Introduction

The mining industry in Nigeria is a significant contributor to the country’s GDP, with various players operating in this space. To engage in any mineral resource activities, companies or individuals must obtain the proper licenses and permits from the government. 

Meaning of Mining License

A mining license is an official document or certificate granted by a government agency that allows a company or individual to engage in mining activities such as extracting, processing, and trading mineral resources.

The mining license specifies the minerals, geographic area, and duration for which the holder is permitted to perform mining operations.

Legal and Regulatory Framework of Mining in Nigeria

The primary legislation regulating mining in Nigeria include the Nigerian Minerals and Mining Act 2007, National Minerals and Metals Policy 2008, and Nigerian Minerals and Mining Regulations 2011.

Other legislations that are important in the regulation of the mineral mining industry include the Nigerian Investment Promotion Commission (NIPC) Act1, the Companies and Allied Matters Act, 2020, the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, and tax laws.

The regulatory bodies are the Ministry of Mines and Steel Development (MMSD) and the Mining Cadastre Office (MCO). Engaging in any mineral resource activities without the proper licenses is considered an offense in Nigeria.

Types of mining licenses

There are various types of mining licenses, such as Exploration License, Mining Lease, Small Scale Mining Lease, Possess or Purchase License, Mineral Buying Center License, and Mineral Export Permit, each with their own set of requirements.

Exploration License

The Exploration License is the first step in the process of obtaining mining rights in Nigeria. It grants the holder the right to explore and assess the viability of mineral deposits within a specified area. It is valid for an initial period and can be renewed based on performance.

Once the exploration phase is successful and the presence of commercially viable mineral deposits is established, the holder of the Exploration License can then apply for an Exclusive Prospecting License (EPL) and eventually a Mining Lease.

The key requirements for obtaining an Exploration License in Nigeria are:

Certified true copy of company certificate and other incorporation documents

• Completed application forms
• Pre-Feasibility Report
• Prospecting plan
• Payment of processing fee
• Evidence of financial capability
• Evidence of technical competence or COMEG accredited geologist
• Irrevocable consent from the landowner(s) and/or occupier(s) to the applicant
• Attestation of non-conviction of criminal offences under the Act by a Lawyer

Mining Lease

A mining lease is awarded for a surface area without a prior exploration license or small-scale mining lease, unless the applicant already has one over the same region. The lease is for a maximum of 50km². The mining lease grants the holder the exclusive right to use and extract minerals within the lease area. The mining lease holder has the right to market, sell, export, and dispose of mineral products produced during mining activities. Mining leases are awarded for 25 years and renewed every 24 years, provided certain conditions are met.

The key requirements for obtaining a Mining Lease in Nigeria:

1. The applicant must be a holder of a valid Exploration License, which allows them to explore and assess the viability of mineral deposits within a stated area.

2. The following documents must be submitted by the applicant:

• Certified true copy of company incorporation documents
• Completed application forms
• Pre-Feasibility Report
• Prospecting plan
• Payment of processing fee
• Evidence of financial capability
• Evidence of technical competence or COMEG accredited geologist
• Irrevocable consent from the landowner(s) and/or occupier(s)
• Attestation of non-conviction of criminal offences under the Act by a Lawyer

3. The applicant must show that a commercial quantity of mineral resources exists in the region for which the lease is requested.

4. The applicant must have met all of the conditions of the Exploration License for the area in question.

5. The applicant must give proof of sufficient operating capital for the proposed mining operations and demonstrate technical competence in carrying out the proposed mining activities.

Small Scale Mining Lease

The small-scale mining lease has a smaller geographic area and is intended for artisanal, alluvial, and other small-scale mining operations. The license is valid for 5 years and can be renewed for up to 5 more years.

The key requirements for obtaining a Small-Scale Mining Lease (SSML) in Nigeria are:

1. The applicant must be a Nigerian citizen or a company incorporated in Nigeria.

2. The proposed mining area must not exceed 3 km2 (15 cadastral units).

3. The applicant must submit the following documents:

• Completed application forms
• Certificate of incorporation and other company documents
• Evidence of technical competence, such as a COMEG accredited geologist
• Evidence of financial capability to carry out the proposed mining operations
• Irrevocable consent from the landowner(s) and/or occupier(s)
• Attestation of non-conviction for criminal offenses under the Act

4. The applicant must demonstrate that the proposed mining operations will be conducted using low-level technology and methods that do not require substantial capital expenditure.

5. The applicant must pay the prescribed application and processing fees.

Possess or Purchase License

The Possess or Purchase License is required for companies seeking to deal in mineral resources. This license enables an entity that does not own or possess a mining lease to operate directly in mineral trading or exporting. The license is valid for one year and can be renewed.

The key requirements for obtaining Possess or Purchase License include:

• Certificate of incorporation and other company documents
• Application letter stating the minerals to be possessed or purchased
• Evidence of a technically competent person like a geologist with COMEG accreditation
• Tax clearance certificate
• Attestation of non-conviction for a criminal offense by a Legal Practitioner
• Banker’s reference letter
• Letter of consent from a mineral title holder
• Payment of the prescribed fees

Mineral Buying Centre License

The Mineral Buying Centre License is specifically authorises the holder to operate a facility for processing, warehousing, and trading of mineral resources. 

The key requirements for obtaining a Mineral Buying Centre License (MBC) in Nigeria are:

1. The applicant must be a company incorporated in Nigeria. Foreign companies must incorporate a local Nigerian subsidiary to be eligible.

2. The applicant must have an established warehouse facility that will be used to process, store, or trade mineral resources. This warehouse facility will be inspected as part of the application process.

3. The applicant must submit similar documents as required for the Possess or Purchase License, including:

• Certificate of incorporation and other company documents
• Application letter stating the minerals to be traded
• Tax clearance certificate
• Attestation of non-conviction for a criminal offense
• Banker’s reference letter
• Letter of consent from a mineral title holder

4. The applicant must demonstrate technical competence, such as having a geologist with COMEG accreditation on staff.

5. The applicant must pay the prescribed application fees for the Mineral Buying Centre License.

Mineral Export Permit

The Mineral Export Permit is issued by the Ministry of Mines and Steel Development and is required each time mineral resources are to be exported out of Nigeria. This permit ensures compliance with export regulations and facilitates the legal exportation of minerals.

The key requirements for obtaining a Mineral Export Permit in Nigeria are:

1. Possess or Purchase License:

• The applicant must already hold a valid Possess or Purchase License, which allows them to deal in the specific mineral resources they want to export.

