The Central Bank of Nigeria (CBN) has expressed concerns regarding the increasing prevalence of "pay small small" schemes provided by non-bank entities to extend credit to consumers. This issue was highlighted by CBN Governor Olayemi Cardoso at the Nigeria Fintech Week 2026 in Lagos.
Cardoso noted that the rise of embedded finance, where non-bank companies leverage customer data to offer financial products, poses significant regulatory challenges. He cited examples from companies like Air Peace and Wakanow, which allow customers to pay for services in instalments.
Regulatory Challenges
As non-bank businesses begin to offer credit without proper licensing, the CBN is faced with the dilemma of how to regulate these practices. Cardoso emphasized the need for a framework to address the complexities of these arrangements.
Consumer Protection Issues
Cardoso also raised concerns about consumer protection, stating that customers may struggle to find recourse if their rights are violated in transactions with unlicensed entities. This gap in regulation could leave consumers vulnerable.
The CBN's scrutiny comes as Nigeria's Buy Now, Pay Later market is projected to grow significantly, with over 400 digital lenders currently operating. As regulation tightens, the CBN and other regulatory bodies are working to ensure consumer protection and fair lending practices in this evolving financial landscape.