Fintech's Influence on the Nigerian Economy

Nigeria has a combination of private businesses coupled with central economic planning and government control. While the economy has taken a hit recently, certain businesses have been able to use inventive methods to make money and help enhance the economic environment. One of the industries present is the financial technology sector. Known as fintech, this sector combines technology to improve the way people and businesses handle finances, such as through mobile payment apps, digital banking, and investment applications. Nigeria's financial sector is home to over 200 fintech firms, which provide services such as prompt loans, malleable savings, effortless payments and electronic commerce. In 2012, the Central Bank of Nigeria implemented a cashless policy to push consumers towards the adoption of electronic payments, so as to facilitate the flourishing of the fintech sector. Moreover, long queues at the banks and the time taken to pay or transfer funds were a major hindrance for the conventional banking system. These banks have to encounter other difficulties too, such as inadequate capital base, political hazard and inadequate governance. The lack of access to physical services during the Coronavirus Disease pandemic increased the issues of traditional banking models and displayed the possibilities that could be achieved. Though the topic of COVID-19 may no longer be as prominent in public discussions, its effects still linger in financial systems. Therefore, the fintech industry had to develop a number of methods to provide services to customers in Africa and beyond. Throughout its history, Nigeria has been seen as a leader in the startup sector, with many areas of the country representing strong investment opportunities in Africa. Between 2014 and 2021, the Nigerian fintech space witnessed a substantial expansion, raising more than $600 million in financing. In 2019, out of the $491.6m invested in African tech startups, 25%, an amount total of $122 million, was raised in Nigeria, representing the highest rate of any nation. The fintech industry is responsible for approximately 15% of total banking revenue in the country, and is an essential factor in the promotion of financial inclusion. Fintech can significantly boost the speed and efficiency of financial dealings. Mobile payments are much faster than employing customary payment methods such as debit or credit cards. Fintech has spurred expansion by making numerous job openings available. Data scientists, app developers, data analysts and cybersecurity professionals are highly sought after, to name a few. Moreover, local business agents who use fintech developments, e.g. Point of Sale machines, assist in bringing banking services to remote areas, thus helping to shrink the unbanked population in Nigeria. Overall, the financial sector is being revolutionized by fintech, making it simpler for people and corporations everywhere to access, utilize, and pay for financial services. Prominent fintech firms include MTN, Optimus from Afrinvest, Interswitch, Piggyvest, Paystack, Flutterwave, Paga, Kuda and e-Tranzact. There is mounting proof that the fintech sector in Nigeria, although still quite nascent, will keep progressing and benefit the economic development of the nation. The fintech sector is anticipated to continue growing and provide a positive outlook for the macroeconomy.

Source: https://medium.com/@reginaldonabumedia/the-impact-of-fintech-on-the-nigerian-economy-a269ce2ce480?source=rss------fintech-5