Nigeria’s central bank launches fintech regulatory sandbox

Nigeria’s central bank has launched a regulatory sandbox for the country’s budding financial technology (fintech) sector.

The Central Bank of Nigeria (CBN) announced the launch recently, describing the sandbox as its push to support “the development of new financial products and services that can improve how payment systems operate, mainly through digital channels.”

#CBN's Regulatory Sandbox is LIVE!!

As an innovation-embracing financial institution, CBN is determined to support the development of new financial products and services that can improve how payment systems operate, mainly through digital channels. pic.twitter.com/mroqrjco39

— Central Bank of Nigeria (@cenbank) January 25, 2023

CBN called on innovators in the fintech space to submit their expressions of interest to participate in the sandbox. Successful applicants will be able to conduct live tests of new and innovative products and services, delivery channels, and business models “in a controlled environment with regulatory oversight.”

The central bank believes that the sandbox will identify and encourage the development of innovative solutions that will enhance the design and delivery of payment and financial services in the West African country.

CBN has been working on the sandbox for the past two years. It released the framework for it in January 2021, revealing that it would welcome both the existing licensees as well as new entrants into the Nigerian fintech space.

CBN has not clarified whether it will be working with digital asset service providers in the sandbox. Nigeria is home to Africa’s biggest digital asset community, ranking among the top peer-to-peer hubs in the world as well. Nigerians have turned to digital assets to make payments and send and receive funds across the border as an alternative to the costly and slow available platforms.

As Nigeria made strides in fintech development, neighboring Ghana followed suit, announcing its own regulatory sandbox last week.

The Bank of Ghana (BoG) announced that it will take applications to its sandbox between February 13 and March 14. Startups must pursue new digital business models that are outside of existing regulations in order to qualify. The bank will also accept applications from startups working with “new and immature digital financial technology.”

BoG listed payments, remittances, crowdfunding, and micro-lending as the four key areas it will prioritize.

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