The Central Bank of Nigeria (CBN) has moved to reinforce regulatory oversight and governance standards in the country’s non-interest financial sector, as authorities respond to rising complexity, innovation, and risk within the fast-growing industry.
At the 2nd Annual Interactive Session between the Financial Regulation Advisory Council of Experts (FRACE) and Advisory Committees of Experts (ACE) of Non-Interest Financial Institutions (NIFIs), the apex bank signalled a stronger push for compliance, risk management, and institutional accountability.
Representing the Deputy Governor for Financial System Stability, Philip Ikeazor, the Director of Financial Policy and Regulation, Dr. Rita Ijeoma Sike, described the engagement as a critical intervention to sustain confidence and stability in Nigeria’s Islamic finance ecosystem.
She said the forum is designed to strengthen governance frameworks while ensuring that regulatory expectations are clearly understood and consistently implemented across institutions.
The CBN noted that non-interest financial institutions are playing an increasingly strategic role in expanding financial inclusion, supporting small businesses, and driving real sector growth through ethical, Shariah-compliant financing models.
However, regulators warned that the sector’s rapid evolution—fuelled by innovation, fintech integration, and expanding product offerings—has introduced new vulnerabilities.
Ikeazor highlighted key risks confronting the industry, including Shariah non-compliance, governance lapses, operational weaknesses, and emerging technology-driven threats, cautioning that failure to address these issues could erode public trust and destabilise the system.
To mitigate these risks, the CBN emphasised the importance of a harmonised governance structure, anchored on FRACE at the regulatory level and ACEs within individual institutions. The framework, according to the Bank, is essential for maintaining consistency, strengthening oversight, and ensuring adherence to ethical financial principles.
Deputy Chairman of FRACE, Prof. Bashir Aliyu Umar, said the session was aimed at deepening collaboration between regulators and institutional advisory bodies, while addressing practical challenges affecting governance and compliance.
He commended the CBN for reviving the engagement platform, originally introduced in 2014, noting that sustained dialogue is key to improving regulatory effectiveness in the sector.
The forum also spotlighted the growing influence of Islamic fintech in broadening access to financial services, with experts calling for proactive regulation to balance innovation with risk control.
Technical sessions examined the implications of Shariah non-compliance on financial stability and explored how digital financial solutions can accelerate inclusion without compromising regulatory standards.
Stakeholders used the interactive platform to deliberate on capacity building, independence of advisory committees, and strategies to strengthen institutional resilience.
Closing the session, FRACE member Prof. Abdul-Razzaq Alaro urged participants to translate discussions into measurable reforms, stressing that the long-term impact of the engagement will depend on implementation across the sector.
With Nigeria positioning itself as a key player in Africa’s non-interest finance space, the CBN’s renewed focus on governance signals a broader effort to attract investment, enhance credibility, and future-proof the industry against systemic risks.
