How Nigeria is Expanding Financial Inclusion Through FINTECH



Epa Stevens

Nigeria is currently one of Africa’s main destinations for Financial Technology, and to say that FINTECH is booming in the country would only be stating the obvious. The rising number of youths connected to the internet, increasing penetration of mobile phones, and a large number of unbanked and underbanked citizens, are some of the factors that have been identified as major drivers of this revolution

According to a McKinsey report, 60 million Nigerians are without bank accounts. With the FINTECH boom, the race to harness the opportunities provided by this gap has begun.

With almost a billion-dollar investment made between 2017 and 2018 alone, a revolution is currently onstream in Nigeria’s FINTECH industry, one that is too sweeping to ignore. For once, indigenous brands are blazing the trail. Brands such as Flutterwave, SystemSpecs, Piggyvest, Farmcrowdy, Interwitch, Paystack, e-transact, Vogue Pay, amongst others are leading the pack of about 200 Nigerian Fintech firms in the new wave of digital economic transformation.

Even international technology giants are beginning to notice Nigeria’s fintech boom. Facebook has made a move to catch on the opportunity this new development presents as it recently opened an office in Nigeria, the first in Africa to house a team of expert engineers building for the future of Africa and beyond.

“Those apps and services are redundant if there isn’t the infrastructure to carry them. I hope it’s good for the world, but it’s also in Facebook’s self-interest to make sure that the infrastructure is significantly improved,” Facebook’s Vice President, Nick Clegg said about Nigeria’s growing array of indigenous FINTECH solutions in a recent chat with Vice President, Yemi Osinbajo.

Dubbed, Fireside Chat, the online conversation was mainly on the ‘Digital Economic Pillar of Nigeria’s Economic Sustainability Plan’. During the chat, the Vice President hinted at new licenses recently approved to boost financial inclusion and deepen the Fintech ecosystem by non-deposit money-banks. “For example, we worked on the payment services licenses, which are licenses for FINTECH companies that are doing some banking-type work but are not licensed-deposit banks. The need to create some room for inclusion lead to a collaborative effort between government, tech companies and even the entertainment sector. This Technology and Creativity Advisory group, worked with Industrious and Competitiveness Council to create the regulations and think through some of the problems.” The VP said whilst expounding on a point on Facebook.

One of the indigenous companies signposting the maturity of indigenous giants is Lagos-based FINTECH firm, SystemSpecs, who has helped place Nigeria on the global map of Fintech innovation with Remita, an electronic payment platform that facilitates receiving and making corporate and individual payments. CNN journalist, David Hundeyin, recently buttressed SystemSpecs’ pioneer status when he mentioned them as one of the companies that provided technology solutions in the early 90s, long before the internet became ubiquitous in Nigeria.

Before now, there had been wide concerns by both industry actors and government regulators about the perceived poor quality of indigenous products that made it almost impossible to compete effectively with the foreign alternatives.

In the last few years, the industry has witnessed a boom in start-ups who not only compete in quality but also in innovation and functionality. However, till date most government agencies still patronise numerous foreign made software in the execution of various projects.

SystemSpecs paved the way and changed this narrative, serving not only as the Nation’s leading receiving and payments gateway for government, but also boasts of a host of local and international clientele base as far back as 2005 with its revolutionary Remita software.

Founded in 1992 by Ahmadu Bello University-trained computer scientist, John Tani Obaro., SystemSpecs, is the leading provider of financial and human management solutions in Nigeria. Besides Remita, the company has a lot of other award-winning products such as Human Manager and PAYLINK, and has received many accolades over the years for its consistent commitment to showcasing the limitless possibility of indigenous talents including the “Most Efficient Third-Party Payment Processor” of the year by Central Bank of Nigeria’s EPIS Efficiency Award; “Fintech Recognition Award” by the Fintech Association of Nigeria; “Software Company of the Year” by Beacon of Information and Communication Technology (BoICT) Awards and more.

Success Story of an Indigenous brand

SystemSpecs, motivated by the success of their earlier solutions, developed Remita in 2005, making the indigenous company, a full-service software company for several SMEs, Corporate Organisations, Multinationals, Government Agencies, NGOs, Religious Organisations, Resident Associations, Schools and Educational Institutions, Hospitals and Health Institutions, Utility Companies, and individuals.

Whether you are trying to register for the Joint Admission Matriculations Board (JAMB), making school fees payment for your ward in tertiary schools, registering a new company, paying Customs Duty, FIRS, and Immigration, you name it, Remita, is the powerhouse behind the payment.

The trust which the government has placed on the brand started with a competitive bidding process during the commencement of the President Buhari Administration in 2015.

The company emerged the successful bidder in a process that included top Fintech companies across the world, to provide a payment gateway for the Treasury Single Account programme that was fully implemented in 2015, having been partly executed by the Goodluck Jonathan Administration in 2012.

Being the payment channel to all government Ministries, Departments and Agencies (MDAs), and providing payment channels for over 500 banks and other financial institutions, many easily confuse Remita as a financial institution. Whilst some people have erroneously held the platform responsible for fee increases, others have claimed that it is a foreign software, perhaps due to the ubiquitous yet efficient service delivery, which may have been deemed beyond the hitherto competence of indigenous providers. This is however not the case, Mr Deremi Atanda, Executive Director of SystemSpecs explains, “We have been a payment facilitator for over 15 years. What we do through Remita is that we help you move your money from where it is to where you want it to be.”

Financial Pundits have tirelessly explained that Remita is not TSA, and that it is neither an agency of government nor affiliated to any government for that matter. Whilst Remita is an application or software for executing payment instructions, TSA is an IMF initiated financial policy, proposed by the federal government of Nigeria in 2012 under the President Jonathan’s administration and was fully implemented by the current administration, with the aim of consolidating all inflows from all agencies of government into a single account at the Central Bank of Nigeria(CBN) for efficient management and control of government’s cash resources.

With close to N9trillion recorded as cash inflows, and another N108billion saved from bank charges as at March 2018, Remita is no doubt the long-awaited tool helping to reorder Nigeria’s fiscal management structure and checkmating both overt and covert scale of financial impropriety in the Nigerian public, and even private sector.

The continued existence of SystemSpecs can only happen through continuous innovation. In a country where start-ups die out within the first few years of incorporation, SystemSpecs has managed to weather the storms for over 28 years whilst its flagship product, Remita continues to stay relevant 15 years after it was created. Besides its use as a payment gateway for the TSA, Remita boasts of a large clientele in the private sector, including multinational organisations. In the public sector, it is used as a collector and payroll software in at least 7 states.

Despite the success of Remita, SystemSpecs is not resting on its oars. The company continues to upgrade the Remita solution to solve more problems for more people. One of the most recent projects is its link payment solution, Paylink. Whether you are an entrepreneur, freelancer, religious organisation or charity, Paylink provides users with the convenience of collecting money for a product/service rendered or donations from a wide array of payment channels using a single link. With portfolio of such innovative solutions, we are left on our toes guessing what to expect next from this home-grown giant outshining its foreign peers.

Professor Osinbajo, during the chat with Nick Clegg, has reiterated Nigeria’s readiness to elevate its FINTECH journey beyond the usual government rhetoric. With the Central Bank (CBN) and Bank of Industry (BOI) creating robust special funds to support established and start-up FINTECH companies, and several firms such as SystemSpecs, consistently providing decades of effective solutions to individuals, corporate organisations, and governments, Africa may be on the verge of a truly disruptive digital economy.

Epa Stevens is a financial analyst and leading online commentator.