The Central Bank of Nigeria (CBN) has fined two of the country's most prominent fintech unicorns, Moniepoint and OPay, ₦1 billion each in the second quarter of 2024, sources with direct knowledge of the matter have revealed. The penalties follow a routine CBN audit of the fintech sector, which uncovered compliance issues with regulatory frameworks.

The CBN has increasingly relied on fines to enforce regulatory compliance, with Nigerian banks paying a combined ₦678 million in penalties in 2023. In October 2024, the central bank and the Securities and Exchange Commission (SEC) imposed a ₦1.5 billion fine on ten commercial banks, including Zenith and GTBank, for various infractions in the first half of the year.

At least four other fintech companies were also penalized, although the details of these fines remain unknown. The CBN's increased scrutiny of the fintech sector comes as companies like OPay and Moniepoint have grown rapidly, serving millions of users. OPay claims a customer base of around 40 million, while Moniepoint, which processed 5.2 billion transactions in 2023, does not disclose specific customer numbers but is similarly large.

As these fintech giants have grown in influence, concerns have mounted over their regulatory frameworks. A significant issue is that many fintechs, including OPay and Moniepoint, still operate under microfinance bank licenses. Originally intended to support micro, small, and medium enterprises, these licenses have allowed the companies to expand rapidly and service millions of customers. However, with that expansion has come heightened concern that the current licensing framework is inadequate to safeguard customers effectively.

Beyond licensing concerns, the CBN has also expressed concerns about the fintechs' compliance with Know Your Customer (KYC) processes. In April 2024, the central bank imposed a two-month ban on customer onboarding for several fintech companies, including Kuda Bank and Palmpay, citing non-compliance with KYC standards. The ban forced fintechs to overhaul their onboarding procedures and commit to improving their compliance measures.

Moniepoint declined to comment on the matter. OPay, however, categorically refuted the claims, stating that "these claims are entirely false." The Central Bank of Nigeria did not immediately respond to a request for comments.

The CBN's crackdown on regulatory infractions in the fintech sector is likely to continue, as the central bank seeks to ensure that companies operating in the space adhere to strict guidelines and safeguards. As the fintech sector continues to grow and evolve, it remains to be seen how companies will adapt to the changing regulatory landscape.

The implications of the CBN's actions are far-reaching, with potential consequences for the entire fintech ecosystem. As the sector continues to mature, it is essential that companies prioritize regulatory compliance and customer protection, lest they face the wrath of the central bank.