Nigeria fintech sector shifts toward safer lending amid fraud risks

Nigeria’s digital lending sector is undergoing a structural shift as fintech operators move away from high-risk, unsecured instant loans toward borrowers with verifiable income and established credit histories. This pivot follows aggressive enforcement by the Federal Competition and Consumer Protection Commission (FCCPC) to curb predatory practices and unethical debt-recovery tactics. Lenders are increasingly utilizing the Central Bank of Nigeria’s Bank Verification Number (BVN) system to prioritize safer borrowers and comply with mandatory registration frameworks.

Simultaneously, the growth of the Nigerian tech ecosystem faces challenges regarding financial crime and digital fraud. A recent dispute involving Zacuten Technologies and Plaude Technologies highlights these vulnerabilities. Zacuten alleges it was defrauded in a cross-border transaction totaling $13.07 million, with over $4 million remaining unpaid. The company claims the incident involved deceptive representations and fraudulent instruments, including a fake $2.78 million cashier’s cheque. The case underscores the difficulties of enforcing contracts and preventing fraud as high-value fintech transactions increasingly involve international actors.