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Nigeria Fintech Landscape: January 2019
Nigeria Fintech Landscape: January 2019
Nigeria Fintech Landscape: January 2019
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Varun Mittal
Duke University
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► FinTech Association Banks in Nigeria are also leveraging FinTech to improve customer experience. One
of Nigeria of Nigeria's biggest banks, FirstBank, launched the FirstBank Digital Lab in July 2018, at
► Blockchain in the “Yabacon Valley,” Yaba, Lagos mainland. The lab is designed to serve as a platform
Nigeria for FirstBank to collaborate and advance with the rapidly evolving FinTech.
► E-
Regulators
Payment Providers
Association of Niger The Central Bank of Nigeria has primary responsibility for regulating financial services in
ia (E-PPAN) Nigeria. Other relevant bodies include the Nigerian Deposit Insurance Corporation (NDIC)
(which protect deposits); and the Financial Services Regulations Co-ordinating Committee
(which promote safe, sound and efficient practices by financial intermediaries). The
Nigerian Communications Commission (NCC) also regulates FinTech businesses where
the services offered involves mobile phones pursuant to the License Framework for Value
Added Service issued by NCC.
In February 2018 the CBN issued a press release in which it reiterated that
cryptocurrencies such as Bitcoin, Ripples, Monero, Litecoin, Dogecoin, Onecoin, etc and
Exchanges such as NairaEx are not licensed or regulated by the CBN. In April 2018,
Members of the House of Representatives called on CBN and NDIC to put in place a legal
framework for the regulation of the blockchain technology .
In March 2018, The CBN along with Nigeria Interbank Settlement System introduced a
regulatory sandbox with the aim to facilitate digital innovation by the FinTech companies.
As of March 2018, CBN in partnership with Bill and Melinda Gates (BMG) Foundation was
developing a set of regulations for FinTechs as a new group in the financial services
sector.
Investors
International investors are taking notice of the potential of Nigerian FinTech. For example,
in August 2018, a UK government delegation, led by the UK prime minister, visited Nigeria
to meet with entrepreneurs and forge connections with the African FinTech community.
The group included representatives from the Financial Conduct Authority, the London
Stock Exchange Group and the Prime Minister’s Ambassador for FinTech as well as
representatives from big financial service players.
SMEs in Nigeria can receive funding from dedicated funds or take out loans at friendlier
rates. The Bank of Industry (BOI) provides funding to small business by offering customer
friendly rates through the youth entrepreneurship support fund and the national youth
service fund, with a focus on technology companies.
There are funds such as Aliko Dangote Fund, the Tony Elumelu Entrepreneurial
Foundation, the National Information Technology Development Agency Fund that are also
dedicated to supporting SMEs.
The Enhancing Financial Innovation and Access (EFInA), a financial development
organization funded by DfID and BMG Foundation, launched an Innovation fund in 2009. VC/PE in the region
The fund provides grant subsidies through the Technical Assistance Grant and the
Innovation grant worth US$250k and US$2m respectively. ► 500 Startups
► Acumen
Talent ► Aella Capital Partners
► NET1
Nigeria ranks relatively highly in Africa on entrepreneurship, and majority of activity takes ► Savannah Fund
place in the capital city of Lagos. However, the STEM (science, technology, engineering ► The Abraaj Group
and mathematics) talent demand has outpaced supply. ► Y Combinator
The private sector has launched their own initiatives to nurture local talent. For example,
digital payments firm Interswitch has launched Interswitch SPAK, a program to support
young Nigerians who are interested in acquiring the problem-solving skills that come with
a solid STEM education.
Official initiatives are being set in place to support and encourage innovation in order to
create jobs.
• The Federal Ministry of Finance introduced the YouWIN Connect program to promote
entrepreneurship, job creation and wealth through enterprise education for young
Nigerians in target sectors that align with the government’s objective of diversifying the
economy and promoting competition and transparency.
• The Lagos state Government set up a Lagos State Entrepreneurs Trust Fund (LSETF)
in 2016, worth US$69.5m (₦25b), to provide financial support to residents of the state,
for job, wealth creation and to tackle unemployment. LSETF acts as an instrument to
inspire the creative and innovative energies of all Lagos residents and reduce
unemployment across the State.
FinTech Hub
www.ey.com/sg/FinTechHub
Varun Mittal
Global Emerging Markets
FinTech lead
varun.mittal@sg.ey.com
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