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Nigeria has a large unbanked and underbanked population, with limited access to traditional financial services. According to a 2020 survey by EFInA (Enhancing Financial Innovation & Access), only 39.7% of Nigerian adults have access to formal financial services, while the majority still rely on informal means of savings and credit. In a recent survey, it has increased to a meagre 40%. This presents a significant opportunity for FinTech startups to bridge the gap and provide innovative solutions that cater to the financial needs of the underserved population. This article, therefore, discusses the ideal startups for Nigerians and how to develop them.
Provide Seamless Remittance Solution
One type of FinTech startup that Nigerians want is those that focus on digital payments and remittances. Nigeria has a high rate of remittances, with millions of Nigerians living abroad and sending money back home to support their families. However, the traditional remittance process can be costly, slow, and cumbersome. FinTech startups that offer affordable, convenient, and fast digital remittance services can greatly improve the lives of Nigerians and their families.Nigerians Want Credits and Loans
Another type of FinTech startup that Nigerians want is those that provide access to credit and loans. Many Nigerians, especially small business owners and individuals in rural areas lack access to formal credit due to the strict requirements of traditional financial institutions. FinTech startups that leverage alternative data sources, such as mobile phone usage and transaction history, to assess creditworthiness can fill this gap and provide affordable and accessible credit options to the underserved population.Nigerians Want To Wealth
Investment and wealth management FinTech startups are also in demand in Nigeria. The country has a growing middle class with increasing disposable income, and more Nigerians are seeking opportunities to invest and grow their wealth. FinTech startups that provide easy-to-use investment platforms, robo-advisory services, and financial literacy programs can empower Nigerians to make informed investment decisions and grow their wealth over time.Provide Innovative Insurance Solutions
Furthermore, FinTech startups that offer insurance solutions are highly sought after in Nigeria. Insurance penetration is low in the country, and many Nigerians do not have access to affordable insurance coverage for their businesses, homes, or health. FinTech startups that provide innovative insurance products, such as microinsurance or usage-based insurance, can democratize access to insurance and offer affordable and customized coverage options to Nigerians.Develop With Local Content In Mind
To go about creating the FinTech startups that Nigerians want, it is crucial to understand the local market and consumer behaviours. Conducting market research to identify the specific pain points and needs of Nigerians when it comes to financial services is critical. This could involve surveys, focus groups, and interviews with potential customers to gather insights into their financial behaviours, preferences, and challenges. Understanding the regulatory environment and compliance requirements is also crucial to ensure that the FinTech startup operates within the legal framework and avoids any regulatory hurdles.Sign up for the Connect Nigeria daily newsletter
A User-Friendly Product Is Key
Once the market research is done, the next step is to design a user-centric product or service that addresses the identified pain points. This may involve leveraging technology such as mobile apps, online platforms, or artificial intelligence to provide a seamless and convenient user experience. User testing and feedback loops should be incorporated into the product development process to continually refine and improve the solution based on user needs and preferences.Nigerians Want A Brand They Can Trust
In addition to product development, building trust and credibility with customers is essential for FinTech startups in Nigeria. Nigerians can be wary of new financial services providers, given the prevalence of scams and fraudulent activities in the country. Therefore, incorporating robust security measures, such as encryption, two-factor authentication, and data protection, is crucial to safeguard customer information and building trust. Obtaining necessary licenses and certifications, as required by the regulatory authorities, can also enhance credibility and legitimacy in the eyes of customers.Affordability and Accessibility
Another important aspect of creating FinTech startups that Nigerians want is to ensure affordability and accessibility. The target market for many FinTech startups in Nigeria is the underserved population, including low-income individuals, small business owners, and those in rural areas. Pricing models should be transparent, affordable, and competitive to attract and retain customers. Moreover, the solution should be accessible through multiple channels, including mobile phones, which are widely used in Nigeria, to reach a broader customer base.A Brand With Structures
Furthermore, partnerships and collaborations can be key to the success of FinTech startups in Nigeria. Collaborating with established financial institutions, telecom companies, or other relevant stakeholders can provide access to resources, expertise, and a wider customer base. Partnerships can also help navigate regulatory requirements and compliance, which can be complex in Nigeria’s financial ecosystem.Financial Literacy Is Key To Nigerians
Education and financial literacy are also critical components of creating FinTech startups that Nigerians want. Many Nigerians may be unfamiliar with digital financial services or lack basic financial literacy skills. Incorporating educational elements in the FinTech solution, such as financial literacy programs, tutorials, or customer support, can empower users and build trust. Educating potential customers on the benefits of FinTech solutions, how to use them safely, and the value they can provide can help drive adoption and usage.Customers Want To Be Kings
Additionally, customer service and support are essential in building customer loyalty and retention. Offering prompt and reliable customer support through multiple channels, such as chatbots, helplines, or in-person assistance, can enhance the overall customer experience and satisfaction. Addressing customer queries, concerns, and issues in a timely and efficient manner can help build a loyal customer base and promote positive word-of-mouth. Nigerians don’t joke about how you treat them.Keep Broadcasting Your Brand
Lastly, marketing and promotion play a crucial role in creating the FinTech startups that Nigerians want. Building brand awareness, generating interest, and acquiring customers require effective marketing strategies. This may involve leveraging digital marketing channels, such as social media, search engine optimization (SEO), content marketing, and influencer partnerships, to reach and engage with the target audience. It is important to craft compelling and relevant marketing messages that highlight the value proposition of the FinTech solution and resonate with the target customers.Register to attend the CN Business Mixer
Final Thoughts
Creating FinTech startups that Nigerians want requires a deep understanding of the local market, consumer behaviours, and regulatory environment. Digital payments and remittances, credit and loans, investment and wealth management, and insurance are some of the areas with high demand in Nigeria. Designing user-centric, affordable, accessible, and secure solutions, building trust and credibility, fostering partnerships, promoting financial literacy, providing excellent customer service, and implementing effective marketing strategies are key components of a successful FinTech startup in Nigeria. By addressing the specific needs and challenges of Nigerians, FinTech startups have the potential to drive financial inclusion, economic growth, and improved financial well-being for individuals and businesses alike in the country. Featured Image Source: FinTech PadGot a suggestion? Contact us: editor@connectnigeria.com
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