Money lost to fraud in Nigeria’s banking system has nearly tripled over the past five years, according to an analysis released by the Nigeria Inter-Bank Settlement System (NIBSS).

NIBSS estimated that N52.3 billion was lost to fraud in 2024, compared to 11.6 billion in 2020.

The report also indicated that fraudsters illegally attempted to obtain N86.4 billion in 2024.

These figures were reported shortly after the latest GDP statistics showed a fourth-quarter growth of 3.8 per cent, the highest rate in three years, primarily fueled by the services sector, which includes finance and insurance.

Nigeria’s digital payments system is considered one of the strongest in Africa, and tech startups in the nation secured approximately $400 million in funding in 2024.

Such financial services have gained greater significance recently due to a cash shortage and currency reforms, which have driven more users to abandon physical banknotes.

“The amount lost to fraud has increased over the past five years along with the growth of financial transactions in the digital payments sector,” NIBSS said.

Reports indicated that fraudsters are employing various tactics, including the conversion of funds into gift cards and the establishment of accounts using the stolen identities of elderly individuals, minors, and foreigners.

The report suggested that N400 million had been deposited into accounts created with the stolen identities of senior citizens.

NIBSS noted that some funds have been retrieved, and bank employees involved in the fraud are under investigation.

Nigeria is classified as a “grey list country” by international watchdogs, alongside nations such as South Sudan, Bulgaria, Monaco, and Croatia, due to weaknesses in its measures against money laundering and financing terrorism.

Economic and Financial Crimes Commission (EFCC) has also apprehended multiple foreigners concerning internet fraud. In December, the agency took into custody 792 suspects in the upscale Victoria Island region of Nigeria’s central city, Lagos.

According to the agency, at least 192 suspects were identified as foreign nationals, with 148 being Chinese.

Dele Oyewale, spokesman, EFCC, said in a press release that foreign criminal organizations recruit Nigerian partners to target victims online through phishing schemes, primarily focusing on individuals in the United States, Canada, Mexico, and various European nations.

MTN Group Fintech, described as Africa’s leading mobile financial services provider, has appointed Network International, an enabler of digital commerce across the Middle East and Africa (MEA), as its partner for Payment Processor – Issuing.

This partnership, said that the two companies, marks a significant extension of Network’s portfolio of issuer processing collaborations throughout the African continent.

The partnership will focus on rolling out card issuance products across key MTN Fintech markets, starting with Rwanda which is already operational.

Soon, Uganda, Cote d’Ivoire and Nigeria will also be covered by this collaboration.

Network International says it will provide a comprehensive range of services, including transaction processing, card management and online fraud prevention.

It added that MTN Fintech users will benefit from a seamless experience accessing both traditional mobile services and innovative digital payment solutions.

With a footprint spanning over 50 countries and serving over 250 financial institutions, Network International said that it brings its expertise to a partnership that will enhance MTN Fintech’s cutting-edge mobile services and provide even greater value to stakeholders and customers across Africa.

MTN Group provides voice, data, fintech, enterprise wholesale and API services to more than 288 million customers in 14 African markets.

Dr. Reda Helal, group managing director – Processing, Africa and Co-Head Group Processing at Network International said: “Our collaboration with MTN Group Fintech marks a major milestone for our outsourced payments services in Africa. It demonstrates our ability to successfully serve mobile network operators via our fully-fledged processing solutions and our continued dedication and commitment to the African region.”

Cedric N’guessan, executive for Payment and E-commerce at MTN Group Fintech, added: “This collaboration with Network International is pivotal in enhancing financial inclusion across Africa and beyond. It enables our customers to actively engage in the global economy, aligning perfectly with our strategic goals alongside Mastercard to broaden access to digital financial services across the continent.”

The Nigeria Deposit Insurance Corporation (NDIC) has emphasised the need for greater collaboration with legal professionals to enhance the liquidation and debt recovery processes following bank failures.

Bello Hassan, Managing Director/Chief Executive Officer, stated this while speaking at the sensitisation seminar for external solicitors in Lagos.

He highlighted the role of external solicitors in ensuring the smooth resolution of failing financial institutions, particularly in the aftermath of Heritage Bank’s collapse.

Hassan, who was represented by Henry Fomah, the Head, Legal Department, NDIC, noted that bank liquidation is inherently tied to litigation, requiring extensive legal expertise to recover debts, resolve creditor claims, and maximise asset realisation.

He said: “The recent failure of Heritage Bank, highlighted the intricate nature of bank liquidation and the vital role of collaboration with our external solicitors. Liquidation, by its nature, is intertwined with litigation.

“The NDIC, in fulfilling its responsibilities, engages in legal proceedings both as plaintiff and defendant, representing the interests of depositors and creditors while also pursuing debt recovery from debtors of closed banks. The recovery of these debts and the realization of assets are crucial to achieving our corporate objectives.

“Beyond paying the insured sums to depositors from the Corporation’s deposit insurance funds (DIF), the NDIC is as liquidator is also obligated to settle uninsured portion of deposits and all legitimate creditor claims from the realised assets of the insured institution in-liquidation.

“I am pleased to report that the Corporation has consistently fulfilled this responsibility, a success largely attributable to our collaborative partnerships, including the invaluable contributions of our external solicitors. While we acknowledge the challenges some of you have encountered during litigation, we urge you to continue your diligent efforts in assisting the Corporation with debt recovery and asset realization.

“The NDIC deeply values its stakeholders as essential partners in achieving its corporate objectives. We actively seek your continued collaboration and support in promoting financial system stability through a deeper understanding of the dynamics of the Deposit Insurance System in Nigeria. The consistent support we have received from our external solicitors is evident in the impressive attendance and active participation at previous seminars.”