2. Export Certificate:

• The applicant must obtain an Export Certificate from the Ministry of Mines and Steel Development, which certifies the mineral resources are legally sourced and ready for export.

3. Evidence of Royalty Payment:

• The applicant must provide proof that the required royalties have been paid to the government for the mineral resources being exported.

4. Prescribed Fees:

• The applicant must pay the prescribed fees set by the government for the Mineral Export Permit.

Incentives available for participants in the Nigerian Mining Industry

The incentives provided by the Nigerian government to support the mining industry include:

• Allow for a 75% depreciation or capital allowance on verified true capital expenditure in the first year of investment and 50% in subsequent years.
• There is a 5% investment allowance and the ability to capitalize any prospecting expenses.
• Approved plant, machinery, equipment, and accessories imported for mining activities are exempt from customs and import charges.
•  Approved expatriate personnel of the operation are exempt from expat quotas and residency permits.
• Expatriate personnel have a personal remittance quota and are not subject to any taxation for transferring foreign currency out of Nigeria.
• Tax exemption for the first three years of operation. The minister might extend the period for another two years if the operator meets certain conditions.
• Foreign investors are protected from nationalization and expropriation of their mining titles, unless the acquisition was conducted in the national interest or for public purpose and under a legislation that includes compensation and access to court.

Conclusion

In Nigeria, it is illegal to engage in any mineral resource operations without the required license. It is strongly encouraged to consult with a legal professional to ensure that the application procedure is completed correctly and that all regulatory criteria are met. This is important in order to prevent any legal concerns or penalties for operating without the proper licenses in Nigeria’s mining industry.

By Adeola Oyinlade & Co.

Adeola Oyinlade & Co.; a leading full-service law firm in Nigeria provides help and offers advisory to both local and foreign clients in the Nigerian mining sector. 

Need help? Kindly contact us using the details below:

Email: [email protected]

Mobile: +234 803 826 7683 / +234 802 686 0247

Introduction

Repatriation is the process of returning people, money, or heritage items to their home country or culture. In the financial sector, repatriation refers to the conversion or exchange of foreign currency into one’s native currency. Repatriation occurs when a taxpaying entity returns money generated abroad to its home nation. 

This can apply to a firm that earns money through a foreign subsidiary or an individual who has investments, earned income, or money gained while traveling overseas. Foreign investors in Nigeria need guarantee that their funds can be easily repatriated at any time. This article offers assistance for foreign investors seeking to repatriate funds in Nigeria.

Legal Framework Governing Repatriation of Funds in Nigeria

1. Foreign Exchange (Monitoring and Miscellaneous Provisions) Act: This act regulates foreign exchange transactions in Nigeria and outlines the procedures for repatriating funds. It ensures that foreign investors can freely transfer their capital and profits, provided they comply with the established guidelines.

2. Nigerian Investment Promotion Commission (NIPC) Act: The NIPC Act promotes and protects foreign investments in Nigeria. It guarantees the right of foreign investors to repatriate their capital and profits, enhancing investor confidence.

3. Central Bank of Nigeria (CBN) Regulations: The CBN oversees the foreign exchange market and regulates the repatriation process. It has established guidelines that banks must follow when processing requests for capital outflows, ensuring compliance with monetary policies and foreign exchange controls.

Procedures for Repatriation of Funds from Nigeria by Foreign Investors

Foreign investors looking to repatriate capital and profits from Nigeria must adhere to specific procedures governed by Nigerian law. 

Here is a detailed overview of the process:

1. Obtain a Certificate of Capital Importation (CCI)

The CCI is a document issued by an authorized dealer (usually a Nigerian commercial bank) on behalf of the Central Bank of Nigeria. It serves as proof that foreign capital has been brought into Nigeria for investment purposes.

Requirements for Obtaining a CCI

• Capital Inflow: The capital must be imported into Nigeria in the form of cash, debt, equity, or goods. This includes cash investments, loans, purchase of equipment or raw materials.
• Authorised Dealer: The CCI must be obtained from an authorized dealer, which is a commercial bank operating in Nigeria. The bank is required to issue the CCI within 24 hours of the capital inflow.
• Documentation: The following documents are required to obtain a CCI:
• Application Letter: A formal request for the issuance of the CCI.
• Board Resolution: A resolution from the investor’s board authorising the investment.
• Certificate of Incorporation: Proof of the investor’s registration in Nigeria.
• Evidence of Capital Importation: This could be a telegraphic transfer receipt, bank statements, or other proof of the capital being brought into Nigeria.
• Filing with the CBN: The authorised dealer must file returns with the Central Bank of Nigeria within 48 hours of issuing the CCI.
• Electronic Certificates of Capital Importation (e-CCI): The CBN has introduced e-CCIs to streamline the process of capital importation and repatriation. These electronic certificates are managed through an online platform, reducing the risk of loss or misplacement of documents.

Once the CCI is obtained, the investor can proceed with the repatriation of funds. The process includes:

• Tax Compliance: Ensure all applicable taxes (e.g., withholding tax on dividends) are paid. A tax clearance certificate may be required for the repatriation of profits.

• Request for Repatriation: Investors must submit a request to the authorised dealer for the transfer of funds, accompanied by the CCI and any other required documentation.

• Currency Conversion: The repatriation can be done in any convertible currency, as long as the investment was documented under a CCI.

The following can be repatriated without hindrance:

• Dividends, Rent, Royalties, Profits (net of taxes) attributable to the investment. Dividend payments are subject to withholding tax at 10% as final tax (7.5% for qualifying recipients in a treaty country).
• Payment of interest and capital on foreign loans. A tax clearance certificate is required to remit dividend and interest out of the country.
• The remittance of proceeds (net of taxes) and other obligations in the event of a sale or liquidation of the enterprise or any interest attributable to the investment.

There is currently no limit on profits that can be distributed as dividends, as long as they come from profits rather than capital and there are no reasonable grounds to believe that the company is or will be insolvent after the payment.

2. Use of Technology Transfer Agreements (TTA)

Foreign investors can also repatriate funds through TTAs, which involve the transfer of technology, trademarks, or technical expertise to a Nigerian company. To repatriate funds from Nigeria through a Technology Transfer Agreement, foreign investors must follow specific requirements and provide necessary documents to the National Office for Technology Acquisition and Promotion (NOTAP). 

