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Top 5 Segments In Nigeria’s FinTech Industry


Nigeria is home to one of the fastest-growing FinTech industries in the world. Each year, it births new startups looking to disrupt the traditional financial system—or a part of it –and introduce innovative solutions that improve the quality of the country’s people.

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The development of FinTech in Nigeria hasn’t been even across its various niches. Some segments have expanded and gained more traction than others. This has happened partly due to the nature of the demand for financial technology products; the more widespread needs are being met first.

This article examines the top segments of Nigeria’s FinTech industry by their share of the country’s FinTech startup population.

Payments (Including Mobile Money Operators)

The payments space is by far the biggest of all the FinTech subsectors in Nigeria. Companies in this niche exist to make the transfer of money simpler, easier, and safer, typically via an electronic medium.

According to a Mckinsey report on Nigeria’s financial technology industry, payment companies constitute about 39% of all FinTechs in the country. The EY FinTech Survey (2020) says it’s closer to 43%. Both suggest that digital payments are the dominant niche in the FinTech industry.

SME payment solutions are the most common of the lot, with about 17% of financial technology startups belonging to this category. Consumer payments are a close second (17%), and solutions for Financial Services Providers (FSP) contribute only 3% of the total.

FinTechs catering to SMEs includes Interswitch, Flutterwave, Paystack, VoguePay, and ETranzact. Mobile Money Operators, such as Paga and TeamApt, are consumer-facing payment solutions.

Consumer Lending

Consumer lending companies provide loans over digital channels (websites or mobile apps) to individual borrowers. These businesses thrive because customers find them much easier to engage with than traditional lenders (e.g. banks).

Digital lending startups leverage advanced analytics to determine the creditworthiness of potential borrowers. This helps them to reduce the risk of loan defaults.

Startups in this category make up about 25% of FinTechs, according to McKinsey. The EY FinTech Survey puts the number at about 23%. Despite the already numerous players in this space, more continue to emerge. It does appear that there’s still plenty of room for new entrants into this sub-segment.

Consumer lending companies include Palmcredit, Sokoloan, New credit, Kiakia, and Carbon.

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Digital Banking

While they have only recently emerged, Nigeria’s digital banks have made inroads into the country’s market for banking products. They’re taking advantage of the convenience afforded by digital technology to attract and serve a mostly young, tech-savvy customer base.

Because they aren’t subject to some of the constraints that traditional banks face e.g. dependence on a physical presence or certain operational costs), they are often able to provide their customers with more attractive products (such as higher interest payments on deposits and better customer service).

Startups offering banking services (to varying degrees) make up about 23% of startups in the FinTech space, according to the EY FinTech Survey 2020. It’s worth noting that there’s some overlap between categories; some startups listed in this category also belong to niches like payments and mobile money.

Digital banks include Kuda Bank, Sparkle, Rubies, Eyowo, and Mint. There’s more on these companies in our article, Top 7 Digital Banks In Nigeria.

Savings And Investment

The ravages of inflation and the paucity of affordable investment opportunities have led to the emergence of tech-enabled savings and investment platforms. These solutions allow regular people to put away some of their income for future use, or grow their wealth by accessing various investment opportunities online.

Startups in this category have also helped numerous Nigerians become financially aware and literate, through updates on their social media channels and newsletters.

As of 2020, startups offering savings and investment products constituted about 11% of the total FinTech population, according to McKinsey. The EY FinTech Census estimates that it’s about 15%.

PiggyVest, Cowrywise, and CrowdyVest are among the most widely recognized startups in this space. Some InvestTech companies (Bamboo, Chaka, Trove) lets their users invest in local and foreign stock markets, while others (e.g. Rise) invests funds on their users’ behalf.

Enterprise Services And Infrastructure

Companies in this segment provide enterprise solutions for the financial sector, and software that enables businesses to manage their accounts and financial processes. They include financial service solutions, credit infrastructure, and API and connectors.

About 13% of FinTechs are in this category.

Examples of startups in the enterprise service and infrastructure niches are Accounteer, Mono, Okra, Swifta, Appzone, and Seamfix.

Final Words

Nigeria’s FinTech scene looks promising, despite the challenges involved in operating within it. The industry’s current form isn’t set in stone; new sub-segments may rise to meet the evolving needs of Nigerians. It will be interesting to see how this plays out.

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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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