The Central Bank of Nigeria (CBN) has lifted its six-week suspension on onboarding new customers for five leading fintech companies: Paga, OPay, Kuda, Palmpay, and Moniepoint. This decision marks the end of a challenging period for these startups, which saw significant disruptions in their growth trajectories.
The suspension, which began on April 29, 2024, followed the blocking of over 1,000 accounts involved in peer-to-peer cryptocurrency trading. The National Security Adviser (NSA) had labeled cryptocurrency a security threat, pushing for enhanced Know Your Customer (KYC) protocols and stricter fraud prevention measures from the fintech firms to curb crypto transactions.
By May 20, 2024, the affected fintechs received a set of compliance requirements to lift the onboarding freeze. These included the cessation of P2P crypto transfers, mandatory physical address verification for all account tiers, and improved facial verification processes.
Although fintech companies have faced heavy criticism for perceived lax KYC practices leading to fraud, industry reports indicate that fraud prevention is a broader issue across the financial sector.
Despite the challenges, today’s decision to lift the ban is a welcome relief for the fintech startups, allowing them to resume onboarding new customers and continue their growth after weeks of stagnation.
