The Managing Director of Nigeria Deposit Insurance Corporation (NDIC), Mr. Umaru Ibrahim, has noted that more regulations are coming in the Nigerian fintech space. He made the disclosure in a speech in Kaduna. Speaking before the Finance Correspondents Association of Nigeria (FICAN) in an event with a theme “COVID-19 & FinTech Disruption: Opportunities and Challenges for Banking System Stability and Deposit Insurance”, he dropped these lines.
The emergence of fintechs is relatively new in this environment and the Central Bank of Nigeria has produced a policy guideline for the registration, licensing, and supervision of fintechs.
We are also involved in that and we partner with other regulatory authorities such as the Securities and Exchange Commission and well the NCC. That is because each and every one of us has a role to play in the licensing, supervision, and regulation of fintechs.
We would continue to develop and improve your knowledge and skills so that you are up to date on what is happening globally and locally in terms of the financial system, so that you can help disseminate information and educate the generality of the public and so that the public remains aware and protected.
There are a lot of issues around consumer protections, even without the emergence of complicated products and services and channels of financial intermediation,…, even to day-to-day ordinary transactions between customers and banks.
The key line is this – “There are a lot of issues around consumer protections”. I do think, since it is NDIC that is speaking, you would expect a new regulatory requirement where funds in digital wallets and online accounts would need to be insured. You cannot argue otherwise when you remember what happened in Thrive Agric.
Sure, it needs to be done with no motive to annihilate the fintech sector with disproportionate high wattage of regulations; think Ant Group in China and the recent evolving regulation. If they get it wrong, the fintechs will just become “micro” banks which would be really bad.
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Will the regulators involve operators in the industry while crafting the new policy, or the usual way of entering the kitchen and dishing out whatever they like, irrespective of tastes and medical conditions?
Our economy will breathe better if those crafting laws get their inputs from real players in the industry, and not government employees who cannot successfully run a kiosk making laws for entrepreneurs.
We have a lot of angry people in government, and we must ensure that they do not transfer the aggression to innocent and hardworking compatriots.
This has always been my worry. Regulators ignore the players in fashioning out laws and so the laws often end up only collecting revenue but not guaranteeing the real growth of the local players in the industry. In Ghana, we have a similar situation. People in government have personal scores to settle with some industry players and that is expressed in the laws and policies they make. They often apply specific portions of the laws at particular times for parochial rather than community interest. Very sad commentary.
But that’s exactly what is going on.