Navigating the Fintech Licensing Landscape in Nigeria: Time and Requirements
Nigeria’s burgeoning fintech sector offers immense opportunities, but aspiring startups must first navigate the regulatory landscape. Obtaining the necessary license from the Central Bank of Nigeria (CBN) is a crucial step. The specific license required depends on the fintech’s business model, with several categories available, including Payment Solution Services, Mobile Money Operator, Switching and Processing, and Regulatory Sandbox licenses.
Decoding the Licensing Process: A Time-Consuming Endeavor
The requirements for obtaining a fintech license in Nigeria are stringent. The Switching and Processing license demands the most substantial financial commitment. Applicants must provide evidence of ₦2 billion in shareholder funds and escrow another ₦2 billion with the CBN, a sum refundable only upon final approval. This type of license also requires detailed documentation. This includes audited financial statements, comprehensive corporate documentation, a robust business plan, Know Your Customer (KYC) and Anti-Money Laundering (AML) policies, as well as external certifications. The process demands a substantial investment of both time and resources. The Payment Solution Service Provider (PSSP) license is less demanding financially, with a capital requirement of ₦100 million. However, it still involves rigorous documentation, and startups can expect to undergo face-to-face inspections. Based on expert legal advice, obtaining the PSSP license could take between three to six months just for final approval. The CBN’s processing times can vary, and official guidelines will provide more in-depth information.
Ultimately, securing a fintech license in Nigeria is a complex and time-intensive undertaking. Fintech startups should carefully assess their business model, determine the appropriate license category, and prepare for a rigorous application process.
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