By Peter Egwuatu
Pricewaterhouse Coopers, PwC has stated that Fintechs is key and crucial to bridging the financial inclusion gap in Nigeria and other African countries where the informal sector remains predominant in their economies.
According to the PWC 2019 Global Fintech Report: “Fintech investment in Africa is likely to be valued at $3 billion by 2020, with South Africa, and Nigeria receiving a significant portion of these investments.”
The Economist Intelligence Unit launched a report titled State of play: Fintech in Nigeria, sponsored by Mastercard and MTN Group. The report examines the key trends in Nigeria’s fintech sector and assesses both industry drivers and impediments to further growth.
The report noted that Nigerian fintech is branching out from payments into lending, micro-investment, wealth management, peer-to-peer transfers, and insurance.
“Payments and remittances are the most developed subsector to date. 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.
“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” the report emphasised.
According to Mastercard, “As a global fintech leader, Mastercard is proud to support Nigeria and the rest of Africa in digitization efforts for a more inclusive economy. At Mastercard, we believe that fintech are contributing to the rapid digital transformation that makes lives more convenient, simpler, and rewarding – especially across Africa.”