Here are the steps:

The TTA must be registered with the National Office for Technology Acquisition and Promotion (NOTAP)

Requirements for Registering a TTA with NOTAP

• The purpose of the TTA must be for the use of trademarks, patented inventions, supply of technical expertise, basic/detailed engineering, machinery and plant, operating staff or managerial assistance, and training of personnel.
• The TTA should include provisions that give the Nigerian recipient explicit rights to use and exploit the technology, including the duration.
• Capacity building must be included, with details of Nigerians understudying the experts.
• The TTA should make provision for deduction of appropriate local taxes.
• Research carried out should be incorporated in the agreement.
• The scope of services and the services to be rendered by the transferor should be clearly stated.
• The TTA should state the methods for the domestication of technology, local raw material development, and skills acquisition.

Required Documents for Registering a TTA

• Completed Application Form, NOTAP Questionnaire, and TAA Pre-Qualification Form
• Draft Copy of the Technology Transfer Agreement to be Registered
• Company’s Memorandum and Article of Association
• Certificate of Incorporation
• Annual Report
• Tax Clearance Certificate and Tax Identification Number (TIN)
• Engineering Drawings, Feasibility Study, Report where applicable
• Approval/Licenses Obtained from Appropriate Authorities and Bodies
• Transferor/Licensor Profile

Once the TTA is registered with NOTAP and all applicable taxes are paid, the foreign investor can repatriate funds through the authorised dealer that issued the Certificate of Capital Importation (CCI) for the investment. The CCI serves as proof of the capital inflow and enables unrestricted repatriation of profits and capital.

Conclusion:

The repatriation of funds and capital in Nigeria is facilitated through a structured process that includes obtaining a CCI, ensuring tax compliance, and possibly utilising technology transfer agreements. The legal framework, including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act and the NIPC Act, supports these processes, providing foreign investors with the assurance that they can freely transfer their investments and profits out of Nigeria.

By Adeola Oyinlade & Co.

Adeola Oyinlade & Co.; a leading full-service law firm in Nigeria provides help and offers advisory to both local and foreign clients on corporate and commercial law related matters in Nigeria. 

Need help? Kindly contact us using the details below:

Email: [email protected]

Mobile: +234 803 826 7683 / +234 802 686 0247

International Money Transfer Operator (IMTO) License in Nigeria: Procedure and Requirements under the Updated Guidelines

Introduction

An International Money Transfer Operator (IMTO) is a Central Bank of Nigeria (CBN)-approved firm that facilitates the transfer of monies from persons or entities residing outside of Nigeria to Nigerian nationals. IMTOs are in charge of receiving funds from other countries and transferring it to Nigerian citizens.

The International Money Transfer Operator (IMTO) license is a necessary requirement for running a lawful money transfer business in Nigeria. To operate as an IMTO in Nigeria, a business must first get a CBN license by submitting an application to the Director of the Trade and Exchange Department. This article examines the procedure for obtaining an International Money Transfer Operator License in Nigeria.

Definition of International Money Transfer Operator

The Central bank of Nigeria Guidelines on International Money Transfer Services in Nigeria, 2024 defines International Money Transfer Operators as companies approved by the CBN to facilitate the transfer of funds from individuals or entities residing abroad to recipients in Nigeria, and the payment of a corresponding sum to a beneficiary through a clearing network to the IMTO belongs.

Requirements for obtaining an International Money Transfer Services in Nigeria

The application for approval to carry on business of international money transfer services shall be submitted to the Director, Trade and Exchange Department, Central Bank of Nigeria, Abuja.

No person or institution shall operate International Money Transfer Services unless such person/institution has been duly approved by the CBN.

Any financial product involving international money transfer by any person or institution that is not duly registered with the CBN is illegal.

The applicants must comply with the requirements of the CBN Guidelines for licensing of banks and other financial institutions in Nigeria on Anti money Laundering, Combating the financing of Terrorism and Countering Proliferation of weapons of Mass Destruction. 

The approval process shall be in two phases namely, Approval-in-Principle and Final Approval.

Documents Required by an International Money Transfer Operator (Approval-in-Principle)

Any International Money Transfer Operator willing to operate in Nigeria shall submit the following documents in support of the application to the Director, Trade and Exchange Department of the CBN:

• A non-refundable application fee of N10,000,000 (Ten Million Naira) or such other amount as may be specified by CBN from time to time, payable through electronic transfer or bank draft.

• Approval to operate in other jurisdictions or agency agreement (for all IMTOs)

• Evidence of tax clearance and incorporation documents in Nigeria (for indigenous IMTOs) to include Certified True Copy of MEMART, with the primary object clause indicating the provision of money transfer services

• The ownership structure of the IMTO

• Board of Directors approval to operate international money transfer service

• CAC Form C02 (Return of Shares) and C07 (Particulars of Directors)

• Profile of the company to include Curriculum vitae/bio data, contact and email address, telephone numbers of the Board and Management of the company.

• Information on the beneficial owners of the company (where applicable)

• Credit reports from a licensed credit bureau for the shareholders and key officers of the IMTO

• Minimum share capital of US$ 1 million for foreign IMTOs and the equivalent for indigenous IMTOs

• Any other information, document, or report as CBN may from time to time specify.

After complying with the above requirements and receiving favorable consideration, an IMTO can open a bank account and begin pre-operational processes. It’s important to note that the Approval-In-Principle application does not grant the IMTO the right to start operations, also Approval-in-Principle may be withdrawn if the IMTO does not meet with the requirements stated above.

Documents Required by an International Money Transfer Operator for Final Approval

The IMTO shall submit an application for final approval to CBN within three (3) months of receiving the Approval-In-Principle from CBN, subject to the following requirements:

• Names of authorised dealer bank(s) to serve as local agent(s) and copy of agency agreement

• Submission of a detailed business plan to the CBN which shall include:

1. Nature of the business
2. Internal control systems and monitoring procedures
3. Security features for IMTOs with offices in Nigeria
4. Three (3) years of financial projection/market analysis for the company
5. Transaction and other charges that will be borne by the customers
6. Diagrammatic illustration of transaction flows
7. Consumer protection and dispute resolution mechanisms
8. Information technology policy of the company including:

1. Privacy policy
2. Information ownership/disclosure/loss policy
3. Backup and restore policy
4. Network security policy
5. Encryption policy
6. Confidential data policy
7. Password policy
8. Third-party connection policy
9. Incidence response policy
10. Physical security policy

9. Enterprise risk management framework
10. Contingency and disaster recovery plan/business continuity plan
11. Draft agreements with the participating parties
12. Project deployment plan (time, location, operation, etc)
13. Any other information as may be required by CBN from time to time

Overseas partnership requirements 

An indigenous IMTO who wishes to engage a foreign technical partner shall obtain the prior approval of the CBN. The following conditions shall apply to the technical partner:

• The technical partner must be a registered entity, licensed in its home country to carry on money transfer activities.
• The overseas technical partner should be well established in the money transfer business, with a track record of operations. 
• Have a minimum net worth of US$1 million, as per the latest audited financial statement, or as may be determined by the CBN from time to time. 
• There should be a Memorandum of Understanding that clearly defines liabilities in the event of disputes and/or process failures. 
• The CBN will further conduct appropriate due diligence on the promoters, directors, and key officers of the proposed money transfer operator.

