Nigeria is home to 200+ FinTechs, whose activities are primarily focused on payments with increased activities in the lending and savings space. This is according to a series of reports from research firms Mckinsey, the Economic Intelligence Unit (EIU) and Elfina seen by MoneyCentral.
The country which is Africa’s largest economy has received $560 million in Fintech funding over the past 3 years, with the top sectors by number of players being payments at 39 percent, lending at 28 percent and savings at 11 percent.
Nigeria’s Fintech sector is thriving because of a youthful population, increasing smartphone penetration, plus a focused regulatory drive to increase financial inclusion and cashless payments.
Between 2017 and 2019, Nigeria’s bustling fintech scene raised more than $500 million in funding and attracted 25 percent ($122 m) of the $491.6m raised by African tech startups in 2019 alone—second only to Kenya, which attracted $149 million.
Nigeria is now home to hundreds of fintech standalone companies, plus a number of fintech solutions offered by banks and mobile network operators as part of their product portfolio.
Nigeria offers significant opportunities for fintechs across the consumer spectrum, notably within SME and affluent segments and, increasingly, in the mass-market segment. Fintech is still relatively young.
The country is Africa’s largest economy and with a population of 200 million—40 percent of which is financially excluded.
Findings from the reports show that there is significant potential for further growth as Fintech accounted for only around 1.25 percent of retail banking revenues in 2019.
Nigerian fintechs are branching out from payments into lending, micro-investment, wealth management, peer-to-peer transfers and insurance, according to the Economist Intelligence Unit (EIU).
The regulatory environment balances innovation and consumer protection but must continually evolve to respond to market dynamics. To develop and flourish, Nigerian fintech needs to address shortcomings in the broader ecosystem such as, (profitability, expertise in business management and corporate governance).
Payments and remittances are the most developed sub-sector, as Nigerian fintechs are expanding into lending, Mobile lending, Digital Banking, Wealth Management & Insur-tech
Fintech in Nigeria are also leveraging on their potential to drive financial inclusion.