How to register a FinTech Company in Nigeria – For several reasons, Africa and Nigeria still have lots of unbanked population (approximately 36%). Considering the size of our population, we can easily deduce that this is a huge figure. While it is arguable that our present economic situation as a country contributed to the large number of unbanked population, the hitherto rigid banking system practised in Nigeria also plays a large role.

With change being the only constant phenomenon, the introduction of FinTech and its continued adoption disrupted the modus operandi of financial transaction across all strata of the Nigerian economy. Of course, FinTech met initial resistance from the Nigerian populace due to our conservative nature and scepticism about online payment. From the recent increase in the number of FinTech companies emerging in Nigeria, it is easy for us to confirm that the narration has changed. More people are now willing to use FinTech firms for:

• Retail Banking
• Lending and Borrowing
• Investment Management
• Fundraising
• Payment
• And many other finance-related activities.

With the recent realization that FinTech firms are here to ease the stress of financial transaction, it is expected that the volume of people making financial transactions via FinTech channels will increase. To benefit from the surge in patronage, below are the steps you must take as an entrepreneur or tech enthusiast.

REGISTRATION WITH CORPORATE AFFAIRS COMMISSION

For a firm to be regarded as a legal entity, it has to register with the Corporate Affairs Commission (CAC). The same applies to aspiring FinTech firms intending to serve the populace. The following are the procedures in brief:

• A check for the availability of the proposed name and its reservation if available.
• Once the proposed name is available, you can acquire the application form and provide the following:
  • The official address of the company
  • The authorized capital of the company (See the CBN regulation below)
  • Particulars of two directors and shareholders
  • A Companies and Allied Matters Act (CAMA) signed declaration under the supervision of a legal practitioner.
• The second phase of the registration shall require:
  • The provision of a signed and stamped copy of the Memorandum and Articles of Association.
  • The assistance of a legal practitioner.

Once you have successfully registered your company name with the CAC, your company is legally qualified to obtain an operating licence from the appropriate authority. In Nigeria, this authority is the Central Bank of Nigeria (CBN) and its associates (where necessary). The CBN is the main regulatory body overseeing all financial activities executed in the Nigerian geographical space. As such, an operating license can only be procured from the CBN. This license is categorized into three:

–              SUPER LICENSE:

The license type under this category is as follows:

• Account opening
• BVN capture
• Bill payments to the banked and unbanked
• Super Agency
• Switching
• Payment Service Solution Provider(PSSP)
• Payment Terminal Service Provider (PTSP)

The minimum shareholder fund for this category is Five billion naira (5,000,000,000). To apply, you will make a one-time payment of Two Million Naira (2,000,000) and a renewal fee (every three years) of One Million Naira (1,000,000).

–              STANDARD LICENSE:

The license type under this category is as follows:

• Mobile money operation
• Super Agency
• Non-banking merchant acquiring

The minimum shareholder fund for this category is Three Billion Naira (N3,000,000,000). To apply, you will make a one-time payment of One Million Naira (N1,000,000) and a renewal fee (every three years) of Five Hundred Thousand Naira (N500,000).

BASIC LICENSE:

The license type under this category is as follows:

• Super Agency
• Payment Service Solution Provider(PSSP)
• Payment Terminal Service Provider (PTSP)

The minimum shareholder fund for this category is Fifty Million Naira (N50,000,000). To apply, you will make a one-time payment of One Hundred Thousand Naira (N100,000) and a renewal fee (every two years) of Fifty Thousand Naira (N50,000).

The Nigerian law allows FinTech start-ups to enter into a practising agreement with licensed FinTech firms as long as the conditions are mutually agreed upon by both parties. In order words, a license can be used by two or more FinTech firms.

From the above, we can easily deduce that the main regulatory body is the Central bank of Nigeria. The CBN has detailed guidelines on:

• Mobile Money Services in Nigeria
• Operation of Electronic Payment Channels in Nigeria
• The Use of USSD framework for financial services
• International Money Transfer Service
• International Mobile money remittance service
• The direct debit scheme in Nigeria.

FinTech firms intending to use the USSD service for transactions shall also be required to register and adhere to the regulations of the Nigerian Communications Commission (NCC).

Please be informed that the above is meant to inform you about the registration requirements for FinTech firms. For an exclusive elucidation and a step-by-step guide, we will advise that you see a FinTech Developer or  finance law expert.