By | June 12, 2020.
Published by Peter Oluka.


Nigeria, Africa’s largest country by GDP and population, is among the continent’s fintech leaders with a lively crop of start-ups and a growing suite of digital offerings from mainstream banks.

Fintech revenues are forecast to reach an estimated US$543m by 2022, driven by increasing smartphone penetration and its unbanked population.

This was contained in the executive summary of State of play: Fintech in Nigeria, an Economist Intelligence Unit report, sponsored by Mastercard and MTN Group.

The report which examines key trends in the fintech sector in Nigeria and assesses both industry drivers and impediments to further growth, also combines extensive desk research and insights from interviews.

Partech; WeeTracker, report shows select funding rounds for fintech firms in Nigeria (2018-2019):

  • US$10m for Flutterwave, (payments platform)
  • US$10m for Paga (payments platform)
  • US$8m for Paystack (payments platform)
  • US$6.9m for Lidya (digital lending)
  • US$5.5m for TeamApt (digital banking and payments infrastructure)
  • US$20m for Migo (credit scoring service)
  • US$8.4m for Chipper Cash (cross-border money transfers)

According to the report, “Africa can lay claim to having laid the foundations of fintech with the mobile money revolution springing out of Kenya back in 2007.

“Today, it remains a front-runner in financial innovation: The number of fintech companies in Africa grew at an annual rate of 24% between 2009 and 2019, fuelled mostly by Nigeria, Kenya and South Africa”.

The Co-founder and CEO of Chipper Cash (which entered the Nigerian market in September 2019), Ham Serunjogi, describes the country as “one of the more mature fintech and tech markets in Africa. It has definitely been a pioneer and a leader on many fronts, with a lot of great companies.

“I’ve been impressed by how they’ve grown and the problems they’ve solved”. Fintech revenues are forecast to grow from US$153m in 2017 to US$543m by 2022, driven by expanding payment services, the e-commerce market and rising smartphone penetration”.

While unique subscriber penetration was at 50% in Nigeria at the end of 2019—less than peers like South Africa and Ghana—in absolute terms that still amounts to 100m unique subscribers. “That is South Africa, Kenya, Ghana and Cote d’Ivôire put together, which gives you an idea of the size of the market of mobile and the impact it could have on growth of tech services,” says the Senior Manager at GSMA Intelligence, Kenechi Okeleke.

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That number is forecast to rise to 130m by 2025.4 Nigeria also has around 128m active internet connections according to the Nigerian Communications Commission (NCC).

The report also sort to know What solutions are Nigerian fintech providers focusing on? How healthy is the broader ecosystem in terms of venture capital investment, skills and the regulatory environment? What are the key challenges and bottlenecks facing the country as its fintech sector matures?

Some of the key takeaways from the report are:

  • Nigerian fintechs are branching out from payments into lending, micro-investment, wealth management, peer-to-peer transfers and insurance.Payments and remittances are the most developed sub-sector to date.

State of play: Fintech in Nigeria, an Economist Intelligence Unit report, sponsored by Mastercard and MTN Group

The country has seen a surge of new and simplified apps to help merchants, businesses and consumers. Mainstream banks, initially slow to react to the digital era, have quickly adapted to offer apps and tools in areas like loans, while non-traditional players—including telecom companies and retailers such as supermarkets—are entering the finance space.

  • Nigeria’s regulatory environment balances innovation and consumer protection but must continually evolve to respond to market dynamics.The Central Bank of Nigeria has passed laws and regulations to promote digital payments and allow more actors to enter the space, boosting competitiveness and consumer choice. But it is balancing these with consumer protections through its cybersecurity framework and data protection regulation.


Recent reforms, such as easing entry of start-ups into the capital markets and the creation of a fintech sandbox, could also lead to an enrichment of the ecosystem. While there is no fintech-specific law as yet, a sector roadmap provides overarching direction to the industry. A legal framework may prove necessary to manage the emergence of new types of fintech and accelerate fintech solutions for “insurtech” and wealth management.

  • To develop and flourish, Nigerian fintech needs to address shortcomings in the broader ecosystem. While venture capital investment is forthcoming, the majority comes from abroad with Nigerian investors currently playing a small role. As the sector matures, skills gaps are emerging outside of product development in areas such as business management and marketing.


Given the challenges that fintechs in all markets are facing in terms of profitability, expertise in business management and corporate governance is needed. Some experts question whether fintech has truly moved the needle on financial inclusion, believing that it is easing financial transactions for those already in the system.

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But the jury is still out. Although a causal link with the rise of fintech is unclear, surveys conducted by Enhancing Financial Innovation and Access, a financial sector development organisation, reveal that the percentage of financially-excluded adults in Nigeria reduced from 41.6% in 2016 to 36.8% in 2018.

In her submission, the Senior Vice President, General Manager West Africa at Mastercard, Ebehijie Momoh said that the Fintech in Africa story is already one of the world’s greatest tech-success stories — Africa’s fintech industry is expected to be worth more than $3bn in 2020 (according to Ecobank research). And according to a 2016 study, The long-run poverty and gender impacts of mobile money, fintechs have lifted almost 200,000 households out of extreme poverty, and enabled almost the same number of women to move from subsistence farming into business.

“At Mastercard, we believe that fintechs are contributing to the rapid digital transformation that makes lives more convenient, simpler, and rewarding – especially across Africa.

Closeup of a hand holding phone and scanning qr code. Man hand paying with qr code. Customer hand making payment through smart phone and scan code. Selective focus – Image by TechKudi

“We firmly believe that fintechs, and subsequently financial inclusion can drive growth and prosperity. This is why we have pledged to bring a total of 1 billion people and 50 million micro and small businesses across the globe into the digital economy by 2025. As part of this effort, there will be a direct focus on providing 25 million women entrepreneurs with solutions that can help them grow their businesses.

“To further simplify the way we work with fintechs, in 2019 we launched Mastercard Accelerate, a global initiative that also gives them access to everything they need to grow quickly. Offering a simple, single entry-point to our company’s wide portfolio of specialized programs, Mastercard Accelerate gives start-ups and emerging brands support and assistance for every stage of their growth and transformation, from market entry to global expansion”.

Accelerate comprises a range of award-winning programs that have helped participants all over the world access and benefit from Mastercard’s ecosystem, customers and innovation comprising of Mastercard Fintech ExpressMastercard EngageMastercard Start Path and Mastercard Developers.

“I personally love what we are doing with Start Path where we invite later-stage startups to participate in a 6-month program, providing opportunities to scale and secure strategic investments. More than 200 companies have participated in the Start Path’s program since its founding in 2014 and those companies have collectively gone on to raise $1.5B in capital. Across Africa, over five African fintech’s including three from Nigeria have run through this programme including, Flutterwave, Netplus, Kasha, Mfarmpay, Lidya and Lipa Later”, Momoh said.

As Nigeria is rapidly progressing in the digital space – becoming increasingly more connected; “through our programs with fintechs”, she added, “we are bringing together an ecosystem of key players at different touchpoints. Together, we are delivering innovative digital solutions that have a far-reaching impact and realize the true potential of inclusive growth across the country. This is the future and we are here for it”.

You can read more about the report HERE and THERE.

Source: | June 12, 2020