Financial technology often referred to as “fintech” has been a thriving aspect of technology for the past few years. It is a term used to describe the deployment of new technologies to financial services. It is a technological approach to concepts such as financial literacy and education, stock investment, cybersecurity, blockchain technology, retail banking, and crypto-currencies, amongst other innovations to make these financial transactions faster, seamless, and easily accessible to consumers.[i]
A fintech company is a company that relies on technologies to address consumer needs in financial management. They aim to compete with or completely replace the traditional financial service providers by offering a superior experience or simply more efficient solutions to existing problems.[ii]
In Nigeria, the number of FinTech companies has grown extensively over the years, driven by the need to increase the digitalization of financial services at a lower cost of operations, strengthen global regulatory structures, and upgrade FinTech services beyond mobile banking to including lending, insurance, investment, personal finance management, and others.
Who Regulates Financial Technology Companies in Nigeria?
The major Regulator of Financial technology companies in Nigeria is the Central Bank of Nigeria (CBN).[iii] Other regulators include the National Deposit Insurance Corporation, the Nigerian Communication Commission, the Securities and Exchange Commission (SEC), National Insurance Commission, the Corporate Affairs Commission (CAC), and Nigeria Interbank Settlement System (NIBSS)
Registration with Corporate Affairs Commission (CAC):
Every individual, local or foreign company that wants to establish a Fintech startup or Company in Nigeria must first incorporate a company with the CAC. The procedure for company registration with the CAC is as follows:
- Check for the availability of the proposed company name with the Corporate Affairs Commission (CAC) and reserve it
- The information to be included in an application form for Registration of a Company (Form CAC 1.1) are:
- Address of the registered office of the company
- Authorized Capital of the Company- the regular authorized share capital for a local company is One Million Naira (N1,000,000).
- Particulars of 2 Directors and Shareholders.
- Statutory Declaration of Compliance with the Requirements of CAMA by a Legal Practitioner
- The documents required for the second stage and completion of the incorporation with CAC include:
- Signed and Stamped Copies of the Memorandum and Articles of Association
- Original documents authorizing the incorporation where applicable.
- Photocopy of the data page of the passport or the national identity card of each director or shareholder.
If the shareholders are foreigners, there are other registrations required by law to be carried out by the company/Fintech.[iv] They include:
- Registration with the Nigeria Investment Promotion Commission (NIPC):
- Business Permit:
- National Office of Technology Acquisition and Promotion (NOTAP) Registration:
For a Fintech company to fully operate in Nigeria, it must first be registered with the Corporate Affairs Commission (CAC). Upon the registration of the company with the CAC, the company will then apply for requisite licenses with other regulatory agencies, which may include the Central Bank of Nigeria, the Nigerian Communication Commission, etc.[v] If the FinTech company seeks to engage in a money lending business, it may also obtain a license from the various state government agencies regulating the money lending business. The license a Fintech startup obtains determines how they operate.
In conclusion, the growth of technology in recent times cannot be over-emphasized, and its application of it to the finance and banking sectors is an opening for many possibilities and advantages.
[iii] https://www.mondaq.com/nigeria/fin-tech/1257698/starting-a-fintech-business-in-nigeria accessed on 03/05/2023
[v] https://www.resolutionlawng.com/how-to-register-a-fintech-company-in-nigeria/ accessed on 02/05/2023
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