Annual Renewal of License

IMTOs must renew their licenses annually for an annual fee of N10,000,000 (Ten Million Naira), which must be paid by January 31 of each year. The renewal must also take place within the first quarter of the year.

Failure by an IMTO to provide a copy of the CBN renewal approval to its agent bank(s) within the first quarter of the year shall be grounds for such agent bank(s) to discontinue any further transactions with the IMTO concerned.

Permissible Activities of an IMTO License Holder

The permissible activities of international money transfer operator shall include inbound money transfer only. The transactions shall be limited to the following operations:

• The acceptance of money for the purpose of transmitting it to a person resident in Nigeria or another country. 

• Cross-border personal money transfer services, such as money transfer services for family maintenance and money transfer services in favour foreign tourists visiting Nigeria, shall be allowed under this arrangement.

• The money transfer services shall target individual customers and the transactions shall be on a “person to person”, “business to person“and business to business” transfer basis which may be reviewed by the CBN from time to time.

Non-Permissible Activities

The following activities are not permissible by IMTOs:

• An IMTO shall not engage in any other business other than those stipulated above.
• An IMTO shall not engage in any outbound transaction.
• Buy foreign exchange from the domestic foreign exchange market for settlement

Prohibition of Banks and Financial Technology Companies

All banks and financial technology firms are prohibited from becoming IMTOs. Banks may, however, act as IMTOS agents. Persons prohibited from working in banks under the BOFIA, 2020, are also prohibited from becoming IMTOs.

Conclusion

The International Money Transfer Operator license is indispensable for running a reputable money transfer business in Nigeria. It is issued by the Central Bank of Nigeria (CBN) to organisations requiring to provide cross-border money transfer services. 

To receive an IMTO license in Nigeria, an organization must submit an application to the Director of the CBN’s Trade and Exchange Department. Once the application is approved, the IMTO can open a bank account and commence pre-operational procedures.

However, the award of approval-in-principle does not authorise the IMTO to begin activities. IMTOs must follow the CBN’s requirements on anti-money laundering and combating terrorist financing. They must keep accurate records of all transactions, issue receipts to clients, and submit returns to the CBN. 

Obtaining an IMTO license increases money transfer operators’ credibility and trustworthiness, allowing them to participate in Nigeria’s enormous and developing remittance sector. The license signifies compliance with regulatory prerequisites, fosters openness, and instills trust in the security and dependability of the services offered.

By Adeola Oyinlade & Co.

Adeola Oyinlade & Co.; a leading full-service law firm in Nigeria provides help and offers advisory to both local and foreign clients on finance and banking related matters including how to process financial and banking licenses in Nigeria. 

Need help? Kindly contact us using the details below:

Email: [email protected]

Mobile: +234 803 826 7683 / +234 802 686 0247

Introduction

Telecommunication licenses are indispensable for any entity wishing to provide communication services in Nigeria. The NCC is responsible for issuing these licenses, ensuring that operators comply with legal and regulatory standards. The licensing framework is designed to promote fair competition, protect consumers, and enhance the quality of telecommunication services. This article summaries the procedure and requirements for obtaining a telecommunication license in Nigeria.

Meaning of Telecommunication License

A telecommunication license is a legal authorisation granted by the Nigerian Communications Commission (NCC) that permits individuals or companies to operate telecommunication services within Nigeria. The license is governed by the Nigerian Communications Act of 2003, which establishes the NCC as the regulatory authority responsible for overseeing the communications sector.

There are various types of licenses, including:

• Individual License: This is a type of approval in which the terms, conditions and obligations, scope and limitations are specific to the service being provided. The process of licensing can take the form of auctions, tenders, fixed prices or a standard administrative procedure, etc.

• Class License: This is a type of general approval in which the terms and conditions/obligations are common to all license holders. It requires only registration with the Commission for applicants to commence operation.

• Unified License: Allows the provision of multiple telecommunication services under one license.

• Value Added Service License: Permits the provision of additional services such as internet and content services, often relying on existing network infrastructure.

Importance of Telecommunication License

1. Legal Compliance: Operating without a license is illegal and may result in significant fines and penalties. The NCC requires that all telecommunication services be licensed to ensure adherence with national regulations.

2. Consumer Protection: Licensing helps safeguard consumer interests by ensuring that service providers meet certain standards and obligations, thereby enhancing service quality and reliability.

3. Market Regulation: Licenses enable the NCC to regulate the telecommunication market effectively, ensuring fair competition and preventing monopolistic practices.

4. Quality Assurance: The licensing process includes assessments of technical capabilities and financial viability, which helps maintain high service standards across the industry.

5. Revenue Generation: Licensing fees contribute to the government’s revenue, which can be reinvested into the telecommunications infrastructure and other public services.

6. Support for Development: By regulating the sector, the NCC can foster growth and innovation in telecommunications, which is crucial for economic development and digital inclusion in Nigeria.

Conditions for obtaining a telecommunication license in Nigeria

To obtain a telecommunication license in Nigeria, applicants must meet several conditions set by the Nigerian Communications Commission (NCC). These conditions ensure that only qualified entities can provide telecommunication services, thereby maintaining industry standards and protecting consumers. These conditions include:

• The applicant must be a corporate body registered under Nigerian law. This includes compliance with the Companies and Allied Matters Act.

• The applicant must meet the NCC’s technical requirements for operating the specific service for which the license is sought. This may involve demonstrating technical expertise and infrastructure capability.

• The applicant must possess sufficient financial resources to provide long-term services. This requirement ensures that the entity can sustain operations and meet service obligations.

• For services that depend on specific resources, such as spectrum or numbering, the NCC must confirm the availability of these resources. The applicant must secure a reservation or assignment of such resources before applying.

• The NCC may impose other conditions as deemed necessary for the specific service being provided. This can include compliance with industry regulations and standards.

