**How to deal with regulatory risk in Africa: 3 compliance experts share insights**

[\\ Back to Kora Blog](https://www.korahq.com/blog) In Industry Insights # How to deal with regulatory risk in Africa: 3 compliance experts share insights March 18, 2025 March 18, 2025   Moyo Oluwatuyi Brand Storyteller Share Article [](https://www.facebook.com/sharer.php?u=https://www.korahq.com/post/how-fintechs-can-manage-regulatory-risk-in-africa/)[](https://www.linkedin.com/shareArticle?url=https://www.korahq.com/post/how-fintechs-can-manage-regulatory-risk-in-africa&title=How%20to%20deal%20with%20regulatory%20risk%20in%20Africa:%203%20compliance%20experts%20share%20insights)[](https://twitter.com/share?text=How%20to%20deal%20with%20regulatory%20risk%20in%20Africa:%203%20compliance%20experts%20share%20insights&url=https://www.korahq.com/post/how-fintechs-can-manage-regulatory-risk-in-africa/) # Table of contents - [The fundamentals of compliance and regulation](https://www.korahq.com/blog/how-fintechs-can-manage-regulatory-risk-in-africa#toc-the-fundamentals-of-compliance-and-regulation) - [Major regulatory bodies in Nigeria, Kenya, Egypt, Ghana and South Africa](https://www.korahq.com/blog/how-fintechs-can-manage-regulatory-risk-in-africa#toc-major-regulatory-bodies-in-nigeria,-kenya,-egypt,-ghana-and-south-africa) - [5 common regulatory compliance mistakes and how to avoid them](https://www.korahq.com/blog/how-fintechs-can-manage-regulatory-risk-in-africa#toc-5-common-regulatory-compliance-mistakes-and-how-to-avoid-them) - [The many shades of cross-border compliance in Africa](https://www.korahq.com/blog/how-fintechs-can-manage-regulatory-risk-in-africa#toc-the-many-shades-of-cross-border-compliance-in-africa) - [Conclusion](https://www.korahq.com/blog/how-fintechs-can-manage-regulatory-risk-in-africa#toc-conclusion) # Editor's note: ‍ This blog post is a part of an ebook we wrote on Compliance and Regulations 101. If you want to read the full ebook with all the insights on dealing with regulators and staying compliant, download the full ebook [here](https://www.korahq.com/compliance101). ‍ ‍ Regulators. ‍ Love them or hate them, you can't do without them. ‍ In South Africa, over half of all reported crimes were financial crimes ( [KPMG / FATF](https://kpmg.com/za/en/home/insights/2021/11/financial-crime-.html)). In East Africa, 63% of East African organisations experienced at least one type of fraud [(NASDAQ](https://www.nasdaq.com/global-financial-crime-report#:~:text=In%202023%2C%20an%20estimated%20%243.1,%2411.5B%20in%20terrorist%20financing.)). In 2023 alone, Nigerian banks lost $11.2 million to fraud ( [NIBSS](https://nibss-plc.com.ng/2023-annual-fraud-landscape/)). The reality of financial crimes in Africa is grim.  But if regulators didn’t do their jobs, the reality would be a lot grimmer. ‍ To build a pan-African fintech, you will deal with overlapping regulatory bodies across 54 countries. The stakes are high; non-compliance can result in hefty fines, licence revocation, a complete shutdown of operations, or, in extreme cases, legal consequences, including jail time. ‍ Understanding regulations is an essential ongoing responsibility as long as your company remains operational. ‍ This blog post provides a general overview of fintech regulation in Africa. Whether you're a citizen of an African nation or a foreign entrepreneur looking to [expand](https://www.korahq.com/blog/expansion-strategies-for-african-businesses), you'll gain insights into how regulators operate across the continent. ‍ ## The fundamentals of compliance and regulation Regulators play different roles in the fintech ecosystem. ‍ They define business practices, protect both fintechs and consumers, ensure currency stability, safeguard customer data, and drive specialised programs like financial inclusion in some countries. ‍ The role a regulator plays depends on the country. ‍ Regulators act as guardians in the ecosystem. They set the rules, enforce them, and penalise defaulters. This oversight is necessary; if no one does it, bad actors in the financial space would defraud and exploit consumers. > Enforcement serves two purposes. One is to punish the behaviour that regulators do not want to see. > The second reason is that it is a deterrent against other players in the industry that would want to participate in that behaviour. So once you understand the objectives and principles of a regulator. Their processes start to make a lot of sense to you. > **Marietta Gachegu, Global Head of Licensing, Chipper Cash** ‍ Licensing is one key way regulators safeguard consumers. ‍ Licences allow regulators to assess whether you as a fintech can provide the services you claim to offer. For instance, obtaining a Payment Service Provider (PSP) or banking licence in most African countries requires meeting specific capital requirements. These requirements ensure that the company has sufficient liquidity to manage fund movements. ‍ While regulators establish the rules and standards for business operations, compliance ensures adherence. Great companies turn compliance into a culture. Putting compliance first will save you a lot of trouble and money. ‍ So, if you’re building in Africa, which regulators should you speak to? ‍ We’ll talk about regulators in five major countries. There are different types of compliance but in this blog post, we’ll focus on financial crimes compliance. ‍ ## Major regulatory bodies in Nigeria, Kenya, Egypt, Ghana and South Africa The regulators you’ll engage with in any of these countries depend on the type of solution you’re building. However, this is a general overview of the fintech regulators in each country. ‍  ‍ ## 5 common regulatory compliance mistakes and how to avoid them ### 1\. Deprioritising compliance ‍ When it comes to compliance, ignorance isn’t bliss. It is huge fines. ‍ This knowledge gap is a significant problem, especially for early-stage startups. ‍ > One common mistake early-stage fintechs face is knowledge gap. A lot of people have ideas of what compliance is, or what compliance should be, rather than what it actually is. > **Sydney Okparaeke, Lead, Compliance, Kora** ‍ Early-stage startups usually want to stay lean due to a limited financial runway. As a result, they sometimes deprioritize compliance when, in fact, it should be a leading consideration when building a product. Sydney further explains: ‍ > There's this misconception that compliance is as simple as getting a Lawyer on the team, but that's typically wrong, and it causes a lot of problems as you scale. Also, there is a misconception that compliance is solely a cost centre so it’s better to avoid it. However, compliance can be a cost-saving centre if done well. ‍ Compliance and regulations can be tricky for first-time startups and founders. Instead of figuring it out yourself, it's often best to bring in an expert to help. These experts can: - Interpret regulations - Guide you on how to follow them - Advise on which licences to obtain - Identify the appropriate regulatory bodies to engage with ‍ ### 2\. Not staying up to date with regulations One reason regu