Tech, Nigeria’s New Oil (2)


Special report

Shaping Nigeria’s Economy through Innovative, Disruptive Ideas

As emerging technologies continue to drive global economies, Nigerian tech startups, especially those in the financial technology space, are developing disrupting technology solutions and innovative ideas that will help Nigeria drift from oil economy to knowledge-based economy, last week THISDAY ran the first part of the publication profiling techpreneurs. Emma Okonji went to Yaba, the tech hub of the country to interact with some of them, who share their experiences

The world has since shifted from the agrarian revolution to knowledge-based economy driven by technology innovations that are disrupting exiting structures and systems.

In Nigeria, financial technology (fintech) players and others in the tech startups space are reshaping the Nigerian economy for global competitiveness in a manner that is bringing convenience to lifestyles, while creating individual and national wealth for the country.

Fintech solutions have completely changed the financial services sector by taking financial services from the banking halls to homes and offices of customers, where people can sit in the comfort of their offices and homes to carry out successful financial transactions without going to bank branches.

When the founder of Facebook, Mark Zuckerberg visited Nigeria in August 2016, he was amazed about the vigour and entrepreneurial spirit he saw among Nigerian startups and he encouraged them to do more.

Today, the world is being ruled by young technocrats who are technology savvy and innovative and Nigeria is not lagging behind as the country’s tech startups and fintech players are making waves both locally and internationally.

It is estimated that the fintech players in Nigeria are worth over $10 billion.

The future of Fintech

In recent times, technology has become the oil that is generating revenue for global economies and fintech is driving the financial services as well as other sectors of the economy such as manufacturing, telecommunications, commerce, sports, health among others.

In Nigeria, fintech players have disrupted financial services rendered by banks with their innovative solutions and the future of Fintech in Nigeria looks bright, despite the challenges.

Founder and CEO of TeamApt, Mr. Tosin Eniolorunda, who spoke with THISDAY on the future of fintech in Nigeria, said the future remains bright for Nigerian fintech players.

TeamApt provides financial technology solutions and infrastructure for underserved customers and businesses in emerging and frontier markets.

According to him, people find it easier, faster and cheaper to carry out digital banking transactions from mobile devices, which makes the services of fintech players valid and acceptable to many.

“The digital trend in the financial services sector, makes financial transactions easier and cheaper for people, and fintechs are driving that revolution. Nigerian fintechs are building the economics of scale in the financial sector by expanding their solutions and services to outside of the country,” Eniolorunda said.

He explained that TeamApt had been involved in developing digital banking solutions that have been driving the financial devices sector since 2016.

Founder, PhastMoney, Mr. Dotun Adefioye, whose company plays in the lending space of the fintech sub-sector said his firm has developed solutions that address unique approach to lending and growing the finances of Small and Medium Size (SME) companies in Nigeria.

“Fintech community, especially the payment industry, is making remarkable progress, and at the same time driving the nation’s economy big time,” Adefioye said.

Most of them are being acquired for huge sums of money, running into billions of dollars, while some go into merger to form a robust and viable Fintech company.

To the Managing Partner, Pelse Consulting, Mr. Boboye Oluwafemi, who runs a fintech, technology has made the world a global village.

He said any company that would succeed, must embrace technology and infuse technology into the business.

According to him, technology would reduce overhead cost and would help businesses to scale fast. It is the same technology that is driving fintech businesses all over the world and Nigerian fintech companies are taking advantage of the technology to develop innovative solutions and creating ideas that are driving development in the country and beyond, Oluwafemi said.

Founder of Interswitch, a fintech company that plays in the payment space, Mr. Mitchell Elegbe said opportunities abound for fintech players, and they do not need big capital to begin.

“It’s about a knowledge-based economy that requires skills and little capital that grows into large financial base over short period of time,” he added.

He said fintech is only a payment aspect of the general startup ecosystem, since diversification in the startup ecosystem has led to the development of solutions that are addressing challenges in sectors of the economy, using the same technology skill in different ways.

Deepening financial inclusion

Fintechs are also playing key roles in promoting financial inclusion in Nigeria, through tailor- made solutions targeted at the small businesses, the unbanked and underbanked communities, with a view to offering access to financial services in the country.

Eniolorunda of TeamApt said one of the biggest challenges of financial inclusion, had been the inability of those at the lower cadre to open a bank account because of their minimal earnings and savings.

He, however, said the solutions developed by TeamApt, make it easy for low income earners to save with banks through money agents and grow their savings with time, with visiting the bank branches to open an account.

“The first step to improve financial inclusion, is to provide access to the unbanked and underbanked communities and that is what we have done with our solution at TeamApt,” he explained.

To Oluwafemi, his company provides financial services to small businesses, thereby giving them access to financial inclusion.

“With P-Connect, we are able to create community platform where SME businesses leverage to carry out financial transactions. With the solution, we provide investment and loan opportunities for small businesses and over the years, the platform has supported several SMEs and has helped them remained in businesses in spite of challenges,” Oluwafemi said.

To Adefioye, the vision of PhastMoney is to change the face of financial services in Nigeria.

