Mobile is clearly the future of financial services in Nigeria. It is faster to drive financial inclusion and a cashless policy via mobile payments
Nearly every habitable continent has seen an uptick in fintech investments over the past year, with Europe and the United States leading the charge. However, other regions have also been strengthening their fintech capabilities, including sizable investments made in Latin America (LATAM) and Africa.
One such country in Africa that is looking to fortify its fintech capabilities is Nigeria, which has already seen a substantial deployment of mobile payments investments in recent years. Consequently, the region has been looking to upgrade its fintech operations in this space, having had its mobile money operations swell from an average monthly transaction value of $5 million in 2011 to upwards of $142.8 million in 2016, according to a recent report from IrrationalInnovations.
Mobile money operations are instrumental to a region and continent that is looking to circumvent traditional banking or payments barriers. Boasting one of the fastest growing populations in Africa, Nigeria will increasingly need to rely on such measures as citizenry conduct commerce on a more regular basis both domestically and abroad.
Growing Demand, Growing Population
The population itself is expected to overtake the United States by 2050, while the country’s mobile penetration is much higher than others in the region. For example, Nigeria’s smartphone penetration is over 23 million strong with an estimated 150 million active subscriber lines in operation presently.
Nigeria is also not handicapped by the rigidity of traditional banking structures, helping facilitate a transition into the fintech space. By the numbers, specific ventures have already helped contribute over $200 million in overall fintech investment during the past two years alone.
The largest area of this investment has been relegated to Nigerian start-ups, which have developed payment and lending models – this constitutes upwards of 37% of fintech startups in Nigeria, with another 32% of groups comprising lending and financing. Moving forward in 2017, the country expects to soak up a greater share of fintech investment in Africa, which will help secure more advances in payments and remittances capabilities.