Lagos, Nigeria — At the ongoing Nigeria Fintech Week 2024, the Director-General of the Securities and Exchange Commission (SEC) Nigeria Dr Timi Agama, emphasized the transformative potential of fintech in driving economic growth and financial inclusion across the nation. The DG reiterated the SEC’s commitment to fostering a robust regulatory environment that encourages innovation while safeguarding investors.
The DG stated, “The capital market is about distributive wealth, and the SEC serves as the apex regulator. Wherever we find partners committed to ensuring that financial aid and opportunities reach everyone, the capital market will be present, with the SEC leading the charge.”
With the rise of mobile payments, peer-to-peer lending, and digital currencies, fintech platforms are making significant strides in financial inclusion. The DG noted that the current administration is particularly focused on empowering the youth, a demographic that plays a vital role in the fintech landscape. “The population of individuals in the fintech space largely consists of young people, enabling them, alongside small businesses, to access the financial system and contribute to broader economic participation and growth,” he added.
The potential for fintech to boost Nigeria’s economy is evident, with the sector contributing an average of 56% to GDP since 2023 and financial services achieving a remarkable growth rate of over 30% during the same period. However, the DG cautioned that this potential comes with significant regulatory risks. “Without appropriate oversight, large amounts of invested data could be misused, and the systems remain vulnerable to cyber-attacks, leading to severe consequences.”
Moreover, he highlighted concerns regarding the use of fintech to raise public funds without the necessary regulatory approval, which could lead to extortion and other financial malpractices. The DG firmly stated that the SEC will not allow the fintech space to undermine its Investor Protection Mandate.
“The success of fintech and financial services must be achieved within a regulated environment,” he asserted. “Regulations are crucial for ensuring that fintech solutions are safe, sustainable, and beneficial for all users.”
The DG introduced the concept of smart regulation, which aims to strike a balance between innovation and consumer protection. “At the SEC, we have adopted the Regulated Innovation Program, allowing fintech firms to test their business models in a controlled environment,” he explained. He further elaborated on the introduction of the Accelerated Regulated Innovation Program, which is designed to streamline this process and enhance Nigeria’s position as a global fintech hub.
The DG expressed confidence in Nigeria’s potential to lead the fintech sector in Africa and the Middle East, noting the enthusiastic response from stakeholders and the SEC’s commitment to protecting young fintech entrepreneurs. “We will continue to collaborate with all stakeholders to ensure that our environment is stable, acceptable, and inclusive, enabling innovation to flourish within a framework that protects the financial ecosystem,” he stated.
The program has already produced impressive results, but the DG emphasized the importance of maintaining a structured approach to market entry. “We must ensure governance and guide those who wish to enter the space. It’s not just about allowing everyone to come in; it’s about ensuring they do so with a genuine interest in our country’s sovereignty and economic strength,” he said.
The SEC’s two-prong approach to regulating innovation in the Nigerian capital market focuses on safety and market research, prioritizing collaboration with both local and international regulators. The DG reiterated that a stable regulatory environment requires the collective efforts of co-regulators, including the Central Bank of Nigeria and international bodies like the International Organization of Securities Commissions (IOSCO).
Trust, he noted, is the cornerstone of any financial system. “Smart regulation builds trust by ensuring that fintech companies operate transparently and respect consumers’ rights. Our regulations require all fintech platforms dealing with digital assets, cryptocurrencies, and other securities to implement robust anti-money laundering measures,” he concluded, emphasizing the SEC’s dedication to creating a safe environment for both investors and fintech companies in Nigeria.
As Nigeria continues to navigate the evolving landscape of fintech and blockchain technology, the SEC remains committed to fostering a secure and innovative financial ecosystem that empowers all participants.
