Nigerian Journal of Banking and Financial Issues (NJBFI)

IMPACT OF FINTECH REGULATION SANDBOXES ON SME FINANCING: A CASE STUDY OF THE CENTRAL BANK OF NIGERIA’S FINTECH FRAMEWORK

Abstract

This study examines the impact of fintech regulatory sandboxes on SME financing using a qualitative case study of the Central Bank of Nigeria’s fintech regulatory sandbox framework. Anchored in Financial Intermediation Theory and Adaptive Regulation Theory, the study adopts a policy-oriented approach to analyze how sandbox design influences fintech innovation pathways, regulatory learning, and SME financing outcomes in a developing economy context. Drawing on regulatory documents, policy reports, and recent empirical literature, the findings show that regulatory sandboxes shape SME financing indirectly by enabling controlled experimentation with digital lending, alternative credit scoring, and embedded finance, while moderating innovation–risk trade-offs through supervisory oversight. The study further finds that sandbox participation enhances institutional credibility and market confidence, facilitating responsible scaling of fintech solutions relevant to SMEs. Overall, the paper contributes to fintech regulation and SME finance literature by demonstrating that regulatory sandboxes function as adaptive governance tools that align innovation with financial stability and inclusion objectives in emerging markets.