Fintech has been dramatically affecting the world’s financial landscape, including Nigeria. The country has risen to be a thriving center for fintech innovations. It had made multiple shifts that changed how people transact, evolving the country’s financial landscape.
Over 200 fintech companies are now operating in Nigeria. These include established institutions and startups, bringing different expertise and innovations to the country. They all contributed to the changes, but some are more apparent.
The CBN (Central Bank of Nigeria) must be mentioned when discussing the beginning of fintech’s explosion in Nigeria. In 2011, the Central Bank introduced cashless policies. These CBN policies aim to reduce the amount of cash in circulation while encouraging Nigerians to use electronic payments.
The pandemic further pushed the use of electronic transactions. Businesses looked for a way to allow customers to pay without physical meetings. Thus, technology became the viable solution for payments through proxy.
Due to the rise of cashless payment and the increase in demand, many local banks had no choice but to employ fintech cashless. It leads to banks providing both the conventional banking process and staying competitive in business by giving cashless transactions.
Following the cashless policies, the CBN introduced other guidelines and regulations for electronic payment channels in Nigeria. These also include transaction switching and a regulatory framework for mobile money services. These regulations helped reshape financial institutions’ operations and the Fintech industry. Thus, giving them more exposure as innovative payment systems.
Mobile banking options and electronic transaction methods are becoming more common in Nigeria. This affects various industries in the country, allowing businesses to reach more customers.
This includes the online gambling market. The growing demand calls for services like Hub88, which helps operators establish their online gambling sites more easily.
Operators can learn how casino aggregator works and quickly get their sites up and running. Operators can easily cater to a broad audience by supporting popular electronic payment methods.
Financial inclusion is one of the most apparent changes fintech has brought to Nigeria. Nigeria’s financial inclusion rate was low at 46.3% in 2010. That means 39.2 million of the adult population in Nigeria was financially unbanked. By partnering with other stakeholders, the Nigeria CBN created a strategy to decrease the total unbanked population to 20% by 2020.
Some strategies include implementing the Know Your Customer procedure, simplifying regulations, and allowing more people to meet formal verification criteria. It also devised and implemented a framework that regulates banking agents. They’ll provide opportunities to the unbanked in every part of the country.
The Consumer Protection Framework also helps increase clients’ confidence in the financial sector’s safety. CBN has also pursued cashless policies. It aims to lower costs and improve financial services and transaction accessibility.
Since 2020, over 20 million new bank accounts have been opened via fintech companies and traditional banks. This adds 63% to the total banked population in Nigeria, which is fairly close to the CBN’s target.
Financial services tend to provide more information about their innovations to ensure customers understand how to utilise fintech products. This can be in the form of seminars, conferences, or workshops. Customers can learn why fintech can be beneficial for them. This literacy sensitization can also make customers more aware of what’s happening in the financial industry. So, they know how to leverage the information.
Fintech’s entry into the market improves customers’ financial literacy. It also educates operators and gives them more opportunities. These programs can provide operators with more information regarding the growth in the financial sector, which can be crucial for their operations.
Some educational programs aim to provide information to investors. They introduce the financial landscape in Nigeria. Investors would then learn how to leverage fintech when investing in local businesses.
Fintech’s entry means a new field will be introduced to the country. More companies are launching throughout the country, creating more job opportunities. Some of the occupations fintech may require include:
Another popular job opportunity is that of a local business agent. These agents utilise fintech innovations, such as POS (point of sale) machines, to bring banking to rural areas.
Many job opportunities are opening, contributing to Nigeria’s unemployment rate. Fintech fostered a more robust workforce while contributing to the local economy.
The entry of fintech startups and established companies open more investment opportunities. Nigerian fintech startups raised a whopping $536,655,000 in 2021, contributing significantly to all startup funding during that period.
Fintech investment in Nigeria is attractive to many investors. This is why Nigerian fintech startups thrived despite the global slowdown in startup funding in 2022. At the time, they secured nearly half a billion dollars in investment. This influx of capital from investors can serve as a means of further economic expansion. It can inject vitality into the Nigerian economy and trigger more innovations.
With the high population and increasing fintech demands, there’s ample room for expansion. As more innovations enter the country and evolve to meet customers’ needs, they can drive Nigeria’s economic prosperity and inclusive growth.
In the long run, fintech is highly likely to attract foreign investment. If more fintech innovations put Nigeria on the map as a potential centre for technology and business, it can lure more foreign investors.
What is Nigeria’s National Fintech Strategy?
The National Fintech Strategy is a public policy document framing the core problem, the goal of the strategy, and the vision for the goal of the Fintech ecosystem in Nigeria in the national context. It sets the policies’ scope, regulations, and reforms in alignment with other financial and non-financial policy objectives.
How Does Fintech Impact Traditional Banking?
Financial inclusion is one of fintech’s positive impacts on traditional banking. It can reach unbanked and underbanked populations, allowing previously out-of-reach areas to gain access to financial services.
Which Bodies Regulate Fintech in Nigeria?
There are several primary regulatory bodies for fintech in Nigeria. The main regulatory body is CBN, but there are also: