Senate Seeks Tougher Laws to Regulate Fintechs, Combat Investment Scams

The Senate on Wednesday moved to tighten regulatory control over Nigeria’s fast-growing financial technology sector by consolidating legislative proposals that would strengthen the supervisory powers of the Central Bank of Nigeria (CBN).

Lawmakers also signaled plans to introduce stricter measures to combat Ponzi scheme operations following a series of financial scams that have affected many Nigerians, including the reported N1.3 trillion allegedly lost to Crypto Bullion Exchange (CBEX) in April 2025.

The initiatives received broad backing from stakeholders during a public hearing on the Banks and Other Financial Institutions Act (Amendment) Bill 2026, alongside a motion seeking an investigative hearing into Ponzi scheme activities in the country.

The hearing was jointly organised by Senate committees on Banking, ICT & Cybercrime, Capital Market, and Anti-Corruption and Financial Crimes.

Speaking at the session, Chairman of the Senate Committee on Banking, Adetokunbo Abiru, said the proposed amendment is designed to strengthen the legal framework governing the CBN’s oversight of fintech companies operating in Nigeria.

According to him, the bill seeks to amend the Banks and Other Financial Institutions Act (BOFIA) 2020 to establish a clear statutory framework for the designation, registration and supervision of Systemically Important Institutions, particularly technology-driven financial service providers.

Senator Abiru noted that Nigeria’s financial ecosystem has expanded rapidly in the past decade, with fintech platforms — including mobile money operators, digital lenders, payment platforms and settlement companies — now serving millions of customers and processing large volumes of transactions.

He, however, warned that the pace of innovation has outstripped existing laws, creating regulatory gaps that could pose risks to financial stability, consumer protection, data sovereignty and national security.

Under the proposed amendment, the CBN would be empowered to classify certain fintech firms as systemically important institutions, establish a national registry to improve transparency and ownership disclosure, strengthen risk-based supervision of technology-driven financial services and promote stronger safeguards for financial data.

Stakeholders at the hearing, including representatives of the CBN, the Chartered Institute of Bankers of Nigeria (CIBN), Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), and the Nigeria Deposit Insurance Corporation (NDIC), expressed support for the proposed reforms.

Participants also endorsed the Senate’s plan to strengthen enforcement against Ponzi schemes, stressing the need for greater investor education, stronger inter-agency collaboration and tougher regulatory actions to prevent further financial losses from fraudulent investment operations.