Nigeria’s $1tn economy ambition needs fintechs — FintechNGR boss

Stanley Jacob, president of the Fintech Association of Nigeria (FintechNGR), has said that the fintech industry has the power to contribute significantly to the country’s ambition of becoming a $1 trillion economy.

While stressing the role of fintech in creating financial inclusion, he said, “We cannot achieve the $1 trillion economy without fintechs.”

Speaking during an exclusive interview on Arise News, the Fintech President recalled the impressive growth of the fintech sector despite Nigeria’s tough macroeconomic environment, the challenges it faces, and the opportunities it presents.

“Nigeria’s fintech industry has remained on a growth trajectory despite the country’s economic downturns,” Jacob said.

He noted that the number of fintech startups in Nigeria has risen dramatically, from just 74 in 2017 to over 217 by 2023. This growth, he said, is fuelled by increased mobile penetration, a youthful population, and the sector’s ability to revolutionise various industries, including payments, healthcare, agriculture, and insurance.

Jacob explained that fintech has expanded beyond traditional banking and payment systems to transform other sectors.

He said, “Fintech has gone beyond just naira and kobo. It has now gone into medicine, healthcare, agriculture, and elsewhere.”

He noted that this expansion into “micro-markets” within different industries has created opportunities for greater financial and economic inclusion.

Despite Nigeria’s high poverty levels and challenging economic conditions, Jacob argued that the country’s youthful population presents a significant advantage.

“Our youthful population also presents a unique opportunity for us, for fintechs and investors in this space,” he said. He credited the ability of fintech to deliver financial services digitally as a key factor behind its success, enabling broader accessibility and inclusion across the population.

However, the growth of fintech in Nigeria is not without its challenges. Jacob pointed to several key issues, including governance, FX exposure, and the sustainability of fintech businesses. “First, you want to talk about governance. Governance is one thing we’re trying to support as an ecosystem,” he said.

He noted that foreign exchange risks pose a significant challenge, particularly for fintech companies that rely on funding in foreign currencies but earn revenue in Naira.

“Profitability is another thing. We’ve seen a lot of fintechs not prioritise profitability,” Jacob observed. He urged companies to balance social good with financial sustainability, warning that the current trend of offering free services could undermine the long-term viability of their businesses.

Cybersecurity also remains a major concern for the industry. “Cybersecurity comes first,” Jacob said, speaking of the need for robust data protection measures and compliance with regulations like the Nigeria Data Protection Regulation (NDPR).

He further highlighted the role of collaboration between the fintech industry and the government in achieving these goals.

Looking to the future, he expressed optimism about the continued growth of Nigeria’s fintech industry. “The future of fintech is quite bright,” he said, adding that the sector is poised to expand into new use cases, including health tech, property tech, and agrotech.

While he acknowledged the challenges the current macroeconomic climate poses, he stressed the need for resilience and adaptability to overcome these hurdles.