The Central Bank of Nigeria (CBN) has raised questions over the growing use of “pay small small” and instalment-payment schemes by non-bank businesses, warning that the expansion of embedded finance is creating new regulatory and consumer-protection challenges.
CBN Governor Olayemi Cardoso, represented by Abiodun Okunola, Head of the Innovation Management Division at the apex bank, raised the issue during the Nigeria Fintech Week 2026 in Lagos.Read original
Nigeria Fintech Week was held from September 22 to 23, with embedded finance, lending, credit, regulation and other emerging financial technologies among the issues on the agenda.
CBN questions non-bank credit services
Cardoso, through Okunola, pointed to the growing practice of non-financial businesses incorporating financial products into their services.
He cited travel companies such as Air Peace and Wakanow, where customers can access options to pay for flights or travel packages in instalments.
“If you go to Air Peace and you try to book a ticket, you’ll see where they tell you where you want to pay ‘small small,’” he said.
He also referenced Wakanow, where customers booking international trips can be offered the option of paying for their travel expenses in instalments.
The CBN governor said such arrangements raise an important regulatory question because the companies providing the service are not traditional banks.
“Now, think about it: they are offering credit. For us, they are non-bank, they are not licensed to offer credit. How do we regulate?” he said.
What is embedded finance?
Embedded finance refers to the integration of financial services into non-financial businesses and platforms.
Instead of customers having to visit a bank or separate financial institution to obtain a financial service, the product can be offered directly within a platform they are already using.
In Nigeria, the model is increasingly being seen in areas such as travel, e-commerce, payments, lending and insurance.
The official Nigeria Fintech Week 2026 agenda identifies embedded finance and the API economy as major areas of discussion, alongside lending, credit, digital lending and consumer finance.
Consumer protection concerns
Beyond licensing, the CBN governor also raised questions about what happens when customers have complaints about financial products offered through non-bank businesses.
Cardoso said customers may not always know which regulator or institution to approach when their rights are affected.
“Because it means that when your rights are trampled there, if you come to CBN Consumer Protection and ask us, we’ll be like, ‘Who… are they even licensed?’” he said.
The concern highlights the potential difficulty of determining who bears responsibility when a financial product is delivered through a company that is primarily a travel, retail or other non-financial business.
‘Pay small small’ market continues to expand
The discussion comes as instalment-based consumer financing has become increasingly visible in Nigeria.
In August 2025, Nairametrics reported that Kalabash, a fintech subsidiary of Wakanow Group, partnered with Outpayce from Amadeus to integrate its Pay Small Small solution into the Amadeus Xchange Payment Platform.
The arrangement allows participating airlines and travel platforms to offer customers flexible payment options, with passengers able to make a down payment and spread the remaining balance over a period ranging from 24 hours to six months.
The expansion illustrates how credit and financing products are increasingly being incorporated directly into everyday purchases and services.
Digital lending already under tighter scrutiny
The CBN's concerns also come against the backdrop of increased regulatory attention on Nigeria's digital lending sector.
Nairametrics reported in September 2026 that 525 digital lenders had been registered with the Federal Competition and Consumer Protection Commission (FCCPC), while another 33 lenders had received registration waivers because they were already licensed by the CBN.
The report said the FCCPC's regulatory framework has also put greater emphasis on consumer protection, responsible lending and debt-recovery practices.
This means businesses operating within the wider consumer-credit ecosystem are facing increased scrutiny, even as new models continue to emerge.
AI, open banking and digital finance changing the sector
The CBN's concerns over “pay small small” are part of a broader regulatory challenge created by the rapid evolution of financial technology.
Cardoso identified developments including artificial intelligence, open banking, digital money, cross-border commerce and embedded finance as areas changing Nigeria's financial system.
The central issue is how regulation can keep pace with products that do not fit neatly into traditional categories of banking and financial services.
At Nigeria Fintech Week 2026, Okunola also emphasised the need for regulators and industry participants to work together as technology changes how financial services are delivered.
For consumers, the debate could ultimately determine how instalment-payment services are licensed, supervised and handled when disputes arise.
For businesses, it could mean greater clarity around the regulatory requirements for offering credit-like products directly to customers.
As “pay small small” continues to spread across travel, retail and other sectors, the CBN's latest comments suggest that the question of who is allowed to provide credit — and who protects the customer when things go wrong — is becoming increasingly important in Nigeria's evolving digital economy.
