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Anatomy of Nigerian Fintech Laws

Board effectiveness is not mere box-ticking. The effectiveness of the board of directors of a Nigerian Fintech is crucial to the rebranded National Financial Inclusion Strategy.

In this commentary, we argue that board effectiveness in Nigerian Fintech is beyond box-ticking and helps manage risk, strategy, and governance – clear indices of investor readiness.


Central Bank of Nigeria (CBN) defines financial technology (Fintech) services as “technologically enabled financial innovations that extend the reach, usage and governance of financial services”.

Fintech is multiplying in Nigeria, with new financial technology solutions emerging at an unprecedented pace.

Nigerian governments acknowledge that Fintech is crucial to achieving the revised National Financial Inclusion Strategy 2018.

Business Day reports that Nigeria aims to attain 95% financial inclusion next calendar year, 2024.

Nigeria’s 95% financial inclusion target seems over-ambitious in view of the estimated 64% financial inclusion in 2022.

Remember that adult Nigerians with access to payment services in 2010 stood at a little low of 21.6%. In 2010, Nigerian government announced its desire to mop it up to 70% in 2020.

As Fintech firms grow and become more complex, ensuring that their Boards of Directors are effective in their oversight, risk, strategy and governance responsibilities is essential.

Here, we examine the importance of board effectiveness in Fintech in Nigeria beyond just box-ticking.

Why the Board of Directors

The Banking and Other Financial Institutions Act (BOFIA) 2020 excluded the provisions of the Companies and Allied Matters Act (CAMA) 2020 to the CBN-supervised and regulated financial services market.

Relevant regulatory frameworks for Board of Directors of Fintech firms include:

  • BOFIA 2020[1]
  • Code of Corporate Governance for Banks and Discount Houses in Nigeria 2014[2]
  • Guidelines for Whistleblowing in the Nigerian Banking Industry 2014[3]
  • Revised Assessment Criteria for Approved Persons’ Regime for Financial Institutions[4]
  • National Fintech Strategy 2022[5] and
  • National Financial Inclusion Strategy 2022[6]

Regulatory Framework for Board Governance for Fintech

The CBN – an exclusive regulator of Nigeria’s financial technology services – ensures board governance for Fintech in Nigeria.

However, the CBN’s regulatory guidelines and extant legislation on board effectiveness do not specifically apply to Fintech.

The Revised Assessment Criteria for Approved Persons’ Regime for Financial Institutions applies to other financial institutions under the purview of the CBN[7].

Section 6.0 of the Revised Assessment Criteria for Approved Persons’ Regime for Financial Institutions did not name Fintech among Other Financial Institutions. Neither did the Code of Corporate Governance for Banks and Discount Houses in Nigeria.

We submit that Fintech in Nigeria can apply the principles in all the CBN’s regulatory regimes for the board of directors in Nigeria’s banking sector.

Fintech in Nigeria will benefit from the “Apply-and-Explain” principle in the Nigerian Code of Corporate Governance 2018.

Board Effectiveness in Fintech

Some Fintech founders adopt a box-ticking approach to forming their board of directors – they consider the board an unavoidable regulatory or governance burden.

Other Fintech founders think board effectiveness is critical to the growth of any well-governed brand – the latter budgets for board training and appraisal.

Fintech founders who express a box-ticking attitude think a Startup should constitute a functional board post-pre-seed investment rather than earlier.

Such Fintech founders consider investor readiness a stage in the entrepreneurial journey rather than a way of doing things.

EY argues that the proper framework can help boards effectively fulfil their oversight role, position their companies for strategic success and drive long-term value.

EY thinks a vital mission, transparent engagement model, and good information practices are foundational pillars of board effectiveness. Boards that strive for effective composition, operations, dynamics, decision-making, and evaluations can achieve effective governance [8].

The following functional criteria underpin an effective board of directors for Fintech:

  • Board structure and composition
  • Board leadership
  • Roles and responsibilities
  • Transparent relationships
  • Board training and appraisal
  • Board audit

We have seen situations where the management led by the CEO (chief executive officer) presides at board meetings – that management scheduled.

The board chairperson should be available and committed to board effectiveness. The board chairperson should avoid participating in board meetings through an alternate director.

Fintech should vehemently apply the CBN’s revised assessment criteria for approved persons’ regimes for financial institutions together with the principles in the Code of Corporate Governance for Banks.

Without a functional whistleblowing policy for officers, including the board members, management, employees, and agents such as vendors and consultants, governance efforts and branding may become a sorry sight.

Fintech should implement the principles in the CBN’s whistleblowing guidelines. We recommend that you outsource the management of the whistleblowing process to ensure transparency and accountability – the board should enjoy a direct reporting line.

Board Structure and Effectiveness

Board balance will ensure that at least one independent director is a point of contact for shareholders’ grievances.

Independent directors affect the balance of interests in the board’s deliberations and resolutions.

Generally, the board includes a board chairperson, the CEO and one other from management, independent directors, and non-executive directors – a minimum of six directors.

The board should have a minimum of two board committees, defined tenure and a clear remuneration policy.

A Fintech board should have diverse skills and experience. Such skills include finance, technology, design thinking, products, consumers and organizational behaviour, and legal expertise.

Such diversity will ensure that the board can effectively oversee Fintech’s strategy, risk, operations, and compliance with regulatory requirements.

Beyond Box-ticking

Effective board governance in Fintech goes beyond just ticking the boxes of compliance requirements. Instead, it requires the board to actively provide strategic guidance and oversight to the Fintech.

The board must be proactive in identifying potential risks and opportunities. The board must understand the Fintech’s long-term goals and ensure its operations aligned with its mission and vision statements.

A passive and an ineffectual board harm the management’s best effort. Through its relevant committees, the board should actively engage with the management to ensure that Fintech operates effectively and efficiently.

Through regular meetings with senior management, reviewing and approving significant decisions, and monitoring Fintech’s performance through monthly reports circulated ahead of the quarterly meetings.

We know that the CBN requires the agenda for a Fintech board meeting to include reports on risk and fraud.


A board’s effectiveness is essential for the growth and success of Fintech in Nigeria. With Fintech multiplying in the country, it is necessary to ensure that Fintech’s boards of directors are effective in their oversight, risk management, strategy, and governance responsibilities.

While the regulatory framework for board governance in Fintech in Nigeria is not explicitly defined, non-bank Fintech companies can apply the principles of the regulatory guidelines for the Other financial institutions in Nigeria.

Given the status of a Fintech as Other Financial Institutions under BOFIA 2022.

Functional criteria for an effective board of directors include board structure and composition, board leadership, roles and responsibilities, transparent relationships, and board training, audit and appraisal.

By implementing these principles, Fintech in Nigeria can achieve effective governance and position their brands for strategic success and long-term value.

Ultimately, board effectiveness goes beyond box-ticking and is a crucial component of investor readiness necessary to achieve Nigeria’s ambitious 95% national financial inclusion strategy in 2024.

[1] Access on 15th September 2021

[2]  Access on 6th August 2021

[3] Access on 15th September 2021

[4] Access on 10th January 2022

[5] Accessed on 19th April 2023


[6] Accessed on 19th April 2023

[7] Section 1.2, page 4, Revised Assessment Criteria for Approved Persons’ Regime for Financial Institutions

[8] How to achieve enduring board effectiveness <,evaluations%20can%20achieve%20effective%20governance> access on 18th April 2023

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