Framework for Regulatory Sandbox Operations

The CBN's Framework for Regulatory Sandbox Operations, issued on 12 January 2021, establishes a supervised testing environment in which firms can conduct live trials of innovative financial products, services, delivery channels and business models under regulatory oversight and within defined limits. The sandbox is a core tool of the CBN's fintech strategy, intended to promote responsible innovation, deepen financial inclusion and allow the regulator to understand emerging technologies before they scale. The framework applies to both existing CBN licensees and to start-ups and other innovators (including those without an existing licence) whose proposed solution relates to the payments system or other CBN-regulated financial activity. It sets out eligibility criteria, genuine innovation, demonstrable benefit to consumers or the financial system, readiness for testing, and need for the sandbox, and a structured application, evaluation, testing and exit process. Admitted participants operate under bespoke test parameters: limits on customer numbers, transaction values and duration, together with safeguards such as consumer disclosures, data-protection measures, risk-management controls and exit/redress plans to protect testers and their customers. The CBN may grant time-bound regulatory reliefs or modifications to enable testing while retaining supervisory control. On successful completion, a participant may proceed to full authorisation; unsuccessful or non-compliant tests are exited. Governance is administered by the CBN (with the Nigeria Inter-Bank Settlement System supporting administration), which monitors tests, collects data and reports outcomes. The framework also prescribes how consumer data and information generated during testing are collected, stored and protected. By creating a controlled pathway from innovation to authorisation, the sandbox shapes how new fintech enters the regulated Nigerian market.

1. 1Creates a supervised live-testing environment for innovative financial products under CBN oversight
2. 2Open to existing CBN licensees and to unlicensed innovators/start-ups in payments and CBN-regulated activity
3. 3Eligibility based on genuine innovation, consumer/financial-system benefit, test-readiness and need
4. 4Bespoke test parameters: limits on customers, transaction values and duration, with consumer safeguards and exit/redress plans
5. 5Time-bound regulatory reliefs available during testing; successful exit can lead to full authorisation
6. 6CBN (with NIBSS support) administers monitoring, data collection and consumer-data protection during tests