CBN raises regulatory questions over non-banks offering instalment credit

The Central Bank of Nigeria (CBN) has expressed concerns over the increasing use of "pay small small" schemes by non-bank businesses to offer credit to consumers. At Nigeria Fintech Week 2026 in Lagos, CBN Governor Olayemi Cardoso, accompanied by Abiodun Olalekan Okunola, Head of the Innovation Management Division at the CBN, addressed the issue during a presentation.

Cardoso highlighted that the growing adoption of embedded finance, where non-bank enterprises provide financial services to their clients, poses regulatory challenges, especially when unlicensed companies offer installment payment options for their products. He pointed out that businesses are increasingly leveraging customer data to offer financial products, with examples such as Air Peace and Wakanow offering customers the option to pay for services in installments.

The Governor emphasized that these arrangements raise questions about how the CBN should regulate non-bank entities providing credit. Additionally, Cardoso noted that such practices have implications for consumers who may face difficulties in seeking redress if their rights are violated in transactions involving unlicensed non-bank businesses.

He stated that embedded finance is one among several changes reshaping Nigeria's financial landscape, alongside artificial intelligence, open banking, digital currency, and cross-border commerce. Buy Now, Pay Later schemes are also gaining prominence in Nigeria's consumer-credit market. Furthermore, Cardoso mentioned that the regulation of digital credit has become more stringent.

According to Nairametrics, as of September 2026, 525 digital lenders were registered with the Federal Competition and Consumer Protection Commission (FCCPC), while 33 lenders operated under waivers due to their pre-existing CBN licenses. The FCCPC has been enforcing rules pertaining to consumer protection, lending practices, and debt recovery.