fintech firms are metamorphosing into banks with some fintech firms acquiring microfinancebank licenses and others taking over existing microfinance banks. “I know that about five fintech firms are in this basket. Interswitch, Opay, Paystack, Palmpay and others are wearing the toga of banks.

“Remember, some of these fintech firms do not have physical offices across the country. They operated online and communicated with their customers via email. At times, the fintech firms would not respond to emails, and that was because there was no regulation to get them to comply,” he stated.

According to him, these are some of the lapses that the new CBN policy has come to correct. He said that, under this policy and the new microfinance bank licensing, fintech firms must have physical offices across the country and comply with the same regulations governing banks.

Olaegbe did not see any red flag in the policy. Rather, he said, “I am seeing a buoyant industry and stable financial institutions. For instance, the apps and services from the fintech firms will be better, savvy and excellent because the sheriff is watching and ensuring the banks and fintech firms make the right moves that will strengthen the industry.

“However, what you may call a red flag may be the fact that the entry barrier is higher now. For instance, the fintech firms that obtained the microfinance bank license will pay N5 billion, not N2 billion. Even then, these fintech firms have discerning and capable investors, so paying the licensing fees wouldn’t be a challenge.

Going forward

THE path forward involves a delicate move, where the regulator must provide clearer rules operators crave, while the industry must prove it can manage capital with more discipline than the sectors that came before it.

In ensuring a thriving sub-sector, the CBN said the most urgent message from the ecosystem is that collaboration cannot be ad hoc. It must be structured, frequent and high-trust.
The apex bank noted that with the right reforms and a unified vision, Nigeria can move from fintech frontrunner to fintech rule-setter.