CBN Clarifies Fintech Regulations and Interest Rate Adjustments

The Central Bank of Nigeria (CBN) has clarified its ongoing engagement with financial technology companies, known as fintechs, and the regulatory measures being implemented.

During a recent announcement in Abuja, CBN Governor Olayemi Cardoso addressed the rationale behind these interactions, emphasizing the importance of managing inflation and achieving price stability.

In response to these economic goals, the CBN decided to raise its benchmark interest rate, the Monetary Policy Rate (MPR), by 150 basis points to 26.25 percent from 24.75 percent. This marks the third increase in less than three months.

Governor Cardoso acknowledged the challenges posed by inflation, highlighting the complexity of addressing these issues effectively. Despite this, he expressed confidence in the strategies employed by the CBN to combat inflation and stabilize the foreign exchange market, anticipating positive outcomes in the near future.

These developments were disclosed during the 295th monetary policy committee (MPC) meeting in Abuja held yesterday, Tuesday.

Inflation has been on an upward trend for over 13 months, reaching 33.69 percent Year-on-Year, primarily driven by food inflation.

Regarding fintech companies, Governor Cardoso clarified that the tightening of regulations is intended to enhance oversight rather than hinder their operations. The aim is to ensure that the Nigerian public derives maximum benefits from the fintech sector.

He emphasized that fintechs are valued for their contributions to the country and globally, and the regulatory measures are aimed at supporting and strengthening their impact. While concerns about illicit financial activities and money laundering persist, the CBN is focused on enhancing surveillance within the sector.

Governor Cardoso reassured that despite the increased regulatory scrutiny, no fintech organization has lost its license.