A recent research by the Fintech News Network (FNN) has disclosed that Nigeria ranked among the top 20 countries in the world, where people are searching for the term “fintech” the most.
The Fintech News Network Index (FNNI), which ranked the countries and cities that are querying the word “fintech” the most on Google, revealed that in April 2023, Internet users in Nigeria, Singapore, and Hong Kong showed the most interest in the sector.
The rankings were based on search volume compared to each country’s total search volume. Nigeria ranked second on the list, coming behind Singapore and Hong Kong occupying the third position.
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Nigeria moved up three places between 2021 and 2022, rising from the fifth to the third position. As interest in Fintech increased over the past two years in the country, in April 2023, it rose further, taking second place globally.
Nigeria, being one of the most populous countries in Africa with a significant portion of its population unbanked or under-banked, presented a fertile ground for Fintech innovation.
The fintech ecosystem in Nigeria encompasses various sectors, which include Payments, lending, blockchain, insurance, and wealth management amongst others.
Notably, Nigeria’s booming interest in fintech has been attributed to the government’s commitment to fostering the industry. In November 2022, the Central Bank of Nigeria (CBN), launched a policy, the “National Fintech Strategy” to set put the government’s ambition to position Nigeria’s Fintech ecosystem as a global leader.
Among the major initiatives that are being undertaken, the Central Bank of Nigeria said it will design and implement balanced and proportional policies and regulations, help stimulate the domestic investment landscape, and promote multi-stakeholder collaboration.
Nigeria’s regulatory bodies are also moving forward to address the demand for open banking, issuing in February 2021 a formal framework for the practice. The country is among the first regulators in Africa to mandate open banking frameworks, along with financial services data protection rules.
Nigeria already has frameworks covering peer-to-peer (P2P) lending and equity crowdfunding on a plate. The country’s Fintech landscape has evolved tremendously, emerging over the past years into Africa’s biggest fintech hub.
It is worth noting that Nigeria’s Fintech sector has attracted significant investments from both domestic and international investors. This has seen the country lead the region in venture capital (VC) funding, accounting for a third of all funding deployed into fintech in the Middle East and Africa (MEA) in 2021, according to a 2022 study commissioned by Mastercard.
Nigeria is also the birth country of some of the region’s largest and most valuable fintech unicorns. These ventures include Flutterwave, a US-headquartered payment infrastructure provider that originated from Nigeria and is valued at US$3 billion.
Opay, a mobile-based financial platform for payments, transfers, loans, savings, and more valued at US$2 billion; and Interswitch, an Africa-focused integrated digital payments and commerce a company worth US$1 billion and headquartered in Nigeria.
Check Out Several Factors That Contributed to The Booming Fintech Sector in Nigeria
1. Large Unbanked and Underbaked Population: Nigeria has a substantial population that lacks access to traditional banking services. Fintech companies capitalized on this opportunity by offering digital financial solutions that catered to the needs of this underserved market.
2. Mobile Phone Penetration: Nigeria has one of the highest rates of mobile phone penetration in Africa. Fintech companies leveraged this widespread mobile adoption to provide mobile-based financial services, enabling individuals to access financial products and services using their smartphones.
3. Innovation and Technology Adoption: Fintech startups in Nigeria developed innovative solutions that addressed various financial challenges. These solutions ranged from mobile payments and digital wallets to lending platforms and investment apps.
4. Economic Opportunities: Nigeria is a growing economy with a thriving entrepreneurship ecosystem. The fintech sector presented lucrative opportunities for startups to address gaps in financial services and disrupt traditional banking.
5. Regulatory Framework: While regulatory challenges existed, Nigerian regulators also recognized the importance of fostering fintech innovation while ensuring consumer protection and financial stability. Regulatory changes and frameworks were developed to accommodate and support fintech companies.
With over 250 licensed Fintech companies, the Nigerian fintech sector is experiencing tremendous growth, as several startups and innovators emerge with new financial solutions.
It is not far-fetched to say that Nigeria’s FinTech ecosystem is rapidly evolving into one of Africa’s most vibrant sectors with huge growth potential.