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  Nigeria’s FinTech sector is probably the most celebrated segment of the country’s tech ecosystem. There are many reasons for this. Companies in this industry are making financial transactions easier for people; they’ve also received investor backing worth hundreds of millions of dollars.
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But there’s a lot more going on in that space than just funding rounds and the processing of huge volumes of payments. People conversant with Nigerian FinTech will tell you that it’s a revolution with a lot of promise. This article presents some interesting facts about FinTech in Nigeria. Taken together, these facts are effectively a summary of the sector’s essential features and the progress that it’s made so far.

Facts About The Nigerian FinTech Industry 

Here are ten facts about Nigerian FinTech that you may find interesting.

There Are Over 200 FinTechs In Nigeria

According to an EFInA (Enhancing Financial Inclusion and Access) report, there are between 210 and 250 FinTechs in Nigeria. The exact number is not known, and multiple startups in this category spring up or disappear every year. There are also several FinTech solutions offered by banks and telcos.

The FinTech Sector Is More Than Two Decades Old

The EFInA opines that companies in the sector may be grouped into three sub-categories concerning when they appeared and the sort of services they typically provided. The first is FinTech 1.0, which consists of firms like Interswitch, eTranzact, and SystemSpecs. They are oriented towards B2B service provision. These companies were founded in the 2000s. Then there’s FinTech 2.0, which includes companies like Paystack, Flutterwave, Paga, and PiggyVest. Established between 2007 and 2018, these firms have helped to drive mobile payments. Many of them are B2C brands. Finally, there’s FinTech 3.0, embracing platforms that offer a full suite of services. These include platforms like OPay and Palmpay. These have arisen in the last few years.

The Sector Is Multi-Niched

Segments of the FinTech industry include payment processing, insurance technology (InsurTech), blockchain, cryptocurrencies, digital wealth management, crowdfunding platforms, and stock trading, among others.

Almost 40% Of Nigerian FinTechs Are Payment Companies

Payment companies are the most common type of FinTech in Nigeria, constituting about 39% of businesses in the country. Lenders are the second-largest niche, with about 28% of platforms belong to this category.
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The dominance of these two niches is a response to the high demand for the services they provide. The popularity of savings platforms also points to a growing recognition of the importance of wealth accumulation among educated, tech-savvy Nigerians. About 11% of FinTech startups in Nigeria may be placed in this sub-segment.

Nigerian FinTechs Raised $600 Million Between 2014 and 2019

Investors have recognized the enormous potential that lies in this space; the startups here could take a significant slice of Nigeria’s financial services industry, which could eventually be worth $50 billion. With over 60 million people unbanked, FinTechs have a large market to reach, and plenty of growth potential. Between 2014 and 2019, investors poured in about $600 million into the sector. Some of the more impressive funding secured by companies in the space include OPay’s $50 million and $120 million capital raises, Palmpay’s $40 million seed round, all of which came in 2019.

Nigeria Is Home To Two FinTech Unicorns

Thus far, Nigeria has minted two FinTech unicorns. Interswitch attained this status in 2019 after Visa, an international payments giant, took a 20% stake in Interswitch for $200 million—effectively valuing the company at $1 billion. And in 2021, Flutterwave became a unicorn following a $170 million investment that also valued it at over $1 billion.

About 22% of Nigeria’s Top Fintechs Have A Female Co-Founder

Women are playing an increasingly important role in the development of Nigerian FinTech. More startups in the space have female founders or cofounders. Also, 49% of executives in the country’s top 50 FinTechs are women, according to the EFInA.

Lagos Is At The Heart Of Nigeria’s FinTech Ecosystem

Lagos State is home to most of Nigeria’s financial technology companies. According to Asoko Insights, about 90% of the top players in the industry are headquartered in Lagos; most of the remaining 10% are located in Abuja. Not surprisingly, Lagos also has the highest adoption of FinTech products in the country, with about half the population of its youth and lower-middle-income earners using platforms of this kind.

Referrals Are The Biggest Driver Of FinTech Adoption

Interestingly, 55% of people who use financial technology products say they were introduced to those solutions by a friend.  Providers of savings, accounts, and wallet services have received the most referrals. Women have been particularly active on this front. About 65% of women in Lagos say they heard about these products from a friend.

Customers Value Access And Convenience

Most people who use a FinTech platform say they were attracted to it because of its convenience and the access to financial services that it grants them.

Final Words

We can expect the FinTech industry to expand and strengthen in the coming years. As this happens, this space could become more innovative; processes will become more efficient, and it will drive change in the financial services sector. Hopefully, this will accelerate Nigeria’s economic growth. Featured Image Source: Nairametrics
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This article was first published on 22nd April 2021


Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.

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