Nigeria sets the pace for African fintech as Kenya watches closely

Kenya has long worn the crown as Africa’s fintech pioneer, driven by the mobile money revolution that reshaped everyday transactions and brought millions into the formal financial system.

But a major policy shift from West Africa is now challenging Nairobi to rethink its role in the continent’s next fintech chapter.

The Central Bank of Nigeria (CBN) has released its first dedicated fintech policy report under the Policy Insight Series 2025, a detailed roadmap that goes beyond domestic regulation.

While the document is rooted in Nigeria’s realities, its ambition is unmistakably continental — and its implications are highly relevant for Kenya’s fintech ecosystem.

At the heart of the report is a clear statement of intent. It argues that, “Nigeria can lead not just in adoption but in the design of the global fintech future, provided it enhances collaboration, strengthens infrastructure, and communicates progress with clarity.”

This framing matters for Kenya, which has excelled in adoption but continues to grapple with how to scale innovation sustainably and across borders.

One of the most striking elements for Kenyan policymakers is Nigeria’s candid assessment of regulation. The report reveals that “87.5 per cent of fintech operators say compliance costs are materially dampening their ability to innovate,” while more than a third take over a year to bring new products to market.

The CBN’s response — including a proposed Single Regulatory Window and “Compliance-as-a-Service” utilities — aims to reduce red tape without weakening oversight.

For Kenyan fintech founders who often cite regulatory uncertainty as a brake on growth, this approach offers a potential template.

Equally significant is Nigeria’s push for regulatory passporting. The report proposes bilateral pilots with Kenya, Ghana, Senegal and South Africa, allowing mutual recognition of licences.

For Kenyan startups that face high costs and complexity when expanding into West Africa, this could be transformative.

As the report notes, such frameworks would lower barriers for “every startup on this continent that has ever been told, ‘You need a separate licence in every single market.’”

The inclusion agenda also resonates strongly in Kenya. Nigeria still has 26 per cent of its adult population financially excluded, with higher rates in rural regions.

Rather than broad rhetoric, the report focuses on practical fixes — affordable digital ID APIs, interoperable credit rails and reliable USSD channels.

It is explicit that inclusion must move beyond payments, signalling a shift “from transactions to credit, savings and capital formation for informal enterprises.”

This mirrors ongoing debates in Kenya on how fintech can better serve MSMEs and the informal economy.

For regulators such as the Central Bank of Kenya, Nigeria’s experience also offers lessons in credibility.

Addressing global concerns about fraud, the report states bluntly that “the challenge is not policy absence but implementation gaps,” pointing to Nigeria’s exit from the FATF grey list as evidence that reform can restore investor confidence.

The message for Kenya is clear. Nigeria is no longer content to be Africa’s largest fintech market by volume alone; it wants to help write the rules.

For Nairobi, this is less a threat than an invitation — to collaborate, align standards and help shape a more integrated African digital finance market.