During a recent keynote address at the FintechNGR Conference in Lagos, Dr. Emomotimi Agama, the Director General of the Securities and Exchange Commission (SEC), discussed the pivotal role of smart regulation in driving inclusive growth within the financial sector. He highlighted that such regulation fosters transparency, safeguards investors, and maintains financial stability in an ever-evolving market.
“Smart regulation is an innovative approach that achieves a balance between oversight and flexibility,” Agama noted. “It ensures fintech innovations meet critical standards for security, consumer protection, and market integrity, while also allowing room for experimentation and growth.”
Dr. Agama introduced the SEC’s new Regulatory Incubation (RI) Programme, designed to give fintech companies a controlled environment to test their business models prior to a full launch. “This initiative fosters innovation within a protective framework that benefits the entire financial ecosystem. We’ve already witnessed promising outcomes from this program, with several approvals granted and more pending review,” he shared.
He elaborated on the SEC’s three-pronged strategy for regulating innovation in Nigeria’s capital market, which emphasizes safety, market expansion, and problem-solving. “This proactive approach enhances regulatory compliance, boosts stakeholder confidence, and creates value for innovators seeking legitimacy,” Agama emphasized.
Collaboration with other regulatory bodies is also a major focus for the SEC. “By working closely with the Central Bank of Nigeria, the Financial Services Regulatory Coordinating Committee, and international organizations such as the International Organization of Securities Commissions (IOSCO), we’re cultivating a cohesive regulatory atmosphere that encourages fintech advancements,” he explained.
Agama expressed optimism regarding fintech’s potential to transform the landscape in Africa, particularly in tackling ongoing issues like financial exclusion and limited credit access. “Effective regulation isn’t solely about enforcement; it’s about fostering an environment where innovation can flourish while protecting the interests of all stakeholders,” he stated.
He added, “The SEC believes that transforming Nigeria into a smart financial hub depends on creating a regulatory environment that promotes innovative tech applications. The Investments and Securities Act (ISA) clearly outlines our dual mandate: regulating and developing the capital market.”
According to Agama, the synergy between fintech and smart regulation can significantly enhance Africa’s fintech ecosystem, paving the way for swift and inclusive growth. “Fintech is emerging as a solution, providing services that are accessible and cost-effective. Innovations such as mobile payments, peer-to-peer lending, and digital currencies are driving financial inclusion like never before, enabling individuals, small businesses, and underserved communities to participate in the financial system and ultimately contributing to broader economic growth.”
He noted the substantial contribution of financial services to Nigeria’s economy, revealing that they have averaged an impressive 56% of the country’s GDP since 2023, with growth rates hovering around 30% during that period.
While acknowledging fintech’s vast potential, Agama cautioned against the inherent regulatory risks, particularly regarding investor data privacy and cybersecurity challenges. “We must remain vigilant, as companies leveraging fintech to raise public funds without regulatory approval might expose investors to fraud, infringing upon our fundamental investor protection mandate.”
Agama asserted that the successful promotion of inclusive growth through fintech fundamentally hinges on a supportive regulatory environment. “Regulation is key to ensuring that fintech solutions are safe, sustainable, and beneficial for all users,” he affirmed.
He urged governments to bolster fintech initiatives through the development of digital infrastructure, public-private partnerships, and educational programs aimed at enhancing digital skills. He also encouraged fintech innovators to continue developing solutions that address Africa’s specific challenges, particularly in financial inclusion and access to capital.
In his closing remarks, Agama reiterated the SEC’s commitment to nurturing a resilient and inclusive financial system. “Together, we can cultivate a fintech ecosystem that drives economic growth, mitigates inequality, and ensures prosperity for everyone,” he concluded.
