Fintechs ask CBN for growth fund, regulator says it can only play matchmaker

Fintech operators are pushing for a dedicated growth fund or credit guarantee scheme to unlock capital for innovation and expansion, but the Central Bank of Nigeria (CBN) says it cannot directly establish venture-style financing.

The regulator disclosed this in its latest fintech sector report, which drew on a quantitative survey of leading fintech executives, a closed-door stakeholder workshop held in June 2025, and the CBN fintech roundtable convened in October 2025.

The CBNdescribed the process as part of sustained engagement with a sector it is seeking to build a bridge with.

Access to finance emerged as one of the biggest constraints on fintech growth, with many stakeholders describing fundraising within Nigeria as difficult or very difficult. 

Executives cited macroeconomic volatility, regulatory delays affecting foreign direct investment approvals, and currency risk as factors that have made both local and offshore capital harder to secure.

The slowdown is reflected in deal flow. Startup funding to Nigeria fell by 17% to $343 million in 2025. In response, 87.5% of fintech executives supported the creation of a fintech-specific growth fund or credit guarantee scheme to help startups access longer-term funding at a time when equity cheques are shrinking.

The CBN has previously run targeted financing schemes for sectors it considers strategic to the economy, particularly agriculture. 

Its most prominent intervention, the Anchor Borrowers Programme (ABP), was launched on November 17, 2015, to improve financing for smallholder farmers and boost food production.

As of 2023, the CBN had disbursed ₦1.1 trillion ($809.85 million) through the scheme before discontinuing it, saying it would refocus on its core monetary policy responsibilities.

However, ABP also became a cautionary tale. The programme was plagued by allegations of weak monitoring and poor repayment enforcement, with claims that some beneficiaries treated the loans as gifts, leading to high default rates. 

An auditor general’s report showed that the CBN has yet to recover ₦629.04 billion ($463.12 million), raising questions about how far the regulator should go in acting as a lender of last resort for private sector expansion.

In its fintech report, the CBN drew a clear line, saying it cannot directly create venture funds. However,  it said it can play a convening role by bringing together development finance institutions and private capital providers to structure blended finance, credit guarantees, or risk-sharing models through partners such as the Development Bank of Nigeria (DBN) and InfraCredit. The bank said these options align with its Payments System Vision 2025 (PSV2025).

Despite the CBN distancing itself from direct funding, government-backed capital may begin to play a bigger role in Nigeria’s venture market.

Nigeria launched Investment in Digital and Creative Enterprises (iDICE) in 2023 with $617.7 million in funding to promote investment in the country’s digital and creative sectors. 

The programme is backed by the Federal Government of Nigeria, through the Bank of Industry, as well as the African Development Bank (AfDB), Agence Française de Développement (AFD), and the Islamic Development Bank (IsDB).

In November 2025, iDICE participated in Ventures Platform’s $64 million fundraise, one of Africa’s most active seed-stage funds, in a deal that signalled a stronger appetite for institutional funding targeted at early-stage innovation. Nigeria’s Startup Act also provides for a government-backed seed fund of up to ₦10 billion ($7.36 million).

Beyond calls for a fintech growth fund, stakeholders also proposed measures to improve liquidity, including the creation of a secondary market for fintech debt instruments. The CBN noted that the proposal aligns with broader efforts to deepen domestic capital markets and reduce concentration risk.

Fintech stakeholders noted that stronger international visibility of Nigeria’s regulatory progress, including improvements in anti-money laundering (AML) enforcement and the country’s exit from the Financial Action Task Force (FATF) grey list, would contribute to improved external risk perceptions and support the mobilisation of long-term investment.

In October 2025, Nigeria was removed from the FATF grey list, potentially easing cross-border transactions and unlocking new remittance flows and foreign investment.

Nigeria was added to the grey list in February 2023, a move that rattled investor confidence and raised compliance costs for cross-border transactions. “It will ease cross-border transactions, improve capital flows, including foreign direct investment,” Finance Minister Wale Edun said in October 2025.

The CBN said it plans to leverage development partners to align donor programming and technical assistance with nationally -defined fintech priorities.

“Opportunities include co-financing infrastructure pilots, supporting regulatory capacity, and investing in digital public goods,” the regulator said.