• Applicants must provide various documents, including incorporation documents, tax clearance certificates, feasibility reports, and evidence of funding.

• Payment of a non-refundable administrative charge, typically 5% of the relevant license fee, is required upon submission of the application.

Application Process

To obtain a telecommunication license in Nigeria, the following procedure and requirements must be met:

Requirements for Individual License 

• Sign up on eservices.ncc.gov.ng and click on Licensing Application Management System to apply.

• Fill the form and upload the relevant documents listed below:

• Certificate of Incorporation.
• Tax Clearance Certificate.
• Certified True Copy (CTC) of Articles & Memorandum of Association.
• Feasibility report of proposed service.
• Soft Copy of Passport photographs of authorized representative.
• Certificates of qualified technical staff (where applicable).
• Certified True Copy (CTC) of Form CO7 (List of Company Directors).
• Soft Copy of Passport photographs of Directors of the company.
• Certified True Copy (CTC) of Company’s Registered Address.
• Utility bill of the official address of the Company.
• Evidence of funding for the project.
• The amount budgeted for the project i.e. estimated funding for the deployment of the proposed service.

• Applications should be submitted when all documents above have been uploaded.

• On submission of the application, a non-refundable administrative charge, which is 5% of the relevant license fee would be paid via the Licensing Application Management System.

• License fee is payable on approval of application.

• All Automated Vehicle Tracking Service (AVTS) applicants henceforth must obtain a security clearance from the State Security Service (SSS) for the proposed service before applying for the license, as a condition precedent for the grant of license by the Commission. The Personal History Statement Form (PHS) for the company and its Directors will be provided by the Commission for completion by applicants.

• All VAS (Content Service using Short Code) applicant (s) must present:
• Evidence of an Agreement or a Memorandum of Understanding (MOU) entered between the company and any of the VAS Aggregators.

• Alternatively, the company should provide a copy of License duly issued to it by the Central Bank of Nigeria (CBN) for Mobile Money Services or from the National Lottery Regulatory Commission (NLRC) for lottery services.

Requirements for Class License

• Sign up on eservices.ncc.gov.ng and click on Licensing Application Management System to apply.

• Fill the form and upload the relevant documents listed below:

• Certificate of Incorporation or Registered Business Name.
• Tax Clearance Certificate.
• Certified true copy of Articles & Memorandum of Association to include telecommunication as an object clause that allows the Company to provide telecommunication service in Nigeria
• CAC Status Report
• Soft Copy of Passport photographs of authorized representative.
• Certificate of qualified technical staff
• Details of proposed service
• Soft Copy of Passport photographs of Directors of the Company/Sole Proprietorship.

• Applications should be submitted when all documents above have been uploaded.

• On submission of the application, a License fee of Ten Thousand Naira (₦10,000.00) only, is payable via the Licensing Application Management System.

Additional License & Renewal Application Requirements

Existing licensees wishing to apply for additional license(s) or renew their current licenses must be up to date on their existing licensing obligations. These obligations include but are not limited to the following:

• Payment of Annual Operating Levy (AOL): the company is required to submit Audited Accounts (Management Accounts are to be submitted if Audited Accounts are not yet available) for assessment of the AOL payable to the Commission. Note that Non-Operational Licensees are also required to pay AOL.
• Submission of Year End Questionnaire/Information
• Submission of Individual Consumer Code of Practice
• Type approval of equipment in use on network
• Payment of Spectrum and National Numbering Plan (NNP) fees (where applicable)
• Obtaining prior approval from the Commission before change in shareholdings above 10%.
• Notification on change of address, business name etc.
• Obtaining approval before license transfer
• Requirement to roll-out service / commence operation etc.
• Submission of Annual Ownership Report not later than 31^st March every year (Corporate Affairs Documents).
• Current Tax Clearance Certificate
• Licensees seeking renewal must make their applications at least six (6) months before expiration.

Conclusion

Obtaining a telecommunication license in Nigeria involves a detailed process with specific requirements that must be met to ensure compliance with regulatory standards set by the Nigerian Communications Commission. Failure to obtain a valid license can result in substantial penalties, stressing the importance of meeting these standards. As a result, potential operators should get competent legal advice to effectively handle the licensing procedure.

By Adeola Oyinlade & Co.

Adeola Oyinlade & Co.; a leading full-service law firm in Nigeria provides help and offers advisory to both local and foreign clients in the Nigerian telecommunication sector including assisting clients in obtaining licenses in Nigeria. 

Need help? Kindly contact us using the details below:

Email: [email protected]

Mobile: +234 803 826 7683 / +234 802 686 0247

Introduction

Financial technology, generally referred to as “Fintech”, is a thriving business that applies technology. Leveraging innovation to improve financial services, cut transaction costs, and increase access to financing. Smartphones enabled financial breakthroughs like mobile banking. Fintech is disrupting traditional financial markets, including capital market trade. The banking industry prioritizes technology innovation more than ever before.

This article examines the meaning and characteristics of fintech, legal and regulatory frameworks and types of fintech licenses in Nigeria.

Meaning of Fintech

The term “Fintech” refers to financial technology, which encompasses all types of technology used to provide financial services to businesses and consumers. Fintech is the combination of finances and technology. It creates and promotes new financial products, institutions, markets, and technologies. Fintech provides people with opportunities to decrease intermediaries, lower costs, and increase transparency in accessing financial services.

This encompasses a wide range of offerings, such as online banking, mobile payments, lending, digital wallets, savings/investment tools and financial management applications. Fintech businesses use cutting-edge technology such as artificial intelligence, blockchain, and big data to provide novel financial products and services that are intended to be more efficient, accessible, and user-friendly than traditional financial institutions.

Characteristics of Fintech

Some of the characteristics of Fintech include:

• Fintech focuses on innovation rather than disruption. “Disruptive” is the most overused term in FinTech. While some FinTech operations are undoubtedly disruptive, disruption is not required. but Innovation.

• Fintech must focus on both process and technology. While technology is plainly necessary to address the problem being solved or the opportunity being generated, users will be required to adapt critical procedures, regardless of whether the customer is an end consumer or a business. Successful Fintech consider how the change being implemented will affect end customers and how they will adjust.

• Fintech provide services to B2C, B2B, and hybrid enterprises (with components of both). FinTech solutions are often “one-to-many” solutions, which means they may be applied to a wide range of businesses rather than being custom-built and employed by just one. Those applications of technology belong in a different category.

• Fintech are frequently enhancements to an existing product or process that make it better, faster, and occasionally less expensive, rather than something entirely new.

