In order to encourage innovation in the payment system, the Central Bank of Nigeria (CBN) is putting in place a collateral management regime (CMR) to regulate the activities of fintech firms and startups in the country.
The director of Payments System Management Department (PSMD), Sam Okojere, who represented the CBN Governor, Godwin Emefiele, said in his keynote address at the inaugural Lagos Fintech Week in Lagos, that, “the CMR is being developed in line with on-going efforts to evolve a robust collateral management regime which will be proportionate to transactional level of participants within the payment system”. According to Okojere, the consequences of the new regime are that both incumbents and new entrants will operate without unnecessary collateral burden.
A fintech lawyer and partner, Private Equity Capital at the chambers of Aluko & Oyebode, Oludare Sembore who also spoke at the event said in a statement: “The Nigerian approach to fintech regulation is somewhat similar to the United States and South Africa. Fintech in these countries are not governed by any specific legal framework, as the regulators are currently taking steps to understand the concept”.
He added that the current fintech landscape in Nigeria is largely regulated by circulars and guidelines published by the CBN and a host of existing regulations that apply to “traditional financial service institutions.”