Nigeria: Smart Regulation Key to Financial Stability and Inclusive Growth, Says SEC DG

Dr. Emomotimi Agama, Director-General of the Securities and Exchange Commission (SEC), has emphasized that smart regulation is essential for driving inclusive growth and ensuring financial stability in a rapidly evolving financial ecosystem. He made this assertion during his keynote address at the FintechNGR conference in Lagos, themed “Positioning Africa’s Fintech Ecosystem to Accelerate Inclusive Growth.”

According to Agama, smart regulation refers to a balanced regulatory approach that provides oversight while maintaining the flexibility necessary to foster innovation. He noted that this form of regulation ensures fintech innovations meet key standards of security, consumer protection, and market integrity while still allowing room for experimentation and growth.

Agama highlighted the SEC’s implementation of a Regulatory Incubation (RI) program, which allows fintech companies to test their business models in a controlled environment before launching full-scale operations. This initiative promotes innovation while safeguarding the broader financial ecosystem.

“The RI program has already yielded tangible results, with several recent approvals and others currently undergoing thorough assessment,” Agama stated. He added that the SEC’s three-pronged regulatory approach focuses on safety, market expansion, and problem-solving. This strategy ensures regulatory compliance, fosters stakeholder confidence, and creates value for innovators seeking legitimacy.

Agama also underscored the importance of collaboration with other regulatory bodies, both locally and internationally, to create a harmonized regulatory framework that supports fintech innovations. The SEC works closely with the Central Bank of Nigeria (CBN) and the Financial Services Regulatory Coordinating Committee to achieve this goal.

Fintech, especially in Africa, offers transformative potential, said Agama. It has the capability to address long-standing issues such as financial exclusion, limited access to credit, and inefficiencies in traditional financial services. SEC’s approach to regulation is not only about enforcement but also about creating an enabling environment where innovation can thrive while safeguarding stakeholder interests.

“The Investments and Securities Act (ISA) grants the SEC a dual mandate of regulating and developing the capital market,” Agama explained. “By leveraging smart regulation, fintech and innovation can work hand-in-hand to position Africa’s fintech ecosystem for accelerated, inclusive growth.”

Agama highlighted how fintech solutions like mobile payments, peer-to-peer lending, and digital currencies are driving financial inclusion on an unprecedented scale. These innovations allow individuals, small businesses, and underserved populations to access financial services, contributing to broader economic participation and growth.

He pointed out that fintech services in Nigeria have contributed an average of 56% to the nation’s GDP since 2023, with financial services recording growth rates of 30% in the same period. Despite its potential, fintech poses significant regulatory risks, particularly in terms of data misuse, cybersecurity threats, and investor fraud. Companies raising funds without regulatory approval expose investors to fraud, undermining the SEC’s investor protection mandate.

Agama stressed that the success of fintech in driving inclusive growth depends on a robust regulatory framework. “Regulation ensures that fintech solutions are safe, sustainable, and beneficial for all users,” he said, reaffirming the SEC’s commitment to fostering a resilient and inclusive financial system through forward-thinking regulations.

He urged governments to promote fintech through initiatives such as digital infrastructure development, public-private partnerships, and educational programs aimed at building digital skills. Additionally, Agama called on fintech innovators to continue developing solutions that address Africa’s unique challenges, particularly in areas like financial inclusion, access to capital, and wealth creation for underserved populations.