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 Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.65 per cent gain on Friday, December 13, boosted by three equities admitted on the trading platform.
On the last trading session of the week, Okitipupa Plc appreciated by N2.70 to settle at N29.74 per share versus Thursday’s closing price of N27.04 per share, FrieslandCampina Wamco Nigeria Plc added N2.49 to end the session at N42.85 per unit compared with the previous day’s N40.36 per unit, and Afriland Properties Plc gained 50 Kobo to close at N16.30 per share, in contrast to the preceding session’s N15.80 per share.
Consequently, the market capitalisation added N6.89 billion to settle at N1.062 trillion compared with the preceding day’s N1.055 trillion and the NASD Unlisted Security Index (NSI) gained 19.66 points to wrap the session at 3,032.16 points compared with 3,012.50 points recorded in the previous session.
Yesterday, the volume of securities traded by investors increased by 171.6 per cent to 1.2 million units from the 447,905 units recorded a day earlier, but the value of shares traded by the market participants declined by 19.3 per cent to N2.4 million from the N3.02 million achieved a day earlier, and the number of deals went down by 14.3 per cent to 18 deals from 21 deals.
At the close of business, Geo-Fluids Plc was the most active stock by volume on a year-to-date basis with a turnover of 1.7 billion units worth N3.9 billion, followed by Okitipupa Plc with the sale of 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.3 million units sold for N5.3 million.
In the same vein, Aradel Holdings Plc remained the most active stock by value on a year-to-date basis with the sale of 108.7 million units for N89.2 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with a turnover of 297.3 million units worth N5.3 billion.
By Adedapo Adesanya
The Naira appreciated further against the United States Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM) by N1.50 or 0.09 per cent to close at N1,533.00/$1 on Friday, December 13 versus the N1,534.50/$1 it was transacted on Thursday.
The local currency has continued to benefit from the Electronic Foreign Exchange Matching System (EFEMS) introduced by the Central Bank of Nigeria (CBN) this month.
The implementation of the forex system comes with diverse implications for all segments of the financial markets that deal with FX, including the rebound in the value of the Naira across markets.
The system instantly reflects data on all FX transactions conducted in the interbank market and approved by the CBN.
Market analysts say the publication of real-time prices and buy-sell orders data from this system has lent support to the Naira in the official market and tackled speculation.
In the official market yesterday, the domestic currency improved its value against the Pound Sterling by N12.58 to wrap the session at N1,942.19/£1 compared with the previous day’s N1,954.77/£1 and against the Euro, it gained N2.44 to close at N1,612.85/€1 versus Thursday’s closing price of N1,610.41/€1.
At the black market, the Nigerian Naira appreciated against the greenback on Friday by N30 to sell for N1,650/$1 compared with the preceding session’s value of N1,680/$1.
Meanwhile, the cryptocurrency market was largely positive as investors banked on recent signals, including fresh support from US President-elect, Mr Donald Trump, as well as interest rate cuts by the European Central Bank (ECB).
Ripple (XRP) added 7.3 per cent to sell at $2.49, Binance Coin (BNB) rose by 3.5 per cent to $728.28, Cardano (ADA) expanded by 2.4 per cent to trade at $1.11, Litecoin (LTC) increased by 2.3 per cent to $122.56, Bitcoin (BTC) gained 1.9 per cent to settle at $101,766.17, Dogecoin (DOGE) jumped by 1.2 per cent to $0.4064, Solana (SOL) soared by 0.7 per cent to $226.15 and Ethereum (ETH) advanced by 0.6 per cent to $3,925.35, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.
By Dipo Olowookere
For the fourth consecutive trading session, the Nigerian Exchange (NGX) Limited closed higher on Friday by 0.63 per cent on sustained renewed buying pressure.
Apart from the energy and industrial goods sectors which closed flat, every other sector ended in the green territory, according to data obtained from the bourse.
Business Post reports that the insurance index appreciated by 1.52 per cent, the banking space improved by 0.63 per cent, and the consumer goods counter expanded by 0.46 per cent.
As a result, the All-Share Index (ASI) gained 617.47 points to settle at 99,378.06 points compared with the preceding day’s 98,760.59 points and the market capitalisation went up by 375 billion to close at N60.242 trillion, in contrast to Thursday’s closing value of N59.867 trillion.
The volume of transactions on Customs Street yesterday grew by 11.13 per cent to 544.2 million shares from the 489.7 million shares transacted a day earlier.
The value of transactions increased during the session by 49.30 per cent to N10.6 billion from N7.1 billion and the number of deals went up by 1.93 per cent to 8,464 deals from the 8,304 deals posted in the previous trading session.
The busiest equity for the trading day was Japaul with the sale of 71.7 million units valued at N158.0 million, eTranzact exchanged 70.7 million units worth N477.5 million, Tantalizers sold 57.3 million units for N101.2 million, FCMB traded 33.0 million units worth N297.3 million, and Universal Insurance transacted 27.1 million units valued at N9.6 million.
A total of 36 stocks ended on the gainers’ chart, while 15 stocks finished on the losers’ table, indicating a positive market breadth index and strong investor sentiment.
The trio of Aradel Holdings, Ikeja Hotel and Caverton gained 10.00 per cent each to trade at N550.00, N8.80, and N1.98, respectively, as Africa Prudential rose by 9.87 per cent to N17.25 and Golden Guinea Breweries soared by 9.64 per cent to N8.64.
On the flip side, Austin Laz lost 10.00 per cent to close at N1.62, ABC Transport crashed by 8.00 per cent to N1.15, Royal Exchange slumped by 7.69 per cent to 60 Kobo, Secure Electronic Technology plunged by 5.26 per cent to 54 Kobo, and The Initiates crumbled by 4.26 per cent to N2.25.
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