In a continuation of the Central Financial institution of Nigeria’s (CBN) elevated scrutiny of fintech startups, two of the nation’s most distinguished unicorns, Moniepoint and OPay, had been fined ₦1 billion every within the second quarter of 2024, sources with direct information of the matter informed TechCabal. Whereas a number of different fintech corporations had been additionally penalized, the 2 corporations had been the toughest hit.

The penalties adopted a routine CBN audit of the fintech sector, which revealed compliance points. In keeping with two sources accustomed to the method, these regulatory checks are a normal process for banks and monetary establishments beneath CBN oversight.

At the least 4 different fintech corporations had been equally penalized, although the small print of those fines stay unknown.

The CBN has more and more relied on fines to implement regulatory compliance. In 2023, Nigerian banks paid a mixed ₦678 million in penalties. In October 2024, the central financial institution and the Securities and Trade Fee (SEC) imposed a ₦15 billion superb on ten industrial banks, together with Zenith and GTBank, for numerous infractions within the first half of the 12 months.

Till just lately, Nigeria’s quickly rising fintech sector largely operated with out CBN interference. Nonetheless, the speedy enlargement of fintechs like OPay and Moniepoint, which now serve tens of millions of customers, has invited larger scrutiny. OPay, as an example, claims a buyer base of round 40 million, whereas Moniepoint, which processed 5.2 billion transactions in 2023, doesn’t disclose particular buyer numbers however is equally giant.

As these fintech giants have grown in affect, so too have issues over their regulatory frameworks. A big challenge is that many fintechs, together with OPay and Moniepoint, nonetheless function beneath microfinance financial institution licenses. Initially meant to assist micro, small, and medium enterprises, these licenses have allowed the businesses to broaden quickly and repair tens of millions of shoppers. Nonetheless, with that enlargement has come heightened concern that the present licensing framework is insufficient to safeguard prospects successfully, in accordance with one supply.

Past licensing, the CBN has additionally expressed issues in regards to the fintechs’ compliance with Know Your Buyer (KYC) processes. In April 2024, the central financial institution imposed a two-month ban on buyer onboarding for a number of fintech corporations, together with Kuda Financial institution and Palmpay, citing non-compliance with KYC requirements. The ban compelled fintechs to overtake their onboarding procedures and decide to enhancing their compliance measures.

Moniepoint declined to touch upon any a part of this story. 

“We categorically refute the claims that OPay Digital Companies was fined by the Central Financial institution of Nigeria to the tune of ₦1 billion for regulatory infractions,” OPay mentioned in a press release to TechCabal. “These claims are solely false.” 

The Central Financial institution of Nigeria didn’t instantly reply to a request for feedback.

Editor’s notice: A earlier model of this story said that the CBN fined banks ₦1.5 billion. The proper determine is ₦15 billion.