The Chief Product Officer of a Nigeria fintech payment system, Brian Manuwuike, said that financial technology companies can only serve about 35 per cent of the Nigerian population.
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According to him, the nation’s smartphone penetration is at 35 per cent, suggesting that the market cap for financial technology companies is the same. He explained that this and a lack of infrastructure were slowing down financial inclusion in the nation.
He disclosed this in an interview stating that access to digital payments could only be driven by digital financial services which was determined by access to smart devices.
Manuwuike said, “Access to digital payments drives the adoption of digital financial services. Once consumers use the service for the first time and have a good experience, they will always return to convenience.
“The problem with inclusion in Nigeria is not just a lack of infrastructure but also a relatively low smartphone penetration. Currently, it is about 35 per cent, which means that, at best, most fintech products are capped at 35 per cent of the population.
“These barriers continue to drive the economy’s reliance on cash, with 9/10 of transactions in Nigeria still settled in physical currency.
“Nigeria needs more investments in the offline infrastructure where consumers can access financial products/services with cash and without a smartphone. Offline distribution will drastically really drive financial inclusion.”
The CPO said while wallets and mobile money were the future for payments, Nigeria still has a long way to go in terms of adoption. He also stated that the entry of telecommunication firms into the payment space was positive for the ecosystem as it would ensure that players already in the space created new products and innovate.
Reports show that there are over 200 fintech companies in Nigeria driving digital payments and offering financial services.
According to PricewaterhouseCoopers, the fintech industry is one of the bright spots of the tech ecosystem that is motivating investors to take positions or stakes in the country’s growing youthful and tech-savvy population, increasing smartphones and Internet penetration, large unbanked population, among other factors.
In 2021, fintechs in Nigeria and other African countries raised about $3bn of the nearly $5bn that was raised by startups on the continent.