The Central Bank of Nigeria, CBN, and the Nigeria Inter-bank Settlement System, NIBSS, have unveiled regulatory sandbox to facilitate digital innovation by financial technology companies.
Tagged “Financial Industry Sandbox”, the initiative will be managed by the newly created Financial Service Innovators Association of Nigeria (FSI), under the supervision of the CBN and NIBSS.
Speaking to journalists on the sidelines of the launching of the, Mr. Musa Jimoh, Deputy Director, Banking and Payment System Department, CBN, said that the objective of the sandbox is to empower fintecs to come up with innovative digital products that will enhance achievement of financial inclusion in the country.
Jimoh said the initiative is in recognition of the roles of fintechs in the financial industry and the need for regulatory support, to assist them to play these roles.
He further stated that the CBN in partnership with the Bill and Melinda Gates Foundation is developing a regulatory framework for the fintechs as a new group in the financial services sector.
The director said: “The objective is to empower small companies which we refer to as start-ups, innovators, technology companies and young Nigerians that have great ideas, but lack the financial wherewithal to bring out their products or even integrate with the banks and all that.
“We don’t want those ideas to just die off. So, what the CBN actually did was to bring all these start-ups together and try to understand their pains and constraints and see how we can give them helping hands.
“Our belief is that if we give them helping hands, we are basically building the economy. We are bringing a new categorisation of companies called fintechs. So, the essence of this association is to bring them together so that they can come with one voice to tell the regulators and the banking community how we can support them and how we can leverage on some of the digital services that they have. Overall, their contribution would lower the barrier for financial inclusion.
“There is this global understanding that digital technology would aid financial inclusion because it would be able to provide tools that from your house, your homes and the gadgets you carry, you are able to access financial services.
“This is an association where all of them can come together, educate themselves and have a common understanding of what the entire ecosystem needs.
They are not registered entities. So, they are not even on our radar.
“This might lead to financial support, but for now, not yet. But one of the things we have done now is to start the process of introducing a regulatory sandbox that would lower the barrier for entry.”
“I think before the middle of this year, the framework should be out. We are actually working in partnership with Bill and Melinda Gates Foundation. They are the ones giving us technical assistance in developing the framework.”
