Nigeria the Land of Fintech
Fintech in Nigeria is thriving as well as offering solutions to the Small and Medium Enterprises (SMEs), by handling most of the issues that are associated with SME’s.
This association is driven by the fact that the traditional banking system in Nigeria has taken a step back due to the economic crisis and the presence of online banking. According to data from February 2022, only 39% of Nigerians still use traditional banking. The banking system in Nigeria remains an attractive sector to this 39%, primarily due to the lack of access to services in rural areas.
The views regarding SMEs were echoed by Biodun Adedipe, founder and Chief Consultant of B. Adedipe Associates Limited, at the Supernews Conference. He stated, “Bringing SMEs into the Financial Services Network via Fintech.”
Adedipe explained that among the many challenges SMEs face, fintech was developed to address these issues by introducing SME banking software into the financial world. He emphasized that fintech, a combination of finance and technology, has transformed how we handle, invest, and access money. He reiterated that adopting fintech solutions would significantly boost the growth of SMEs, which would eventually lead to a better economy in Nigeria.
Nigeria Can leverage Fintech
The growth of the fintech sector in Nigeria began in 2012 with an introduction to the cashless policy in order to curb the excessive cash flow that is in the country.
Nigeria has over 206 million people, which is equivalent to 2.6% of the world’s population. The economic crisis that 38 million Nigerians are facing explains why this population has been lacking the use of traditional banking systems. The fact that poverty rates are high, mistrust in the financial service providers, and finally a specific budget to maintain an account are some of the reasons why Nigerians are avoiding traditional banking.
After the COVID-19 pandemic, the country’s economy was affected, making it hard for Nigerians to participate in financial circuits. Fortunately, the Nigerian population is largely driven by millennials, a digitally friendly group that is giving the economy an opportunity to improve.
As a result, over 170 fintech companies have invested in Nigeria. Due to the high cost and difficulty of obtaining credit, many Nigerians are unhappy with traditional banks. They are switching to fintech solutions that provide similar services but are easier to access, cheaper, and faster.
Thanks to digital technology, fintech options now cover the entire payment and lending process, including online payments, virtual wallets, quick loans, insurance, and flexible investments. This makes it easier for everyone, whether they have a bank account or not, to use these services.
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