Nigeria: World Bank Highlights Fintechs as Crucial to Bridging Nigeria’s Financial Inclusion Gap

Fintech companies can significantly improve financial inclusion in Nigeria by leveraging mobile money, digital payment platforms, and digital wallets to reach underserved populations, according to a World Bank report.

The World Bank noted that Nigeria’s fintech sector constitutes about one-third of Africa’s financial services market. This market is projected to grow at a rate of approximately 10 percent per annum, potentially reaching $230 billion in revenues by 2025.

Despite this growth, the World Bank report reveals that about half of Nigeria’s adult population remains unbanked or underserved, largely due to the constraints of traditional banking infrastructure.

“This is particularly evident in rural and underserved areas, where physical bank branches are sparse or entirely absent,” the report stated.

The World Bank highlighted Quickteller Paypoint, an agency banking platform launched by Interswitch, as a key driver of financial inclusion. According to the International Finance Corporation, agency banking involves partnerships between traditional banks and local businesses or individuals, known as agents, who provide essential financial services such as cash deposits, withdrawals, and payments.

To broaden their reach, fintechs are increasingly collaborating with traditional banks to customize services that meet the evolving needs of Nigerian consumers and businesses.

“These collaborations combine traditional banking products like savings accounts and bill payments with innovative technology solutions such as lending platforms, virtual investment advisors, digital insurance products, and digital remittance solutions,” the report elaborated.

A GSMA report highlighted that Sub-Saharan Africa (SSA), driven by Nigeria, Ghana, and Senegal, continues to lead the world in mobile money adoption. In 2023, the mobile money market in SSA was valued at $912 billion.

GSMA, the global body for telcos, noted that the growth of mobile money has led to an increase in digital payment usage in Nigeria and has enhanced access to digitally enabled services.

“Today, millions of users are making or receiving payments, securing productive credit to meet short-term financing needs, paying for government services, or accessing savings and insurance products to protect themselves from financial shocks,” said Mats Granryd, Director General of GSMA.