The Nigerian Communications Commission (NCC) has said that Nigeria’s financial technology (Fintech) revenue is expected to grow to $543.3million this year, a growth from $153.1 million in 2017.
The executive vice chairman and chief executive officer of NCC, Prof. Umar Danbatta, disclosed this yesterday at the maiden conference of Finance and Online Publishers (FiBOP) held yesterday in Lagos under the theme ‘Harnessing fintech for economic growth and development.’
Danbatta who was represented by the commission’s director, digital economy department, Dr. Augustine Nwaulune also said, quoting mckensy.com that fintech accounted for only around 1.25 per cent of retail banking revenues in 2019 while its investments in Nigeria grew to approximately $460 million in 2019.
He explained that majority of the investments were from external investors adding “this was only a small fraction of the $36 billion invested in fintech globally.”
“For millions of Nigerians, fintechs have designed practical, convenient, and affordable financial products and services, setting the bar for innovation in product creation. In doing so, they have had a multiplier effect on the economy as a whole, opening up new business models outside of financial services, promoting the expansion of e-commerce, expanding the science, technology, engineering and mathematics (STEM) talent pipeline, and accelerating the nation’s development goals.
“Yet despite these impressive gains, the impact created by fintechs is still only a fraction of its potential,” he said.
Notwithstanding, the positive gains and impact of fintech on financial inclusion, about 1.7 billion adults worldwide are not financially.
From the figure, Danbatta said “about 56 million adult Nigerians fall into the categories of under-banked, unbanked, and financially excluded, compared to South Africa with 31% of financially excluded and Kenya 44% among others.
“Nigeria still faces a significant financial-inclusion challenge, with more than 40 per cent of the country’s population of around 200 million people without a bank account,” he added.
Globally, the NCC chief said global investment in fintech in 2019 was about $55.3 billion.
On the whole, he said there are currently over 26,000 fintech startups worldwide with 6,637 in India and 10,755 in America.
In the US, he said fintech has become a solution to the problems that have hindered the financial growth of consumers.
“According to insider Intelligence, in-store mobile payments for the US are set to hit $125 billion in 2025 and Apple Pay currently makes up 92% of mobile wallet transactions in the nation as reported by Talk Android.
“The fact that fintech in the US is growing at an incredible rate clearly shows that US financial services have long been apt for a disruption,” he said.
In the UK, Danbatta said the fintech sector is composed of over 1,600 firms, projected to double by 2030.
According to him, the sector contributed an estimated $13.4 billion (£11 billion) and over 76,000 jobs to the economy.
For Japan, he said the country boasts of a dynamic and expanding fintech industry since 2016 when the government tagged the fintech sector as a promising growth area in its Japan Revitalization Strategy 2016.
“Japan’s crowd funding ecosystem has seen notable growth in the past few years between 2016 and 2020; the market’s size grew by approximately 157% from a starting point of $647 million,” he added.
In Africa, Danbatta said Nigeria accounts for 51.41% of account ownership; South Africa, 68.4%; Kenya 85.84%; Rwanda, 55.75%; Mauritius 92.71%, and Burundi, 7.50%.
He added: “Sub-Saharan African countries accounts for 6% of ATMs (per 100,000 adults); low and middle income 27% and high income 68%.
“Bank branches (per 100, 000 adults) Sub-Saharan African countries account for 5%; low and middle income 9%, and high income 20%.
“This shows a wide variation in various inclusion and development indicators hindering growth and development economically.”