Economy
Payments, Trading and Crowdfunding are Boosting Nigeria’s Fledgeling Fintech Sector
While Nigeria’s financial technology sector is not exactly booming, it shows steady growth signs with promise for the short, medium, and long term. Over the last 12 months, Nigeria has witnessed the fintech sector emerge and take significant strides, especially when compared to data from 2020. For example, the value of all instant payments made in 2021 was more than N241 trillion, almost double that of 2020’s figures.
But it is not just payments where there is growth and potential. Overall, in 2021, nearly $1 billion was pumped into the Nigerian startup sector, which was a whopping 501% more than in the previous year. It now ranks second in Africa in terms of funding and investment for startups, equivalent to 41% of what reaches the entire continent. Not only this, but three different Nigerian startups all hit a valuation of $1 billion, becoming what is known as a “unicorn”.
Trading companies
In the first four months of 2022, the top 10 Nigerian stock broking firms traded some NGN 579 billion in stocks, over 63% of the country’s total. The country has a population of over 200 million people, with more and more coming online every year. Recent figures from Statista show that over half of the population is online, meaning many are gaining interest in trading and other forms of investment. According to data from various trading stakeholders, domestic trading transactions accounted for a significant amount (78%) of the market, demonstrating the interest of locals.
There is widespread interest in various sectors such as forex, stocks, and of course, CFD trading. The latter, short for contract for difference, is popular due to the fact there is no need to purchase the asset or security, instead, the trader simply estimates how much they think the value will rise or fall. Various sources put the number of active traders in the country at around 300,000, a number which has shot up over the last two years and is expected to grow at a steady pace.
Payment companies
Digital payment companies have done exceptionally well over the last year. Out of the new Nigerian unicorns, Flutterwave made significant waves along with Interswitch, Moove and Quickteller. Flutterwave managed to raise some $250 million in funding back in February, while Moove raised $105 million. These kinds of sums are significant for the country and set a promising precedent for the years to come.
Other signs of positivity include collaborations with big names such as Flutterwave with Paypal, Paystack with Apple Pay, and Carbon with Visa. There is also growth in alternative banking models that aim to serve the unbanked and provide better access to financial systems to those living in rural areas.
Credit and funding platforms
Due to challenges with the unbanked and a lack of access to conventional lending solutions, many Nigerians look to other solutions for financing their startups. These include crowdfunding which has taken off in a big way in the country. As it can be expensive to borrow from traditional financial institutions, crowdfunding apps and platforms have become very popular with entrepreneurs.
In the agricultural sector, agritech companies are particularly fond of using such methods to raise all-important capital. There are many big crowdfunding companies in the country, such as ThriveAgric, Farmcrowdy, and Porkmoney. By the end of this year, Statista predicts it will be worth $1.98 million with a CAGR of almost 6% over the next few years.
The Nigerian fintech sector has plenty of potentials and shows signs of sustainable growth in the medium and long term. This will lead to a more financially literate society and more opportunities for entrepreneurs, startups, and the community as a whole.
By Aduragbemi Omiyale
The deadline for the recapitalisation of the Nigerian pension industry has been extended by six months to June 2027 from December 2026.
This extension was approved by the National Pension Commission (PenCom), the agency, which regulates the sector in the country.
Addressing newsmen on Thursday in Lagos, the Director-General of PenCom, Ms Omolola Oloworaran, explained that the shift in deadline was to give operators more time to boost the capital base, dismissing speculations that the exercise had been suspended.
“The recapitalisation has not been suspended. We have communicated the requirements to the Pension Fund Administrators (PFAs), and we expect every operator to be compliant by June 2027. Anyone who is not compliant by then will lose their licence,” Ms Oloworaran told journalists.
She added that, “From a regulatory standpoint, our major challenge is ensuring compliance. We are working with ICPC, labour and the TUC to ensure employers remit pension contributions for their employees.”
The DG noted that engagements with industry operators indicated broad acceptance of the policy, with many PFAs already taking steps to raise additional capital or explore mergers and acquisitions.
“You may see some mergers and acquisitions in the industry, but what is clear is that the recapitalisation exercise is on track and the industry agrees with us,” she stated.
