The Story of a Catfish and Fintech Regulation

"Brown bullhead catfish" by Duane Raver. Source: US Fish & Wildlife Service

Originally from Nigeria’s oil-rich Delta State, Madame Flora Edojah moved to Lagos in 1986 and began to sell catfish. Since then, her stall has become the backbone of the Ijesha Market.

As the country emerged the largest catfish producer in Africa, she saw the potential for working with larger customers like supermarkets and hotels.

However, because of limitations often associated with small businesses in obtaining loans, she couldn’t manage to enter the large-scale market.

It was Muneeb Ahmed, an investment officer at a fintech startup called Lydia, who helped Madame Flora open a bank account and obtain a bank verification number to establish and boost her credit rating.

Today, she no longer keeps her earnings under her mattress and can do business with supermarkets and hotels.

The story of Madame Flora is pretty common in the Country as fintech startups have begun to put businesses on a secure footing.

Generally speaking, technology-enabled innovation in financial services has
rapidly grown in the past decade and still continue to evolve a very fast pace.

Yet, such an accelerated progression could limit the scope of fintech due to the impossibility of properly evaluating and managing risks associated with increasing levels of sophistication.

Indeed, many innovative services are resource intensive and require careful cost-benefit analysis for regulators who do seek to implement their own regulatory initiatives.

For instance, some of them have responded to such challenges by developing innovation offices, regulatory sandboxes, or RegTech solutions for regulators.

Still, no single initiative has proved to be a silver bullet. This is why the authors of the study suggest “regulators in emerging and developing economies need to remain agile and open as they innovate and create regulatory initiatives,” since “when effectively carried out, innovative regulatory initiatives enable inclusive fintech and support regulators in long-term capacity building.” In the end, it’s a process.

Find out more here.