Payments, Trading and Crowdfunding are…


Payments, Trading and Crowdfunding are…

Nigeria's Fledgeling Fintech Sector

While ’s financial technology is not exactly , it shows steady growth signs with promise for the short, medium, and long term. Over the last 12 , Nigeria has witnessed the sector emerge and take significant strides, especially when compared to data from 2020. For example, the value of all instant payments made in 2021 was more than N241 trillion, almost that of 2020’s figures.

But it is not just payments where there is growth and potential. Overall, in 2021, nearly $1 billion was pumped into the Nigerian sector, which was a whopping 501% more than in the previous year. It now ranks second in Africa in terms of and for startups, equivalent to 41% of what reaches the entire continent. Not only this, but three different Nigerian startups all hit a valuation of $1 billion, becoming what is known as a “unicorn”.

Trading companies

In the first four months of 2022, the top 10 Nigerian broking firms traded some NGN 579 billion in stocks, over 63% of the country’s total. The country has a population of over 200 million people, with more and more coming online every year. Recent figures from Statista show that over half of the population is online, meaning many are gaining interest in trading and other of investment. According to data from various trading stakeholders, domestic trading transactions accounted for a significant amount (78%) of the market, demonstrating the interest of locals.

There is widespread interest in various sectors such as forex, stocks, and of course, CFD trading. The latter, short for contract for , is popular due to the fact there is no need to purchase the or , instead, the trader simply estimates how much they think the value will rise or fall. Various sources put the number of active traders in the country at around 300,000, a number which has shot up over the last two and is expected to grow at a steady pace.

Payment companies

Digital payment companies have done exceptionally well over the last year. Out of the new Nigerian unicorns, made significant waves along with , Moove and Quickteller. Flutterwave managed to raise some $250 million in funding back in February, while Moove raised $105 million. These kinds of sums are significant for the country and set a promising precedent for the years to come.

Other signs of positivity include collaborations with big names such as Flutterwave with Paypal, Paystack with Apple Pay, and Carbon with Visa. There is also growth in banking models that aim to serve the unbanked and provide better access to financial systems to those in rural areas.

Credit and funding platforms

Due to challenges with the unbanked and a lack of access to conventional lending solutions, many Nigerians look to other solutions for financing their startups. These include which has taken off in a big way in the country. As it can be to borrow from traditional financial , crowdfunding apps and platforms have become very popular with entrepreneurs.

In the agricultural sector, agritech companies are particularly fond of using such methods to raise all-important capital. There are many big crowdfunding companies in the country, such as ThriveAgric, Farmcrowdy, and Porkmoney. By the end of this year, Statista predicts it will be worth $1.98 million with a CAGR of almost 6% over the next few years.

The Nigerian fintech sector has plenty of potentials and shows signs of sustainable growth in the medium and long term. This will lead to a more financially literate society and more opportunities for entrepreneurs, startups, and the as a whole.

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