Nigeria has a mixed economic system, which includes a variety of private organisations, combined with centralised economic planning and government regulation. The economy has experienced downturns in recent times, yet there are certain industries that keep finding innovative ways to make substantial profits and improve the economic climate.
One of such industries is the financial technology sector. Financial technology, or fintech, is a combination of technology that enhances personal and commercial financial operations through mobile payment applications, digital banking, and investment apps.
The Nigerian financial market has more than 200 fintech companies that provide services through quick loans, flexible savings, seamless payments and e-commerce.
The cashless policy, introduced by the Central Bank of Nigeria in 2012, sought to encourage the use of electronic payments, which aided the rapid growth of the fintech industry.
Further, long queues at the banks and the man-hours expended to pay or transfer funds were a major challenge for the traditional banking system. Other issues banks face include weak capital base, political risk and poor governance. The lack of access to physical services during the Coronavirus Disease crisis escalated the problems of traditional banking models and showcased the potential of the sector.
COVID-19 has largely vanished from public discourse, but disrupted the financial system. Hence, the fintech industry created several channels to render services to customers across Africa and beyond.
Over the years, Nigeria has been a pioneering startup ecosystem, not only leading the way in various sectors, but also proven to be an attractive investment spot on Africa.
Between 2014 and 2021, Nigeria’s booming fintech space raised over $600m in funding, attracting 25 per cent ($122m) of the $491.6m raised by African tech startups in 2019 alone – a figure higher than any other country.
In addition to these statistics, the fintech industry accounts for 15 per cent of all banking revenue in the nation. It is also a key driver of financial inclusion.
One of the biggest benefits of fintech is that it dramatically increases the efficiency and speed of financial transactions. Mobile payments can be processed in a fraction of the time it takes for traditional methods like debit or credit cards.
Fintech has also fostered growth by creating many job opportunities. For example, data scientists, app developers, cybersecurity experts and data analysts are in demand jobs. Other examples are the local business agents who utilise fintech innovations, such as the Point of Sale machines, to bring banking to the rural areas, thus reducing the unbanked populace in Nigeria.
Overall, fintech is transforming the financial sector, making financial services more accessible, convenient and affordable for people and businesses around the world.
Notable fintech organisations include Optimus by Afrinvest, Interswitch, Piggyvest, Paystack, Flutterwave, Paga and e-Tranzact.
Optimus by Afrinvest is a fintech platform that provides its clients with a wide range of financial services. The fintech subsidiary of Afrinvest has, over the years, become one of Nigeria’s leading fintech platforms for savings in naira and dollars, payment, trading Nigeria and foreign stocks mutual funds and alternative assets.
The Optimus mobile application, available for download on the Google Play store and the iOS store, harmonises banking, wealth management, and brokerage needs into one simple system. Key features of the platform include OptiFlex, OptiLock, wealth progress trackers, Naira and dollar assets as well as financial news on the go.
Optimus grants its customers access to intelligent financial insights from professionals with over 27 years’ experience to help Nigerians make informed financial decisions now and in the future.
Although fintech is still a relatively new sector in Nigeria, there is growing evidence that the industry will continue to evolve and contribute to the economic growth of the country.
The fintech scene will keep expanding and pave a bright future for the macroeconomy.