Nigeria, Africa’s most populous nation and largest economy is witnessing a surge of innovation and growth in its fintech sector. Fintech companies are using mobile technology to provide financial services to millions of Nigerians who are unbanked or underbanked, as well as to businesses and entrepreneurs who need access to credit, payments, and savings.
According to a recent report by Bloomberg, two of the best-performing stocks in Nigeria this year are fintech companies that have reinvented themselves as mobile banking platforms. Chams Plc and Computer Warehouse Group Plc have soared more than 800% and 700% respectively, as they tapped into the huge potential of the Nigerian mobile money market.
Chams, which started as an identity management company, secured fintech licenses in 2022 and launched its mobile banking app, Kaoshi, which allows users to open bank accounts, send and receive money, pay bills, and buy airtime. Computer Warehouse Group, which was formerly a computer hardware and software provider, set up its Fifthlab fintech unit last year and introduced its mobile banking app, Quba, which offers similar services as well as loans, savings, and investments.
Both companies are competing with other established and emerging fintech players in Nigeria, such as Paga, Opay, Carbon, Kuda, and Bankly, which have also attracted millions of customers and investors. According to the Central Bank of Nigeria, the total value of mobile money transactions in the country reached 5.9 trillion naira ($14.4 billion) in the first half of 2023, up from 4.6 trillion naira ($11.2 billion) in the same period last year.
The growth of mobile banking in Nigeria is driven by several factors, such as the high penetration of mobile phones, the low access to formal banking services, the supportive regulatory environment, and the increasing demand for digital and convenient solutions amid the COVID-19 pandemic. According to the World Bank, only 39.7% of Nigerian adults had a bank account in 2018, while 84.5% had a mobile phone. The Central Bank of Nigeria has also issued guidelines and licenses for mobile money operators, as well as introduced policies to promote financial inclusion and cashless transactions.
The Nigerian fintech sector is not only transforming the mobile banking landscape but also creating opportunities for economic development and social impact. Fintech companies are providing financial literacy and empowerment to millions of Nigerians, especially women and youths, who can now access affordable and flexible financial products and services. Fintech companies are also creating jobs and fostering innovation and entrepreneurship in the country.
As the Nigerian fintech sector continues to grow and evolve, it faces some challenges and risks, such as cybersecurity, data privacy, consumer protection, and competition. However, with the right strategies and partnerships, fintech companies can overcome these challenges and leverage their strengths to deliver value and satisfaction to their customers and stakeholders.
Source: Bloomberg