“For us in the Fintech space, we are working towards reducing lending time from two month to three business days in the digital banking space which is the future of banking.

“That timing is key for most businesses and we have also introduced simple application processes for financial transactions.

“The essence is about partnering SMEs and helping them grow their businesses, using simple technology solutions,” Adefioye said.

Startups’ capabilities

Nigerian startups over the years, have shown dexterity and capabilities in developing solutions that address key challenges in various sectors of the economy, cutting across, health, telecoms, agriculture, manufacturing, education, sports, among others.

Eniolorunda was of the view that Nigeria has entrepreneurial skills and capacity to develop solutions that address identifiable societal challenges.

Elegbe of Interswitch, however said every startup must understand the risk of business owners and develop solutions with good resilience to prevent online attacks, if the business is exposed to online activities.

“Fintech players must factor in what it takes cyber criminals to steal or corrupt data, while designing a solution for online businesses. Again having good education of the market is key before developing solution to address challenges of the market. The reason being that if the business is success, it will attract more people and more competitors,” Elegbe said.

Building successful startups

Industry players are of the view that building a successful startups has to do with determination, timing, skills and collaboration. According to Eniolorunda, building a successful startups would entail adequate timing and team collaboration. We have considerable flow of infrastructure and data availability, but the ability to developing solutions that are timely in addressing societal issues, goes a long way to make a successful startup, Eniolorunda said.

For Elegbe of Interswitch, in order to build a successful startup, the players must understand the industry they are providing solutions for and they must ask the right questions that will give them a clearer view of what they want to do.

According to him, having an idea about the population of Nigeria, for instance, is not enough information that will help any startup to develop the right solutions for Nigerians.

The startup must ask further relevant questions about the different demographics that make up the total population of Nigeria like the number of old people, youths, children, men and women, in other to have a better understanding of the type of solutions that will address the challenges of the different demographics of people in the country.

He said a successful startup must understand the actual challenges of the people and develop solutions that will address specify challenges and the solution must be affordable.


Although Nigerian startups have the capability and innovative ideas in developing workable solutions and ideas that are driven by technology, but most often, they are faced with the challenge of funding, as they barely have seed funding from local venture capitalists and angel investors.

Most of their funding come from foreign venture capitalists and angel investors who are always attracted to their business ideas.

Speaking on the challenge of funding, Adefioye said one major reason why most startups do not have good funding is because most of them do not have good financial books and appropriate accounting records. He cited an International Finance Corporation (IFC) report that states that there is $158 billion credit gap that exits within the Nigerian SME space.

“Investors and banks wants to be sure that the solution is commercially viable, with the capacity to pay back whatever amount is invested in the solution or business.

“One of the funding challenges of SMEs, which cut across tech startups, is that they do not have proper financial books to keep records of transactions, and it is the reason why local banks do not invest in SMEs and startups,” Adefioye said.

Eniolorunda of TeamApt, who also acknowledged the challenges of funding, attributed it to two factors. These he described as fear of immediate returns on investment and lack of understanding on the part of investors about the risks involved in startup companies.

He explained that local investors are more interested in immediate returns on their investment rather than investing in long-term ventures.

He, however said most Nigerian startups get foreign funding because the foreign investors understand better the risk part of the business and they are more money abroad than local. He also said getting funding outside, boosts the profile of a startup.


Collaboration is key and industry players are of the view that startups need to collaborate with each other to develop robust solution with high commercial value. There is also need for collaboration between fintechs and the industry regulator in order to provide a favourable work environment that will not be scuttled by harsh regulatory policies implementation.

Adefioye said there would be need for collaboration between digital banks being sort after by fintechs and the traditional commercial banks, because their services would be complementary, for improved customer experience. He said there has been mergers and acquisitions in the fintech space and there would be more of that going forward, through workable collaboration among startups.

The Future of Fintech

Giving insight to the future of Fintech in Nigeria, the Co-founder and CEO of Appzone, a Fintech company, Mr. Obi Emetarom, said: “Fintech is transforming the way financial services work in Nigeria and is expected to completely replace brick and mortar operations within five to ten years. Fintech platforms will significantly reduce the cost of delivering financial services to the extent that micro, consumer and SME customer segments that were previously unprofitable to service will become attractive targets for innovative new offerings.”

According to him, “Consequently, access to finance will become ubiquitous, consumer spending power will increase through access to loans, velocity of money will accelerate through digital payments and idle funds within the economy will be captured more effectively through savings. The increased efficiency in deployment of latent wealth towards productive activities will inject new funds into the productive economy and effectively stimulate economic growth.”

Building Successful Startups

Emetarom of Appzone, said: “To be successful, a startup has to find a pressing need amongst a large enough target customer base and develop the competences to meet such need better than any other organization in a profitable way. Achieving this goal requires a combination of dogged relentlessness, flexibility to adjust/iterate strategy as much as required, and openness to learn from the business environment very quickly. It also requires finding a small highly talented core team and selling them a compelling vision. To become successful, a start-up has to find very creative ways to get maximum value from extremely limited resources while managing cash wisely to ensure that it stays solvent.”