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The Nigerian fintech landscape experienced significant growth in 2021, with startups raising almost $800 million, a 120% increase from the previous three years combined ($360.7 million). This surge was part of the broader African fintech trend, which saw $1.4 billion in funding between January and September 2021.
Key Predictions and Outcomes
Adedeji Olowe, Trustee of Open Banking Nigeria, made several predictions for 2021, some of which materialized:
- Visa and Mastercard Acquisitions: Did not happen, but investments in Nigerian fintechs continue.
- Free Transfers: Major banks did not implement free transfers, but digital banks like Kuda have successfully offered this service.
- Inter-Bank Transactions: Monthly transactions did not reach $500 million, averaging $250 million instead.
- WhatsApp Payment: Struggled to gain traction due to regulatory issues, but future developments may integrate crypto payments.
Agency Banking: Exceeded expectations, with players like Kudi and Paga showing significant growth.
MTN’s PSB License: Received approval in principle, enabling telco-driven mobile money operations.
Notable Developments
- Local Investors: Increased participation in startup funding, driven by startup founders and experienced investors.
- Virtual Accounts: Gained popularity, led by innovators like TeamApt and Rubies.
- Fintech Unicorns: Emerged, with companies like Paystack and Flutterwave achieving significant milestones.
Future Outlook
The Nigerian fintech landscape is poised for continued growth, with potential developments including:
- Improved Financial Inclusion: Telco-driven mobile money and agency banking may expand financial access.
- Increased Local Investment: More startup founders and experienced investors are expected to participate in funding.
- Regulatory Changes: The Central Bank of Nigeria may introduce policies to enhance financial inclusion and innovation.
Nevertheless, 2021 was a remarkable year for Nigerian fintech, with significant funding, innovation, and growth. The sector is expected to continue thriving in 2022.
