Nigeria: A FinTech Legal Overview

Introduction

With more than 400 active fintech companies in 2025, an increase from 255 fintech companies in 2024, the fintech industry has transformed into an essential sector of the Nigerian economy and continues to drive financial inclusion, bridging the gap between traditional finance and underserved populations and fuelling Nigeria’s growth as a regional leader in digital finance.

Economic Conditions

Nigeria has implemented several reforms to restore macroeconomic stability, including removing the petrol subsidy, unifying and significantly liberalising the exchange rate and instituting tax reforms. These reforms have yielded positive results by reducing fiscal pressures and unwinding some of the critical macroeconomic distortions in the country that held back growth in the past. According to the National Bureau of Statistics, Nigeria’s overall economy grew by 18.78% to NGN194.78 trillion (USD131.93 billion) in H1 2025 compared to NGN163.99 trillion (USD111.08 billion) in H1 2024. The strengthening of the economy through these reforms has also been largely driven by the recent rebasing of the Naira, a rebound in oil production and a resilient non-oil sector.

The fintech sector has emerged as a key player in Nigeria’s economic resurgence. In 2025, the country saw a noticeable shift from traditional banking to digital financial services, with platforms like Opay and Palmpay hitting major milestones. Data from the Nigeria Inter-Bank Settlement System shows mobile money transactions skyrocketed to USD13.49 billion in the first quarter of 2025, an enormous leap from USD833.43 million in the first quarter of 2021.

As Africa's most populous country, Nigeria is poised for significant fintech growth, driven by factors such as a youthful population, rising smartphone penetration and increased regulatory emphasis on promoting financial inclusion.

Level of Activity, Trends and Developments

Nigeria’s fintech sector continues to thrive as a key driver of innovation and financial inclusion. The ecosystem is characterised by the adoption of advanced technologies, strategic partnerships and active regulatory oversight/support.

Regulatory change in the cryptocurrency sub-sector

Cryptocurrency and blockchain technology have emerged as a rapidly expanding sub-sector within the fintech sector, with more than 30 active cryptocurrency and Web 3.0 players in Nigeria by early 2025. This surge in activity has been exacerbated by regulatory changes such as designation of cryptocurrencies as securities under the Nigeria Tax Act 2025. Additionally, under the Investment and Securities Act (ISA) 2025, virtual asset service providers (VASPs) are now regulated by the Securities and Exchange Commission (SEC). These regulatory moves are expected to bring clearer oversight and trust across the digital asset space, opening the door to greater investment opportunities in the sector.

Rise of insurtech operations

Insurtech is a vibrant sub-sector of the fintech industry, and this past year there have been ongoing efforts to fast-track the rate of insurance adoption in Nigeria by many innovators and tech enthusiasts. These efforts have sparked a wave of new insurtech startups, each focused on delivering smart, accessible solutions to modernise the insurance landscape. In response to this momentum, the National Insurance Commission (NAICOM) recently introduced a regulatory framework designed to guide the safe and responsible rollout of insurtech services.

New investment opportunities for diaspora Nigerians

In a bid to provide diaspora Nigerians with greater access to investment opportunities in Nigeria, the Central Bank of Nigeria (CBN) introduced two new types of accounts for Nigerians in the diaspora: the non-resident Nigerian ordinary account (NRNOA) and the non-resident Nigerian investment account (NRNIA). The NRNOA and NRNIA aim to provide diaspora Nigerians with more streamlined financial management and investment opportunities in Nigeria.

Buy now, pay later (BNPL) services expansion in Nigeria

BNPL has become a popular tool for consumer credit, offering flexible payment options that align with evolving customer preferences in Nigeria. According to a report by Research and Markets, BNPL services are expected to grow by 13.8%, reaching USD1.62 billion in 2025, up from USD1.42 billion in 2024, fuelled by strategic partnerships with platforms like Jumia and innovative lending models.

Venture capital-backed funding has also fuelled this growth, with start-ups like OmniRetail securing USD20 million in Series A funding. Furthermore, players like CredPal and Easybuy are scaling operations and entering partnerships for seamless instalment plans on consumer goods.

Despite regulatory hurdles, such as the Federal Competition and Consumer Protection (FCCPC) guidelines on digital lending, it is still expected that the BNPL ecosystem in Nigeria will continue to contribute significantly to the Fintech sector’s growth in 2025.

New Legislation

The following new legislative and regulatory measures, which impact the rapidly evolving fintech sector in Nigeria, were recently introduced.

Investment and Securities Act 2025

This law marks a significant shift from previous regulatory uncertainty and officially recognises virtual assets, including cryptocurrencies. Consequently, VASPs are now regulated by the SEC, which will provide greater clarity, fostering trust within the ecosystem and potentially attract increased investment.

This law marks a significant shift from previous regulatory uncertainty and officially recognises virtual assets, including cryptocurrencies. Consequently, VASPs are now regulated by the SEC, which will provide greater clarity, fostering trust within the ecosystem and potentially attract increased investment.

Nigeria Tax Act 2025

In 2025, four new bills were signed into law, which replace existing tax laws in the country. This represents the most comprehensive tax reform in Nigeria’s history and will impact low-income individuals and small businesses, including start-ups. This Tax Act introduces a more structured framework for digital asset transactions, signifying the government's intent to integrate the crypto sector into the formal economy and generate revenue. The new law classifies cryptocurrencies as securities, imposing taxes on individuals and start-ups operating in the sector.

NAICOM guidelines for insurtech operations in Nigeria 2025

To support the growth of insurtech, NAICOM introduced new guidelines that provide a regulatory framework for the responsible deployment of insurtech services. These rules aim to encourage innovation while ensuring policyholder protection, market stability and public trust.

FCCPC Digital Lending Regulations 2025

The FCCPC has released guidelines on digital lending in Nigeria, imposing more stringent requirements on digital lenders. This move has been linked to the need to effectively regulate digital lending and prevent unscrupulous practices in the sector.

Potential Hurdles

Nigerian fintechs face some challenges that could impact their growth and sustainability, including the following.

• Foreign exchange volatility and economic instability: While the Nigerian exchange has been largely stabilised by the current administration, high inflation has continued to reduce consumer spending power, impacting the demand for fintech services. Also, fintech start-ups may face higher operating costs due to rising inflation​. ​
• Regulatory uncertainty: While the regulatory environment is evolving, inconsistencies and abrupt policy changes may disrupt fintech operations. The enforcement of new rules, such as those governing digital lenders, could introduce compliance burdens that smaller start-ups may struggle to meet​.
• Infrastructure deficiencies: Limited access to reliable electricity and internet connectivity in some regions hampers the scalability of digital services, particularly in rural areas where financial inclusion efforts are targeted​.

Despite these challenges, Nigerian fintech companies continue to demonstrate remarkable resilience and capacity for innovation. There is a large unbanked population that presents a vast untapped market for financial services. Furthermore, while there is still need for more reforms and stability in the economy, the Nigeria fintech sector has the potential for further growth and development.