Unlocking Nigeria’s Fintech Potential: Kuda MD Calls for Regulatory Reforms and Infrastructure Investment

Nigeria’s fintech industry is experiencing rapid growth, attracting $2 billion in investments in 2024, but key challenges threaten its sustainability. Speaking at a Nigeria Deposit Insurance Corporation (NDIC) event, Musty Mustapha, Managing Director of Kuda Microfinance Bank, emphasized the need for a unified regulatory framework and increased infrastructure investment to accelerate the sector’s development.

While fintech has played a significant role in advancing financial inclusion—pushing Nigeria’s inclusion rate to 64% in 2023—regulatory fragmentation remains a major hurdle. Mustapha highlighted that fintech firms navigate a complex landscape of oversight bodies, including the Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC), and NDIC, leading to compliance bottlenecks.

He stressed that harmonizing regulations would foster innovation and attract further investment while ensuring fintech companies have equal access to critical financial infrastructure. Without clear and streamlined policies, the industry risks stagnation despite its potential.

Cybersecurity Risks Undermining Trust

Nigeria ranks fifth globally in cybercrime, with rising threats such as phishing attacks, insider fraud, and financial system breaches eroding trust in digital payments. Mustapha urged industry players to:

Strengthen cybersecurity frameworks.
Adopt multi-factor authentication.
Collaborate with global cybersecurity firms and regulators.

By enhancing security measures, fintech companies can boost consumer confidence and drive greater adoption of digital financial services.

Bridging the Financial Inclusion Gap

Despite fintech’s expansion, millions of Nigerians—especially in rural areas—remain financially excluded. Mustapha cited low smartphone penetration and poor digital literacy as key barriers to adoption. He recommended:

Developing more inclusive financial products, including USSD and offline payment solutions for cash-dependent populations.
Launching nationwide financial literacy campaigns to build trust in digital banking.

These measures, he noted, would help fintech solutions reach underserved communities and accelerate financial inclusion.

Tackling the Fintech Talent Shortage

Nigeria’s tech workforce is among the fastest-growing in Africa, but brain drain is slowing local fintech innovation. Many skilled professionals in areas like blockchain, AI, and cybersecurity are migrating abroad for better opportunities.

To address this, Mustapha proposed:

Partnerships between fintech firms and universities to develop specialized talent.
Exchange programs with international companies to enhance skills and retain top professionals.

By investing in local talent, Nigeria’s fintech sector can maintain its competitive edge and continue driving innovation.

The Need for Infrastructure Investment

Fintech’s expansion is also being hindered by poor broadband access, erratic power supply, and inadequate payment networks, particularly in underserved regions. Mustapha called for public-private partnerships (PPPs) to improve digital infrastructure, ensuring fintech solutions can scale effectively.

Positioning Nigeria as a Fintech Powerhouse

With the right reforms and investments, Nigeria’s fintech sector can solidify its leadership in Africa’s digital economy. Mustapha’s call for regulatory harmonization, stronger cybersecurity, financial inclusion efforts, talent development, and infrastructure investment highlights the key priorities needed to unlock the industry’s full potential.