The Governor of the Central Bank of Nigeria (CBN), Yemi Cardoso, says the rising volume of non-bank transactions and other financial institutions pose serious risks to financial stability in the country.
Cardoso stated this during his remark at the 10th Meeting of the College of Supervisors for Non-Bank Financial Institutions (CSNBFI) in Abuja on Monday.
Represented by Abayomi Arogundade, Acting Director, Cardoso reiterated the importance of monitoring trends, risks and innovations of Non-Bank Financial Institutions (NBFIs) and Other Financial Institutions (OFIs) as their increasing transaction volumes pose major financial system stability risk.
“Fintech loans are one of the most commonly reported innovations. While overall this may appear small in relation to the size of credit by DMBs, some jurisdictions globally, have noted a growing trend in the volume of these loans.
“In many cases, fintech credit is provided via electronic platforms that connect lenders to borrowers – in which case the platform takes the role of a financial auxiliary.
“In some cases, however, loans are taken on the balance sheet of these platforms (even if it is short-term), in which case the platforms are akin to new types of financial intermediaries. These entities are typically fintech firms that offer applications, software, and other technologies to streamline mobile and online banking.
Dr. Olorunsola Olowofeso, Director General of the West African Monetary Institute (WAMI), also identified major financial issues in West Africa, such as funding squeeze.