PenCom wants the PFAs to increase their capital base and has created three categories, with the first consists operators with Assets Under Management of N500 billion and above. They are expected to have a minimum capital of N20 billion and one per cent of AUM above N500 billion.
The second category has PFAs with AUM below N500 billion, which must have at least N20 billion as capital base.
The last segment comprises special-purpose PFAs such as NPF Pensions Limited, whose minimum capital was pegged at N30 billion, and the Nigerian University Pension Management Company Limited, whose minimum capital was fixed at N20 billion.
By Adedapo Adesanya
Three securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 0.68 per cent on Thursday, December 18.
According to data, Central Securities Clearing System (CSCS) Plc led the losers’ group after it slipped by N2.87 to N36.78 per share from N39.65 per share, Golden Capital Plc depreciated by 77 Kobo to end at N6.98 per unit versus the previous day’s N7.77 per unit, and FrieslandCampina Wamco Nigeria Plc dropped 19 Kobo to sell at N60.00 per share versus Wednesday’s closing price of N60.19 per share.
At the close of business, the market capitalisation lost N16.81 billion to finish at N2.147 billion compared with the preceding session’s N2.164 trillion, and the NASD Unlisted Security Index (NSI) declined by 24.76 points to 3,589.88 points from 3,614.64 points.
Yesterday, the volume of securities bought and sold increased by 49.3 per cent to 30.5 million units from 20.4 million units, the value of securities surged by 211.8 per cent to N225.1 million from N72.2 million, and the number of deals jumped by 33.3 per cent to 28 deals from 21 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc remained the most traded stock by value with a year-to-date sale of 5.8 billion units valued at N16.4 billion, followed by Okitipupa Plc with 178.9 million units transacted for N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
Similarly, InfraCredit Plc ended as the most traded stock by volume on a year-to-date basis with 5.8 billion units traded for N16.4 billion, trailed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.7 million, and Impresit Bakolori Plc with 536.9 million units exchanged for N524.9 million.
By Dipo Olowookere
The All-Share Index (ASI) of the Nigerian Exchange (NGX) Limited has again crossed the 150,000-point threshold on Thursday as the demand of for local intensifies.
The market was up by 0.35 per cent during the session, with the NGX index inching higher by 520.23 points to 150,363.05 points from the previous day’s 149,842.82 points and the market capitalisation climbed by N332 billion to N95.857 trillion from N95.525 trillion.
During the session, the consumer goods index grew by 1.23 per cent, the banking counter expanded by 0.56 per cent, and the energy sector appreciated by 0.05 per cent.
However, the insurance industry went down by 0.23 per cent, while the commodity and the industrial goods sectors closed flat.
Nestle Nigeria gained 10.00 per cent to trade at N1,958.00, Guinness Nigeria improved by 9.98 per cent to N289.70, Aluminium Extrusion Industries rose by 9.76 per cent to N11.25, DAAR Communications soared by 9.20 per cent to 95 Kobo, and Mecure Industries surged by 9.13 per cent to N55.00.
On the flip side, Stanbic IBTC lost 9.33 per cent to settle at N95.20, Lasaco Assurance went down by 9.09 per cent to N2.50, Africa Prudential slipped by 8.82 per cent, Austin Laz depreciated by 8.82 per cent to N12.40, and Sterling Holdings crashed by 6.12 per cent to N6.90.
There were 35 price gainers and 26 price losers yesterday, implying a positive market breadth index and bullish investor sentiment.
During the session, a total of 839.8 million equities valued at N32.8 billion exchanged hands in 23,211 deals compared with the 5.9 billion equities worth N216.2 billion traded in 25,205 deals a day earlier, indicating a decline in the trading volume, value, and number of deals by 85.77 per cent, 84.83 per cent, and 7.91 per cent apiece.
The day’s busiest stock was First Holdco with a turnover of 385.6 million units sold for N15.6 billion, FCMB traded 76.0 million units worth N805.3 million, Lasaco Assurance exchanged 43.6 million units valued at N111.8 million, Access Holdings transacted 29.6 million units worth N616.8 million, and Chams sold 24.8 million units valued at N75.4 million.
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