65% of Nigerians or 134m lack access to financial inclusion
By Jeph Ajobaju, Chief Copy Editor
Smartphone penetration in Nigeria is 35 per cent, translating into the market cap for financial technology (fintech) firms in a population of 206 million, which means 134 million are excluded from fintech services.
Nibox Chief Product Officer Brain Manuwuike, who made the point, said a lack of infrastructure is slowing down financial inclusion, against the desire of the Central Bank of Nigeria (CBN).
He insisted access to digital payments could only be driven by digital financial services which is determined by access to smart devices.
“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,” Manuwuike said.
“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.”
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Investment in offline infrastructure
“Nigeria needs more investments in offline infrastructure where consumers can access financial products/services with cash and without a smartphone. Offline distribution will drastically really drive financial inclusion,” Manuwuike added, according to reporting by The PUNCH.
He reiterated wallets and mobile money are the future for payments but Nigeria still has a long way to go in terms of adoption.
He said the entry of telecommunication firms into the payment space is positive for the ecosystem as it would ensure existing players create new products and innovate.
There are more than 200 fintech companies in Nigeria driving digital payments and offering financial services.
PricewaterhouseCoopers says the fintech sector is one of the bright spots motivating investors to take stakes in Nigeria’s growing youthful and tech-savvy population, increasing smartphones and internet penetration, in a large unbanked terrain.
Fintechs in Nigeria and other African countries raised about $3 billion of the nearly $5 billion raised by startups across the continent in 2021.
