Finance experts want the CBN to require deposit-taking fintechs and microfinance banks to publish annual reports, citing transparency and depositor trust.
Finance experts are urging the Central Bank of Nigeria (CBN) to mandate annual financial reporting for deposit-taking fintechs and microfinance banks (MFBs). They say firms holding public deposits should publish audited numbers like commercial banks do.
On a recent Drinks and Mics podcast hosted by Ugo Obi-Chukwu, panellists argued that the CBN should compel deposit-taking fintechs and MFBs to publish annual reports. Deposit-taking fintechs are financial apps that accept customer deposits, similar to a bank account balance.
Obi-Chukwu’s view was simple, if a company holds customer deposits, its financial performance should be public. Dele Akintola added that public reporting is common in other markets, pointing to Kenya where financial services providers disclose results by default.
Arnold Dublin-Green of Renaissance Capital Africa said the current setup creates a regulatory imbalance. He argued that traditional banks face tighter rules on capital adequacy, meaning how much buffer capital a bank must keep, and non-performing loans, meaning loans customers are not repaying. If banks carry heavier requirements, he said, fintechs taking deposits should also face stronger disclosure expectations.
The discussion also referenced existing CBN rules for MFBs. A 2020 circular requires MFBs to submit audited financial statements and abridged accounts to the CBN within four months after their financial year end. MFBs must also display abridged audited accounts in their offices, and national MFBs are required to publish annual accounts in national newspapers.
Not everyone agreed the rules should extend broadly to all fintech startups. Tunji Andrews, founder of Awabah, said forcing early-stage public disclosure could hurt young companies. He pointed to the “J-curve” phase, when startups may burn cash before they stabilise, and warned that publishing heavy losses could scare depositors even if the business is fundamentally sound.
For users, mandatory annual reports could make it easier to compare deposit-taking fintechs and MFBs on solvency, profitability, and risk. For founders and investors, clearer rules could reduce uncertainty, but the scope matters, especially for startups that are still scaling.
If the CBN moves in this direction, expect debates on thresholds. For example, whether the rule applies only to licensed deposit-taking entities, or also to fintechs that hold funds through partner banks and microfinance institutions.
Primary Source: Nairametrics
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