According to Mastercard's report "The Future of Fintech-Africa," the number of fintech startups operating in Africa rose 81% between 2019 and 2021. Some of those startups operate outside the law and are deemed predatory. Authorities are now taking measures to make them compliant.

In Nigeria, an additional 106 digital lenders got their approvals to operate from the Federal Competition and Consumer Protection Commission (FCCPC) last Wednesday, January 25. A few days later, on January  30, the Central Bank of Kenya (CBK) licensed 12 fintech startups, raising the number of licensed fintech startups in the country to 22.

"The focus of the engagements has been inter alia on business models, consumer protection, and fitness and propriety of proposed shareholders, directors, and management. This is to ensure adherence to the relevant laws and importantly that the interests of customers are safeguarded, " the CBK indicated in its release announcing the licensing.

In 2022, Kenya and Nigeria took regulatory measures to secure the digital lending landscape following consumers' growing complaints about the various practices, including high-interest rates and the name-and-shame behavior, in that ecosystem. Nigeria even took down more than 50 loan apps from Playstore, according to an interview with FCCPC CEO Babatunde Irukera.

Also, in November 2022, Google informed digital lenders operating in the two countries that starting from January 2023, it would host their app on Playstore only when they submit a genuine business license. "Google has been very supportive, including providing their expert knowledge and experience in offering advice on what works best in achieving laudable regulatory objectives," he said.

Since March 2022, the CBK has received 381 licensing applications. In Nigeria, of the 106 fintech startups that have received their approvals, 65 have received full approval, while the remaining 41 have received conditional approval.

Samira Njoya