• VIZON Research Limited

Nigeria’s FinTech sector to reach $3billion valuation in 12 months


Total FinTech Investment in Nigeria

With less than 10 years as a major player in the Nigerian economy, the financial technology sector is seen as the future of trade and money markets in the decades to come.


“FinTech companies, with their increased focus on customer satisfaction, provide a simple and convenient method to perform banking tasks to a technologically driven consumer base who prefer the relative ease of access and freedom offered”


As disruption continues to impact global economies, traditional financial systems between 2015 and 2016 alone, recorded a loss of over 2 million customers. This downward trend has been ascribed to poor economic growth, as well as the increase in the widespread affinity for innovative banking solutions.

Between 2014 and 2016, data shows that FinTech investments grew by as much as 58% with the entire market forecasted to be valued at over $3 billion in 2020. This is an indicator of the level of growth the industry has gone through in a relatively short period of time.

From our analysis at VIZON Research, several factors have posed as challenges for the rapid adoption of tech-based financial models across Nigeria; the leading cause being the overall weakness of the banks amid a slow recovery from a prolonged economic recession, sparked by low oil prices, the high double-digit lending rates and inadequate access to banking services.



Unbanked Nigerians

Our surveys reveal that at present, 37% of the Nigerian population remains unbanked, with 62% of this number being the youth population in rural communities. While an estimated 50.2% of Nigerians have access to internet connection and 84% are connected by mobile, just a fraction, at 35% use their devices for banking purposes.


VIZON’s data also show that despite the government’s efforts, only about 58.4% of adults in Nigeria are registered users of a full service financial institution, i.e. financially included, providing a large market opportunity for FinTech startups to capture through the deployment of innovative investment and banking products.

As globalization continues to play a key role in modifying the lifestyles of people around the world, we forecast these key drivers as triggers for the growth of Nigeria’s FinTech industry over the next 5years:

  • The financial inclusion target set by the Central Bank of Nigeria at 80% by 2020, which is focused on capturing the unbanked in rural communities through semi-digitized systems.

  • An overall increase in smartphone penetration, with a smartphone penetration rise of >10% y-o-y.

  • A surge in e-commerce activity in Nigeria

  • Government intervention through the establishment of innovation hubs across Nigeria

  • Policy and regulatory impact from the introduction of the Payment Services initiatives.


The Way Forward


While traditional banking systems have embraced FinTech solutions as a way of satisfying a rapidly advancing customer base and expanding their reach, the investment community is cashing in on this wave of ‘money disruptors’.


In Nigeria alone, emerging startup, Paystack raised $80 million dollars in 2018 in foreign investment. Remita handles over N500 billion worth in transactions in a month. Of the $114million reportedly raised by tech companies in Nigeria, 75% of it went to tech-based financial companies. Across the continent, over $560million was invested in tech companies in the past year with an additional $2billion projected over the next 12 months.


As the demand for quicker, easier banking increases, the fiscal inflows and net investments in FinTech organizations can only get bigger, with higher ROI for those with the most innovative propositions.

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