Log in or register
Share on LinkedInShare on LinkedIn

ARTICLE · 19 FEBRUARY 2025

Setting Up A Non-Interest Bank In Nigeria

Pavestones
Pavestones
Contributor
Pavestones

Pavestones

Pavestones is a client focused, solution driven and commercially savvy law practice, providing...

View firm profile
Explore more from Pavestones

Non-interest banking is gaining traction in Nigeria as an alternative to conventional banking. This model operates on the principles of ethical finance, risk-sharing, and asset-backed transactions.

NigeriaFinance and Banking
Pavestones Legal
Pavestones Legal

Introduction

Non-interest banking is gaining traction in Nigeria as an alternative to conventional banking. This model operates on the principles of ethical finance, risk-sharing, and asset-backed transactions. It prohibits interest-based lending while promoting profit-sharing mechanisms.

In this newsletter, we explore the regulatory and compliance considerations for setting up a Non-Interest Financial Institutions (NIFI) in Nigeria and highlight the licensing process and governance requirements.

Non-Interest Banking and Regulatory Framework

Non-interest banking services in Nigeria are carried out by NIFIs licensed by the Central Bank of Nigeria (CBN). The CBN classifies these banks as specialized institutions. Under its Guidelines for the Regulation and Supervision of Institutions Offering Non-Interest Financial Services in Nigeria, the categorizes them into two types:

We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.

Register for freeORLog in

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

View source

Related Articles

Legal Intelligence Newsletters: sign up for the latest legal and regulatory news on your chosen topics

Read more about

Related Comparative Guides

See more popular content from

Article

Digital Lending Regulations In Nigeria: What Every Loan App Must Know After The FCCPC Court Victory

The Federal High Court's recent affirmation of the FCCPC's regulatory authority over digital lending marks a pivotal moment for Nigeria's loan app industry. With enforcement of the DEON Regulations now fully resumed, digital lenders face renewed scrutiny over registration, transparency, data privacy, and debt recovery practices. Understanding these compliance requirements is no longer optional—it's essential for survival in Nigeria's evolving fintech landscape.
NigeriaFinance and Banking
Olisa Agbakoba Legal (OAL)
Olisa Agbakoba Legal (OAL)
Article

CBN’S Data Localisation Directive – Compliance Considerations For Payment System Participants

Nigeria's Central Bank has introduced sweeping data localisation requirements that will fundamentally reshape how payment service providers, banks, and financial institutions handle transaction data. With a January 2027 compliance deadline, these new rules mandate that all payment transaction data generated within Nigeria must be stored and managed locally, raising critical questions about cloud infrastructure, vendor relationships, and operational readiness. This analysis examines the scope of the requirem
NigeriaFinance and Banking
Pavestones
Pavestones
Article

Nigeria’s SEC Tightens The Rules For Fund And Portfolio Managers: What Capital Market Operators Need To Know

The Nigerian Securities and Exchange Commission has introduced significant amendments to its Rules and Regulations governing Fund/Portfolio Management Operations, with far-reaching implications for how fund and portfolio managers conduct their business. These changes place heightened emphasis on investor protection, conflicts management, custody arrangements, and cross-border investments, requiring Capital Market Operators to fundamentally review their investment practices, client documentation, and governa
NigeriaFinance and Banking
Syntegral Legal Practice
Syntegral Legal Practice
Article

SEC’s Guidelines On Revised Minimum Capital Requirements For Capital Market Operators

Nigeria's Securities and Exchange Commission has introduced new capital adequacy rules for fund managers and private capital participants, establishing tiered minimum capital requirements based on assets under management. The guidelines clarify what constitutes qualifying capital, outline compliance pathways including cash injection and securities transfer, and set a June 2027 deadline for full implementation.
NigeriaFinance and Banking
Udo Udoma & Belo-Osagie
Udo Udoma & Belo-Osagie
Article

CBN’S Data Localisation Directive – Compliance Considerations For Payment System Participants

Nigeria's Central Bank has introduced sweeping data localisation requirements that will fundamentally reshape how payment service providers, banks, and financial institutions handle transaction data. With a January 2027 compliance deadline, these new rules mandate that all payment transaction data generated within Nigeria must be stored and managed locally, raising critical questions about cloud infrastructure, vendor relationships, and operational readiness. This analysis examines the scope of the requirem
NigeriaFinance and Banking
Pavestones
Pavestones
Article

Virtual Asset Service Provider (VASP) Licences In Kenya & Nigeria - What You Need To Know

Kenya and Nigeria are formalizing their digital asset markets through Virtual Asset Service Provider (VASP) licensing frameworks. While both countries require regulatory approval for crypto operations, their licensing categories, capital requirements, and compliance expectations differ significantly. Understanding these distinctions is essential for fintech founders and financial institutions seeking to enter or expand in these African markets.
NigeriaTechnology
Pavestones
Pavestones
Article

Forex Trading In Nigeria: The Implications Of Sec Proposed Rules On Online Forex Trading For Technology And Platform Providers

Nigeria's Securities and Exchange Commission has proposed comprehensive rules for online Forex trading and Contracts for Difference (CFDs), establishing a regulatory framework that extends beyond brokers to encompass technology and platform providers. The proposed regulations introduce stringent capital requirements, operational standards, and compliance obligations for businesses providing trading infrastructure, raising critical questions about registration, data localization
NigeriaFinance and Banking
Pavestones
Pavestones