Nigeria: We are Concerned that Fintechs will Outperform Traditional Banks, says CBN

The Central Bank of Nigeria (CBN) has warned that traditional banks will soon lose ground to fintechs in terms of performance.

Deputy Governor for Financial Systems Stability and CBN Governor Godwin Emefiele waved the red flag yesterday in Abuja at the 28th Annual In-House Executive Seminar on “Digitalization of Money and Monetary Policy in Nigeria.”

In his speech, Emefiele mentioned that there is “the concern of fintech outcompeting traditional banks, with attendant profitability risk,” or that fintechs will certainly surpass traditional banks.

The fintech sector in Nigeria continues to be attractive to investors, and a number of entrepreneurs are embracing the buzz around developing practical solutions for the continent’s expanding consumer base.

The ecosystem attracted $507m in investment funding from the beginning of 2022 till August.

This is according to a report by ‘Disrupt Africa on the Nigerian ecosystem’, Nigeria’s fintech has been the best-funded of any sector each year since 2015, and investment was on the increase.

It stated, “So far in 2022, the space has already attracted $507m – accounting for 67.8 percent of Nigeria’s total funding for the year.

The growth in the amount of investment going to Nigeria’s fintech sector is also astonishing, particularly in the past couple of years when the total amount of fintech funding has begun to top the half-billion dollar mark.”