Nigeria is the largest economy in Africa in terms of nominal GDP, and 26th in the World according to the IMF World Economic Outlook. Being the continent’s largest unbanked population, with a population of 200 million—40 percent of which is financially excluded, and digitally savvy, middle-aged and young affluent individuals, Nigeria’s FinTech space is worth looking into. Regulatory drive to increase financial inclusion, youthful population, and increasing smartphone penetration are combining to create a thriving fintech sector in Nigeria. With over $9 billion in value, the banking industry in Nigeria remains an attractive sector. The majority of consumers are unbanked, underbanked, and underserved. Lack of access to services, especially in rural areas, issues of poor user experience, and affordability contribute to the frustration consumers experience. FinTechs have swiftly taken advantage of these lapses. Payment-focused solutions have surged over the past years, with many FinTechs ramping up their ambition to develop better consumer experience across the value chain to address pain points. Activities in FinTech are expanding into quick loans, flexible investments and savings, and affordable payments, among others. In investments, consumers seek convenient means to earn better domestic returns on investment and gain access to offshore investments. FinTechs are helping to democratize consumer options by offering flexible products with attractive interest rates and costs propositions.
Below is a summary of Nigeria’s thriving FinTech scene
- The number of FinTech grew from 74 in 2017 to 200 in 2021
- FinTechs raised more than $600 million in funding between 2014 and 2019
- FinTechs raised 25% ($122 million) of $491 million raised by African tech startups in 2019 – followed by Kenya’s $149 million
- FinTechs raised $439 million in 2020. (20% of the amount raised by all African tech startups)
- 57% of funding from overseas
- FinTechs genreated $293.2 million in first quarter of 2021
- Revenues are estimated to reach $543 million by 2022
- Nigeria ranks number 8 of 154 countries in the use of cryptocurrency
- The world’s 2nd largest Bitcoin trader in Paxful (60,215 Bitcoins in the last five years, with over 20,500 coins in 2020 alone)
FinTech Categories
1. Payments, Mobile Money & Digital Banking (38% of FinTechs)
Sub category: Wallets, Remitance, Merchant service providers, processors
2. Lending (23% of FinTechs)
Sub category: Retail Lending, Lending infrastructure, MSME lending
3. Savings & Investment (15% of FinTechs)
Sub category: Savings, Wealth management
4. Services and Infrastructure (13% of FinTechs)
Sub category: Financial institution tech, Personal finance, Merchant solutions
5. InsurTech (3% of FinTechs)
Sub category: Marketplaces, Infrastructure
6. Cryptocurrency (8% of FinTechs)
Sub category: P2P marketplaces, Exchanges and wallets, Crypto payment services
Mobile Money
“Our Mobile Money service to Nigeria is currently unavailable” is a familiar message for Nigerians trying to access the continent’s cross-border payment services, especially mobile money services. Thankfully, mobile money in Nigeria is on the rise. People can simply walk into any mobile money agent kiosk to perform a wide array of transactions previously restricted to banking halls.
However, unlocking the continent’s largest unbanked population, Nigeria, may hinge on granting access to the telecom sector.
See Mobile Money and Monetary Policy in Nigeria.
“Mobile money .. is not just a cool app. It’s a killer app, the first for mobile phones in the developing world. It took 115 years for banks to provide their customers with 43 licensed commercial banks, 1,045 bank branches and 1,500 ATMS; in roughly 5 years, Safaricom has provided its customers with more than 30,000 M-PESA agents, where people can transform cash into e-money or e-money into cash.” – Money, Real Quick: The Story of M-PESA (2012)
We believe as the government accelerate the financial inclusion agenda and drive favorable policies promoting financial inclusion, and growth in infrastructure supporting mobile payments, FinTech will enjoy exponential growth.
To get a comprehensive fintech report, kindly email us – hello@techassembly.co
About TechAssembly
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TechAssembly is a technology development company that works on digital transformation, tech skill acquisition, and tech talent acquisition. TechAssembly specializes in communication solutions across economic technology, FinTech, commerce for organizations.
Our clientele includes funded start-ups and SMEs, some of which are within and outside Africa.
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