The Role of Fintech in Accelerating Financial Inclusion in Nigeria

By Adeniyi Ogunfowoke,

The Nigerian financial sector has significantly grown in leaps and bounds; thanks largely to technology. Currently, banks’ services have been automated. Customers are no longer required to visit their brick and mortar branches to perform any transaction.

With their smartphones, they can process local and international transactions. These are exciting times for the Nigerian banking sector as the long hours spent at the bank have been greatly reduced. This laudable effort means that fintech has a key role to play in boosting financial inclusion in Nigeria.

As a result of technology, a fintech platform like Jumia Pay and others are disrupting the way banking business is done. Now, it seems like the banks are playing catch-up.

Although Nigerian banks are exploring and exploiting fintechs to improve their services, they are not taking advantage of it as quickly as the private firms whose services are entirely online.

Services Offered by Fintechs

The edge that fintechs like Jumia Pay and others have over the banks are in the services they offer. Many Nigerians and businesses are trooping to fintechs because of the flexibility of their services. This does not necessarily mean that they have abandoned the banks.

There are some key services that make fintechs stand out or unique. They include (1) eCommerce payment: online retailers can now seamlessly pay for their orders, thanks to the payment gateway service offered by fintechs. To make payment easy for its millions of customers, Jumia, Nigeria’s no 1 shopping destination launched Jumia Pay. This has enabled every Jumia customer to pay for transactions across the Jumia ecosystem (2) Loans: When it comes to loans, the fintechs are far ahead of banks. Without collateral, you can apply for a loan and receive it within 24 and 48 hours. They also have a flexible payment plan. As an entrepreneur, you may need a loan to shore up your business, you can apply for Jumia loan and you can go and sleep because the repayment plan is the best in the Nigerian fintech world. (3) They also provide mobile money transfer and Unstructured Supplementary Service Data Services.

The services of these fintechs are not only restricted to persons in Nigeria’s urban areas, but they are also accessible to many in rural communes. This is because they are willing to go where the banks are not necessarily ready to. Of course, we know that there are millions of unbanked Nigerians in the countryside.

Now, you find small payment kiosk or stores in these rural areas where you can perform different transactions including sending and receiving payment. And if you do not want to visit the stores, they can simply download the Jumia One app to buy a prepaid card, pay for a subscription and perform many other financial transactions.

All these activities combined are in one way or the other helping to promote financial inclusion. Even though there is so much to do, these baby steps are significant to close this gap.