NIGERIA Law and Practice Contributed by: Isa Alade, Seyi Bella, Ayodele Adeyemi-Faboya and Ayomikun Ogunkanmi, Banwo & Ighodalo
agencies continue to dole out policies that could impact the operations of companies within the fintech sector. Adoption of cryptocurrency Following the relaxation of the restrictions on cryptocurrency transactions in Nigeria, there is an optimistic outlook for increased acceptance and utilisation of digital currencies in various sectors of the Nigerian economy. Businesses, financial institutions, and the general public are expected to embrace the convenience and efficiency offered by digital currencies, thereby fostering a more dynamic and inclusive financial ecosystem. It is likely that regulatory frameworks will be established to provide clarity and ensure the secure and responsible use of cryptocur - rency. 2. Fintech Business Models and Regulation in General 2.1 Predominant Business Models The most prevalent fintech business models in Nigeria are: • payments and remittances; • lending and financing services; • investech; and • personal finance. Payments and Remittances The payments subsector of the fintech industry is by far the most active in Nigeria and has received the most interest from investors and regulators alike. Payment services cover business-to-busi - ness applications (such as payment-processing providers and solutions for accepting payments) and business-to-consumer applications (includ - ing services such as mobile wallets and payment applications that enable individuals to pay on
the go and make peer-to-peer transfers). Remit - tance-related products focus on cross-border money transfers from migrant populations to their “home” country: indeed, IMTOs, in particu - lar, have had their operations limited to inbound transfers but are now allowed to also engage in business-to-person and business-to-business inbound transfers, unlike the old framework under which IMTOs could only deal in personal remittances. Lending and Financing Digital lending applications and Buy Now, Pay Later (BNPL) services, also referred to as “point of sale instalment loans” , have proliferated the Nigerian fintech space. The ability to provide quicker loans through a simplified lending pro - cess (mostly without collateral) gives this model a competitive advantage over traditional lend - ing, but legacy players are also deploying similar solutions. Nigerian fintech companies also pro - vide innovative solutions for financing assets and trade, particularly through the instrumental - ity of sale credits. Investech Investech start-ups are leveraging technology to allow Nigerians to grow their funds. These opportunities range from real estate to agricul - ture and the money market. These fintech com - panies focus on deploying solutions to improve and democratise investment and wealth man - agement to their customers. Personal Finance Another popular business model for fintech com - panies in Nigeria is offering a personal savings solution that manages personal bills, accounts and/or credit.
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