• Fintech are typically founded by persons who work in financial services and perceive a better/newer way to accomplish something or uncover a completely new solution inside their business. However, like with everything, there are no absolutes; some Fintech are founded by people outside of the business. These FinTech pioneers are frequently accompanied by industry veterans who can provide intimate knowledge of procedures, rules, and so on. The Fintech industry attracts and depends on people who enjoy creating and innovating rather than running current firms or working only within existing or traditional businesses. People who work in FinTech are entrepreneurs or intrapreneurs, not business operators, and they are more comfortable with risk.

Legal and Regulatory Framework of Fintech in Nigeria 

Fintech is governed by multiple regulatory frameworks due to its complex nature. The legal and regulatory framework can be viewed from both legal and institutional perspectives.

The laws and regulations applicable to fintech include:

• Central Bank of Nigeria Act, 2007
• Banks and Other Financial Institutions Act, 2020
• Nigerian Communications Act, 2003
• Business Facilitation Miscellaneous Provision, Act 2023
• Nigerian Exchange Technology Board Listing Rules, 2022
• Nigeria Startup Act, 2022
• NCC Value Added Services and Aggregator Framework, 2018
• SEC Crowdfunding Rules, 2021
• Moneylenders Laws of the respective states in Nigeria (this line item apart, all laws and regulations mentioned in this section are federal laws)
• NITDA Nigeria Cloud Computing Policy, 2019
• Companies and Allied Matters Act, 2020
• Investments and Securities Act, 2007
• Federal Competition and Consumer Protection Act, 2018 and Federal Competition and Consumer Protection Commission regulations
• National Insurance Commission Act
• Money Laundering (Prohibition) Act, 2011 (as amended)
• Corrupt Practices and other Related Offences Act, 2000
• Economic and Financial Crimes Commission (Establishment, Etc.) Act, 2004
• Terrorism (Prevention) Act, 2011 (as amended)
• Cybercrimes (Prohibition, Prevention, Etc.) Act, 2015
• Nigeria Data Protection Act, 2023
• Nigeria Data Protection Regulations, 2019
• NDPR Implementation Framework, 2020
• Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995
• Nigerian Investment Promotion Commission Act, 2004
• National Office for Technology Acquisition and Promotion (NOTAP) Act, 1992
• Finance Act, 2023 (as amended)
• Nigerian Deposit Insurance Commission Act, 2006
• Financial Reporting Council of Nigeria Act. 2011

As a primary regulator of Fintech in Nigeria, the Central Bank of Nigeria has established the following guidelines for its operations:

• CBN Operational Guidelines for Open Banking in Nigeria, 2023;
• CBN Framework for Regulatory Sandbox Operations, 2020 (“Sandbox Operations Framework”);
• CBN Guidelines on Mobile Money Services in Nigeria, 2015;
• CBN Guidelines on Operations of Electronic Payment Channels in Nigeria, 2020;
• CBN Guidelines for Licensing and Regulation of Payment Service Banks in Nigeria, 2018;
• CBN Regulatory Framework for the Use of Unstructured Supplementary Service Data Financial Services in Nigeria, 2018;
• CBN Regulation for Bill Payments in Nigeria, 2018;
• CBN Risk-Based Cyber-Security Framework and Guidelines for Deposit Money Banks and Payment Service Providers, 2018;
• CBN Microfinance Policy, Regulatory and Supervisory Framework, 2011;
• CBN Revised Guidelines for Finance Companies in Nigeria, 2014;
• CBN Guidelines on Operations of Electronic Payment Channels in Nigeria, 2016;
• CBN Guidelines on International Mobile Money Remittance Service in Nigeria, 2015;
• CBN Guidelines on International Money Transfer Services in Nigeria, 2014;
• CBN Regulation on Electronic Payments and Collections for Public and Private Sectors in Nigeria, 2019;
• CBN Regulation for Direct Debit Scheme in Nigeria, 2018; and
• CBN Regulatory Guidelines on the e-Naira, 2021.

Types of Fintech Licenses in Nigeria

There are various types of fintech licenses that a company can apply for in Nigeria. The nature of the company’s business determines this. These licenses include the following:

1. Payment Service Provider (PSP) License:

The Central Bank of Nigeria grants the Payment Service Provider (PSP) License, allowing companies to provide electronic payment solutions, internet banking, and mobile money.

To obtain a Payment Service Provider license, the following steps must be taken:

Incorporation and Legal Structure

• The applicant must be duly incorporated as a company in Nigeria.
• The legal structure and corporate governance must align with the requirements stipulated by the CBN.
• The objectives and authorized share capital of the company must fit into the exact category of license to be applied for
• Directors, shareholders, and key management personnel must meet the “fit and proper” criteria set by the CBN. This involves assessing their integrity, competence, and financial soundness. They may be interviewed by relevant security agencies for a background check.

Financial Requirements

• The cost of setting up a payment service provider company depends on the category of license.
• Major financial obligations include the shareholders’ funds, which must be deposited with the CBN during the pendency of the application.
• Once the application is approved, the funds are returned to the owner with any accruable interest.
• For example:
• PSSP or PTSP: Deposit NGN100 Million with the CBN.
• MMO and Switching Companies: Deposit a minimum of NGN2 Billion each with the CBN

Documentary Requirements

• Incorporation documents: Certificate of incorporation from the Corporate Affairs Commission (CAC).
• Tax clearance: 3 years of tax clearance certificates for the company.
• Share structure: Details of the shareholding structure.
• Board and management details: CVs of board and management members.
• Organizational structure: Organogram and number of employees.
• Business plan: A detailed 5-year business plan and financial projections.
• IT policies: Policies on privacy, data protection, backup, security, etc.
• Risk management framework: Enterprise Risk Management Framework.
• Disaster recovery plan: Contingency and Disaster Recovery Plan.
• Draft agreements: Draft agreements with technical partners, banks, merchants, telcos, etc.
• Application fee: Non-refundable application fee of NGN100,000 paid via RTGS

Application Process

• Pre-Application Engagement: Engage with the CBN or experienced consultants for clarification on requirements.
• Submission of Application: Submit the formal application, accompanied by all necessary documents, to the CBN.
• Payment of Shareholder Funds: Deposit the required shareholders’ funds immediately after submitting the application.
• Due Diligence and Background Checks: The CBN conducts due diligence and background checks on the directors, shareholders, and key management personnel.
• On-Site Inspection: The CBN may conduct an on-site inspection of the applicant’s premises.
• Review and Approval: The CBN reviews the application, taking into consideration all relevant factors, including the applicant’s financial stability, compliance with guidelines, and adherence to technology standards.
• Post-Licensing Obligations: License holders are required to comply with ongoing reporting requirements, risk management practices, and any additional guidelines issued by the CBN.

