Nigerian start-ups are taking a chunk of deposit money banks’ market share in push for financial inclusion.
These start-ups ensure that the unbanked have access to quick credit at affordable rates.
With a population of 200 million people, a 2018 report by Enhancing Financial Innovation & Access (EFInA), a financial sector development organization, showed that 60 percent of Nigerians neither had mobile money nor banking account. The report further showed that 36.6 million adults, representing 36.8 percent of the adult population, were financially excluded.
However, with the advent of start-ups and digitalisation, the number of financially excluded Nigerians is beginning to drop as financial technology (fintech) companies continue on the rise.
Cowrywise was founded in 2017 by Edward Popoola and Razaq Ahmed and aims to encourage saving among Nigerians. It enables Nigerians to build their wealth within five minutes.
In 2018, Cowrywise was accepted into the YCombinator summer program, a California-based start-up accelerator programme which offers mentorship and financing. The firm successfully got $120,000. This was some weeks after it secured a $15 thousand seed investment from Microtraction, a funding investor.
Paystack was founded in 2015 and has grown to become one of the top financial service providers in Nigeria. It was the first tech company in Nigeria to be accepted into Silicon Valley’s Y Combinator program and is also one of the three Nigerian companies listed on the world’s top 250 FinTech companies.
Paystack aids online transactions with debit and credit cards which enable a seamless online transaction for sellers and buyers. Since its establishment, Paystack has raised millions of dollars from both foreign and local investors in addition to the revenue it gets from the services it provides
According to Crunchbase, the company has raised up to $9.5 million in funding through five rounds. Since its launch and in 2018, it raised $8 million in a Series A funding round led by US payments company, Stripe.
The company founded by Shola Akinlade, and Ezra Olubi, has successfully expanded its operations beyond Nigeria, and presently has over 17,000 customers which include Domino, Mtn, IrokoTV, Taxify among others
Flutterwave is another fintech company making waves in the financial industry. Founded in 2016 by Olugbenga Agboola and Iyinoluwa Aboyeji, Flutterwave helps in sending and receiving money, paying bills and subscriptions.
The company has been able to partner with over 50 banks in Africa, processed transactions worth over $1.5 billion. Although it has its headquarters in San Francisco, it has branches in various parts of Africa including Nigeria, Nairobi, Accra, and Johannesburg.
Paga is one of the early set of fintech companies in Nigeria. It was established in 2009 by Tayo Oviosu, and the company has grown to become one of the largest with numerous outlets across the country.
Next is Branch, which enables loan seekers to access up to N200,000.
“Unlike other lenders, we don’t make you jump through hoops or fill out paperwork. Simply apply through the Branch app and get approved in under 24 hours,” the firm says on its website
Paylater, founded by Chijioke Dozie, enables the financially underserved to have access to credit,. It rates customers and assigns scores to determine their eligibility.
“Many banks are fretting already,” Charles Umoh, a technology analyst, said.
“What they cannot do, fintechs can. I would be worried if I were a bank,” he further said.
Kuda believes in removing customers and borrowers from the shackles of what it calls ‘ridiculous charges’ by Nigerian banks and helps them to spend smartly. It got an operating license from the Central Bank of Nigeria (CBN) last year—which puts in pole position to tap into the retail banking space.
“Kuda is the first digital-only bank in Nigeria,” said founder Babs Ogundeyi in 2019, saying that the firm was neither a mobile wallet nor a mobile app piggy bank.
