Nigeria Taking A Lead in The African Fintech Space

Nigeria, Africa’s largest economy with a population of 200 million people, has assumed the role of a true leader in the African Fintech ecosystem.

Over the last two years, Nigeria saw significant growth and investments in its Fintech sector, which saw it overtake South Africa to become the most-populated fintech space on the continent.

The country has reportedly established itself as the most attractive Fintech investment destination and has assumed a market-leading position when it comes to activity it has long held in the area of Fintech investment.

Fintech is the leading sub-sector of the Nigerian startup space, both in terms of levels of activity and amounts of funding secured. 

The Fintech News Network Index (FNNI), which ranks the countries and cities that are querying for the word “fintech” the most on Google, revealed that in April 2023, Internet users in Singapore, Nigeria and Hong Kong showed the most interest in the sector.

Of the US $3,635,823,965 in funding secured by African Fintech ventures in the last 8.5 years, US $1,511,188,000 (41.6%) went into Nigeria-based companies.

Notably, Nigeria’s Fintech space added more than US $1 billion to its total in the last two years, more than tripling its total figure, and making up more than one-third of the staggering US $2.7 billion or so invested in African Fintech since July 2021.

In the second quarter (Q2) of 2023, Nigeria was the most active Fintech country in Africa with 25 deals, which is a 42% share of deals in the African Fintech sector. Kenya was the second most active with 13 deals, a 22% share of total deals and South Africa was third with seven deals.

It is worth noting that the Nigerian Fintech space is by far the biggest employer within the country’s broader startup ecosystem, and the number of fintechs has continued on a growth trajectory having moved from 144 fintechs in 2021, to 217 in 2023. 

Nigeria’s thriving Fintech ecosystem has been driven by the country’s youthful population, increased smartphone penetration, and a focused regulatory drive to increase financial inclusion and cashless payments.

The country’s Fintech ecosystem is largely comprised of startups focused on mobile payments, digital banking, merchant solutions, and personal finance.

Notably, an Economist Intelligence report revealed that Nigerian fintechs are branching out from payments into lending, micro-investments, wealth management, peer-to-peer transfers, and insurance.

Despite the increased activity in the Fintech sector in Nigeria and the positive multiplier effect on the economy, there is a significant potential for further growth.