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Nigeria’s fintech industry, despite being one of the fastest-growing in Africa, remains significantly dependent on foreign investment, a vulnerability that exposes the sector to global market shocks, the Central Bank of Nigeria (CBN) has warned.
In its 2025 Fintech Policy Insight Report, the apex bank noted that Nigerian startups raised about $520 million in equity funding in 2024, a decline from roughly $747 million in 2019, when the country accounted for nearly 37 per cent of all startup investment on the continent. While the sector has shown resilience amid global economic uncertainty, the CBN cautioned that heavy reliance on external capital leaves fintech firms exposed to swings in international financial conditions.
According to the report, Nigeria’s fintech performance through recent global macroeconomic volatility reinforces its status as a major innovation hub. However, the sharp rise in interest rates across advanced economies in 2022 contributed to a slowdown in venture capital flows, highlighting structural weaknesses in funding sources.
“These dynamics underline the need to deepen domestic funding options, including greater use of Nigeria’s capital markets, to reduce currency risk and support sustainable fintech growth,” the CBN stated.
CBN Governor Olayemi Cardoso said Nigeria’s financial sector is undergoing a profound transformation, with fintechs playing a central role. Over the past decade, the ecosystem has evolved from a small cluster of startups into one of Africa’s most dynamic innovation environments.
“Even in the face of global economic headwinds, Nigerian fintech firms continued to attract investment and drive change,” Cardoso said. “With improving currency stability and a more balanced domestic economy, financial innovation is increasingly well-positioned to deliver inclusion at scale.”
Beyond funding, the report highlighted Nigeria’s strength in digital financial infrastructure. More than a quarter of all electronic transactions in the country are processed through real-time payment channels. In 2024 alone, close to 11 billion transactions were completed, up from five billion in 2022. The CBN described the Nigeria Inter-Bank Settlement System Instant Payment (NIBSS NIP) platform as one of the most mature and widely adopted instant payment systems globally.
However, the central bank stressed the importance of safeguarding system integrity and market confidence. It pointed to ongoing compliance reforms, stronger anti-money laundering supervision, and enhanced consumer protection as critical to maintaining investor trust.
By prioritising domestic capital mobilisation, regulatory modernisation, and innovation infrastructure, the CBN said Nigeria aims to strengthen its position not just as a fintech leader, but as a regulatory reference point for other emerging and high-growth economies.
The report also revealed persistent operational challenges within the sector. About 87.5 per cent of surveyed stakeholders said compliance and risk-management costs significantly constrain innovation, while regulatory approval timelines continue to delay product launches.
Looking ahead, 62.5 per cent of fintech firms plan to expand into other African markets. While there is strong support for regulatory passporting frameworks to enable cross-border growth, the CBN warned that successful regional expansion will depend on more stable domestic funding and closer regulatory coordination across jurisdictions.
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