Fintech Regulation, Consumer Protection, and Financial Market Stability in Nigeria

The rapid growth of fintech firms in Nigeria has created a complex regulatory challenge, requiring authorities to balance the promotion of financial innovation with the protection of consumers and the preservation of financial market stability. This study examines the effectiveness of fintech regulation in safeguarding consumer interests and maintaining financial market stability in Nigeria, using a mixed-methods approach that combines legal-regulatory analysis with empirical assessment of regulatory outcomes. Qualitative data are gathered through structured interviews with 30 regulators at the Central Bank of Nigeria, the Securities and Exchange Commission, and the Nigerian Communications Commission, as well as with 20 senior compliance officers at fintech firms. Quantitative data on consumer complaint rates, unauthorized transaction volumes, platform defaults, and systemic risk indicators are sourced from regulatory databases for the period 2019 to 2023. The study applies content analysis to regulatory documents and uses regression analysis to test whether enhanced regulatory oversight is associated with lower consumer harm incidence. The theoretical framework draws on regulatory theory, the regulatory sandox literature, and the financial stability-innovation tradeoff model. The study critically evaluates the Central Bank of Nigeria's regulatory sandbox, the Payment Service Bank framework, and the proposed Digital Assets and Service Providers Bill as elements of Nigeria's emerging fintech regulatory architecture. Existing literature identifies regulatory fragmentation across multiple agencies as a key source of consumer protection gaps. This study contributes evidence on the outcomes of existing frameworks and provides a structured regulatory gap analysis with recommendations for the Central Bank of Nigeria and the Federal Government's digital economy policy. Keywords: fintech regulation, consumer protection, financial stability, Nigeria, digital finance