By meeting these requirements and submitting the necessary documents, entities can secure a Payment Service Provider license in Nigeria, facilitating their participation in the country’s growing fintech sector.

 Payment Service Provider license is divided into different categories which include:

1. Switching and Processing License:

A switching and processing license, issued by the CBN, allows companies to conduct activities like card processing, transaction clearing, and settlement agents, enabling them to run a payment gateway linking various payment channels in Nigeria. Example of switching and processing fintech companies in Nigeria include Flutterwave, Interswitch and Paystack.

To obtain a switching and processing license, the following steps must be taken:

Capital Requirements

• Minimum shareholders’ funds of ₦2 billion unimpaired by losses
• Refundable escrow deposit of ₦2 billion into the CBN PSP Share Capital Deposit Account, paid as a lump sum

Licensing Process

• A written application to the Director, Payments System Management Department, Central Bank of Nigeria, Abuja, together with proof of payment and other required documents.
• Application fee of ₦100,000
• Validity period determined by CBN upon satisfactory performance

Documentary Requirements

• Incorporation documents
• 3 years of tax clearance
• Share structure, number of employees, and organogram
• Functional physical and digital addresses
• Board composition and personal details of board members and top management
• 5-year business plan and financial projections
• Features of the switching and processing scheme, security architecture, and process flows
• IT policies (privacy, data protection, backup, security, etc.)
• Risk management, internal control, KYC/AML procedures, fraud detection plan, consumer protection policy
• Executed agreements with technical partners, banks, merchants, etc.

Permissible Activities

• Switching
• Card processing
• Transaction clearing and settlement agent services
• Non-bank acquiring services
• Activities of super-agents, payment terminal service providers (PTSPs), and payment system service providers (PSSPs)

2. Mobile Money Operator (MMO) License:

The Mobile Money Operator License, issued by the CBN, allows companies to offer mobile money services like electronic wallets, funds transfers, and bill payments.

To obtain a Mobile Money Operator license, the following steps must be taken:

Capital Requirements

• Minimum issued share capital of ₦2 billion unimpaired by losses
• Refundable escrow deposit of ₦2 billion into the CBN PSP Share Capital Deposit Account

Application Process

• Application letter to the Director, Payments System Management Department, CBN
• Non-refundable application fee of ₦100,000 paid via RTGS

Documentary Requirements

• Evidence of formation of the consortium/company (Certificate of Incorporation)
• Consortium/company profile and contact details
• Memorandum and Articles of Association
• Shareholding structure
• Forms C02 (Return on Allotment of Shares) and C07 (Particulars of Directors)
• CVs of board and management
• Organizational structure and organogram
• Business plan with details on:

• Nature of business
• Scheme features
• Security features
• 3-year financial projections
• Transaction/customer charges
• Profit sharing agreement

• IT policies (privacy, data, backup, security, etc.)
• Enterprise Risk Management Framework
• Contingency and Disaster Recovery Plan
• Draft agreements with partners (technical, banks, merchants, telcos, etc.)
• 3 years tax clearance certificates for consortium members
• Project deployment plan

The application process involves an initial Approval-in-Principle (AIP) stage, followed by the final license issuance within 2-3 months after meeting all requirements.

3. Payment Solution Service Provider (PSSP) License:

The NCC and CBN issue the Payment Solution Service Provider License, allowing companies to provide payment processing and switching services for electronic transactions.

To obtain a Payment Solution Service Provider license, the following steps must be taken:

Capital Requirements

• Minimum shareholders’ funds of ₦100 million unimpaired by losses
• Refundable escrow deposit of ₦100 million into the CBN PSP Share Capital Deposit Account

Licensing Process

• Application letter to the Director, Payments System Management Department, CBN
• Non-refundable application fee of ₦100,000 paid via RTGS
• Validity period determined by CBN upon satisfactory performance
• Final license fee of ₦1 million to be paid before issuance of the commercial license

Documentary Requirements

• Certificate of Incorporation from the Corporate Affairs Commission (CAC)
• Memorandum and Articles of Association with the object clause limited to PSSP activities
• 3 years of tax clearance certificates for the company
• Company profile detailing current business operations, products, and services
• Shareholding structure and details of directors/management (CVs, Forms C02 and C07)
• Organizational structure and number of employees
• 5-year business plan and financial projections
• IT policies (privacy, data protection, backup, security, etc.)
• Enterprise Risk Management Framework
• Contingency and Disaster Recovery Plan
• Draft agreements with technical partners, banks, merchants, etc.

The application process involves an initial Approval-in-Principle (AIP) stage, followed by the final license issuance within 6 months after meeting all requirements and paying the final license fee.

Compliance with CBN regulations, including data protection, KYC/AML, and consumer protection, is also crucial for obtaining and maintaining the PSSP license in Nigeria.

4. Payment Terminal Service Provider (PTSP) License:

The Nigerian Communications Commission (NCC) in collaboration with the CBN grants the Payment Terminal Service Provider (PTSP) License, allowing companies to offer payment terminal and POS services. 

To obtain a Payment Terminal Service Provider license, the following steps must be taken:

Capital Requirements

• Minimum shareholders’ funds of ₦100 million unimpaired by losses
• Refundable escrow deposit of ₦100 million into the CBN PSP Share Capital Deposit Account

Licensing Process

• Application letter to the Director, Payments System Management Department, CBN
• Non-refundable application fee of ₦100,000 paid via RTGS
• Final license fee of ₦1 million to be paid before issuance of the commercial license

Documentary Requirements

• Certificate of Incorporation from the Corporate Affairs Commission (CAC)
• Memorandum and Articles of Association with the object clause limited to PTSP activities
• 3 years of tax clearance certificates for the company
• Company profile detailing current business operations, products, and services
• Shareholding structure and details of directors/management (CVs, Forms C02 and C07)
• Organizational structure and number of employees
• 5-year business plan and financial projections
• IT policies (privacy, data protection, backup, security, etc.)
• Enterprise Risk Management Framework
• Contingency and Disaster Recovery Plan
• Draft agreements with technical partners, banks, merchants, etc.
• Payment Card Industry Data Security Standard (PCI-DSS) certificate
• Payment Application Data Security Standard (PA-DSS) or compliance with CBN IT Standards for Solution Development certificate

The application process involves an initial Approval-in-Principle (AIP) stage, followed by the final license issuance within 6 months after meeting all requirements and paying the final license fee.

