In January 2021, the Central Bank of Nigeria (“CBN”) issued the Framework for Regulatory Sandbox Operations  (the “Framework”), which provides for the establishment of a regulatory sandbox in Nigeria and the rules guiding its operations. In our  previous newsletter  on the establishment of the Framework, we highlighted the application process for admission into the sandbox.

In view of the foregoing, the CBN has issued a notice to participants in the financial sector to submit expressions of interest to participate in the sandbox (“Invitation”).

Today's newsletter briefly highlights the application procedure as well as the eligibility criteria for admission to the Sandbox  in view of the CBN's Invitation.

1. What is the CBN's Regulatory Sandbox?

The CBN's regulatory sandbox is a process established by the CBN for companies involved in the provision of financial technology to conduct live tests of new, innovative products, services, delivery channels, or business models in a controlled environment, with appropriate regulatory oversight. It enables the CBN to remain well-informed about innovations in the financial services sector and ensure consumer protection while promoting innovation.

2. Who is Eligible for admission into the Sandbox?

According to the Invitation, all entities with innovative financial solutions are eligible to apply for admission into the Sandbox, including existing CBN-licensed institutions. The CBN will, however, consider the following criteria when selecting candidates for the sandbox:

  1. the product, service or solution (“Product”) must be innovative with a clear potential to improve the accessibility, security and quality of financial services. It should also address gaps in, or provide new opportunities for financial benefits or investment in, the Nigerian economy;
  2. the applicant should be able to test the Product within the transaction value and volume limit approved by the CBN;
  3. the applicant should have conducted an adequate assessment of the functionality, usefulness and inherent risks of the product. In addition, the risks of the product should not affect existing financial structures and consumer experience;
  4. the applicant is required to possess the requisite resources and expertise to support the testing of the Product in the Sandbox and mitigate potential risks; and
  5. the applicant must present a business plan showing that the Product can be successfully deployed after exiting the Sandbox.

3. What is the Application Process?

  1. Submission of the Required Documents: The Invitation requires applicants to complete an online form and provide the following documents to the CBN:a board resolution approving the application;
    1. the incorporation documents of the Company:
    2. the Company's profile;
    3. the resumes of the members of the board of directors and management team of the Company;
    4. the business plan of the Company;
    5. the Company's AML/CFT Policy; and
    6. patent certificates or evidence of patent registration (where applicable) and other documents.
  2. Acknowledgement and Evaluation of Applications Successfully submitted applications will be acknowledged by the CBN following which an applicant is to be informed of the approval or rejection of its application within 60 working days after the deadline for the submission of applications.
  3.  Approval of Application Upon approval of an application, a Letter of Approval will be issued to the entity by the CBN, authorizing the applicant to test its Product within the Sandbox. It is important to note that approval to participate in the Sandbox does not guarantee a license from the CBN. Upon a successful exit from the regulatory sandbox however, the CBN will provide regulatory support on a case-by-case basis.

4. What is the Deadline for the Submission of an Application to the CBN?

Applicants are required to submit an application to be admitted to the Sandbox on or before 1st February 2023.


As the principal regulator of the Nigerian financial sector, it is vital that the CBN remains at the forefront of financial innovation and by extension, financial regulation. Therefore, the CBN's Sandbox is a welcome development as it will help the CBN remain informed about new products within the sector. It is hoped that the CBN's invitation to the public will encourage players within the Nigerian financial space to participate in the CBN's Sandbox programme.

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