Fintechs can bridge Nigeria’s financial inclusion gap with mobile money — World Bank

Fintechs can use mobile money, digital payment platforms and wallets to reach underserved populations and bridge Nigeria’s financial inclusion gap, a new report by the World Bank has revealed.

According to the report, Africa’s financial services market could grow at about 10 percent per annum, reaching around $230 billion in revenues by 2025. Nigeria’s fintech sector makes up about one-third of this market.

Despite the growth, the global bank disclosed that about half of Nigeria’s adults remain unbanked or underserved, primarily due to the limitations of traditional banking infrastructure.

“This is especially true in rural and underserved areas, where physical bank branches are scarce or nonexistent,” it said.

The global body highlighted Quickteller Paypoint, an agency banking platform launched by Interswitch, as an enabler of financial inclusion. According to the International Finance Corporation, agency banking is a model where traditional banks partner with local businesses or individuals, known as agents, to provide essential financial services, including cash deposits, withdrawals, and payments.

To reach a much larger client base, the World Bank disclosed that fintechs are collaborating with traditional banks to tailor services to the evolving needs of Nigerian consumers and businesses.

“These offerings pair a range of traditional banking products such as savings accounts and bill payments with innovative tech solutions such as lending platforms, virtual investment advisors, digital insurance products, and digital remittance solutions,” it stated.

According to a GSMA report, Sub-Saharan Africa (SSA) has continued to lead global mobile money adoption because of Nigeria, Ghana, and Senegal. In 2023, SSA’s mobile money market was worth $912 billion.

The global body for telcos noted that mobile money growth has contributed to a rise in digital payment use in the country and has improved access to digitally enabled services.

“Today millions of users are making or receiving payments, taking out productive credit to meet short-term financing needs, paying for government services or accessing savings and insurance products to protect themselves from shocks,” said Mats Granryd, director general of GSMA.