Compliance with CBN regulations, including data protection, KYC/AML, and consumer protection, is also crucial for obtaining and maintaining the PTSP license in Nigeria.

2. Payment Service Bank (PSB) License

PSBs are licensed by the Central Bank of Nigeria (CBN) to leverage technology and agency banking to provide financial services to the unbanked and underbanked population, especially in rural and hard-to-reach areas. The main objective is to enhance financial inclusion by increasing access to deposit products and payment/remittance services.

To obtain a Payment Service Bank license, the following steps must be taken:

Capital Requirements

• Minimum shareholders’ funds unimpaired by losses of ₦5 billion

Licensing Process

• Application made to the Director, Payments System Management Department, CBN
• Non-refundable application fee of ₦500,000
• Final license fee of ₦2 million to be paid before issuance of the commercial license

Documentary Requirements

• Certificate of Incorporation from the Corporate Affairs Commission (CAC)
• Memorandum and Articles of Association with the object clause limited to PSB activities
• 3 years of audited financial statements
• Shareholding structure and details of directors/management (CVs, Forms C02 and C07)
• Organizational structure and number of employees
• 5-year business plan and financial projections
• IT policies (privacy, data protection, backup, security, etc.)
• Enterprise Risk Management Framework
• Contingency and Disaster Recovery Plan
• Draft agreements with technical partners, banks, merchants, telcos, etc.
• Evidence of at least 25% of access points to be located in rural/underserved areas
• Proof of partnership with card scheme operators (e.g. Visa, Mastercard)

The application process involves an initial Approval-in-Principle (AIP) stage, followed by the final license issuance within 6 months after meeting all requirements and paying the final license fee.

Compliance with CBN regulations, including data protection, KYC/AML, consumer protection, and financial inclusion targets, is crucial for obtaining and maintaining the PSB license in Nigeria.

3. Alternative Lending/Digital Credit Licenses

Alternative lending or digital credit refers to fintech-based lending platforms that provide quick, non-collateralised micro-credit facilities, as opposed to traditional loan application processes. These platforms are commonly known as “loan apps” and can be operated by licensed moneylenders, banks, and finance companies.

To obtain an Alternative Lending/Digital Credit license in Nigeria, the requirements are:

For Money Lenders License

• Application to the Home Affairs Ministry in states like Lagos through the state Moneylenders law
• Fill Moneylenders Ordinance Form B and pay application fee
• Yearly renewal process required

For Finance Company License

• Application to the Central Bank of Nigeria (CBN)
• Minimum share capital of ₦100 million
• Submit comprehensive IT policy, 5-year business plan, Enterprise Risk Management plan, and Dispute Resolution Framework
• Detailed information about technical/IT service providers

Additional Requirements

• Compliance with Nigeria Data Protection Regulation (2019) for data protection
• Registration with Federal Competition and Consumer Protection Commission (FCCPC) under their Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending, 2022
• Robust cybersecurity measures to protect customer data
• Thorough customer due diligence to prevent fraud

The key documents required include:

• Certificate of incorporation
• Tax clearance certificates
• Shareholding structure and CVs of directors/management
• Organizational structure and number of employees
• Business plan and financial projections
• IT policies (privacy, data protection, security, etc.)
• Risk management and compliance frameworks

Meeting these capital, regulatory, and operational requirements is essential to obtain an Alternative Lending/Digital Credit license from either the state government or the Central Bank of Nigeria. The license allows companies to legally provide digital lending services in Nigeria.

4. Digital Crowdfunding Intermediary License

A Digital Crowdfunding Intermediary is an entity that facilitates transactions involving the offer or sale of securities through a crowdfunding portal or platform.

Licensing Process

• Minimum paid-up share capital of ₦100,000,000 (One Hundred Million Naira) 
• Application to the Securities and Exchange Commission (SEC) using the appropriate forms.
• Non-refundable application fee and final license fee to be paid as prescribed by the SEC.

Documents Required

• Certificate of Incorporation from the Corporate Affairs Commission (CAC)
• Memorandum and Articles of Association
• Audited accounts of the applicant
• Company profile, business plan, and operational manual
• Details of the crowdfunding system to be adopted
• Proposed brand name and domain names
• Fidelity Insurance Bond covering at least 20% of the minimum capital

Additional Requirements

• Compliance with the Federal Competition and Consumer Protection Commission (FCCPC) guidelines for digital lending.
• Compliance with the Nigeria Data Protection Regulation (2019) for data protection

The application process involves an initial Approval-in-Principle (AIP) stage, followed by the final license issuance within 6 months after meeting all requirements and paying the final license fee. Compliance with these regulatory requirements is crucial for obtaining and maintaining the Digital Crowdfunding Intermediary License in Nigeria.

5. Regulatory Sandbox

A Regulatory Sandbox is a controlled environment where fintech companies can test innovative products, services, delivery channels or business models under the supervision of the regulator. It allows for live testing of new financial technologies and services in a live environment, with appropriate safeguards and oversight.

Application Process

• Applications are made on invitation from the Central Bank of Nigeria (CBN)
• Applicants submit the following documents:
• Board approval (where applicable)
• Incorporation documents, company profile and contact details
• CVs of board members and management
• Project plan, business proposal and outcomes
• Strategy for sandbox trials and AML/CFT policy
• Proof of intellectual property rights
• The CBN reviews applications and informs eligible applicants within 45-60 working days
• Successful applicants receive a Letter of Approval to test their innovation in the sandbox

Participants must comply with the CBN’s operational requirements, including:

• Filing requirements
• Reporting requirements during the sandbox testing
• Exit conditions and approval for expiration
• Evaluation and review of the license

• The CBN may relax specific regulations during the sandbox period
• Upon exit, participants must meet all relevant legal and regulatory requirements

Conclusion

The requirements across these licenses include minimum capital, application and licensing fees, incorporation documents, financial statements, IT policies, risk management frameworks, and regulatory compliance. Obtaining the appropriate fintech license is crucial for companies to legally operate in Nigeria’s growing fintech sector.

Note: The content of this article is anticipated to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstance.

By Adeola Oyinlade & Co.

Adeola Oyinlade & Co.; a leading full-service law firm in Nigeria provides help and offers advisory to both local and foreign clients in the fintech sector and other related matters in Nigeria. 

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