Strategy Note /

The ultimate guide to Nigeria fintech

  • Nigeria attracted over half of the continent’s total fintech venture funding last year; investors see a big growth story

  • Poor mass market access from banks offers a strong growth opportunity for fintechs; weak tech infrastructure is a hurdle

  • Strategic priorities: entering new product areas and geographies. Challenges: financial illiteracy, security, regulation

The ultimate guide to Nigeria fintech
Rahul Shah
Rahul Shah

Head of Corporate & Thematic Research

Rabail Adwani
Rohit Kumar
Tellimer Research
23 September 2021
Published byTellimer Research

Nigeria is start-up investors’ favourite market in Africa, attracting over half of the continent’s US$160mn total fintech venture capital funding in 2020. Compared with other large emerging markets, the country has one of the youngest demographics and lowest levels of financial inclusion, providing a fertile ground for fintech disrupters. Nigeria is home to four of the continent’s five fintech unicorns, highlighting the excitement early-stage investors see in the country’s fintech sector.

In this report, we discuss:

  • the fintech opportunity in Nigeria

  • the current state of Nigeria’s fintech landscape

  • the regulatory environment

  • fintechs’ success factors and plans

  • the key challenges limiting fintech growth

We catalogue over 250 fintechs making up Nigeria’s fintech ecosystem. And we profile the country's four fintech unicorns, plus five other firms that are capitalising on Nigeria's huge fintech growth opportunity.

Nigeria's low financial inclusion could drive fintechs’ success

Nigeria's financial penetration is low relative to other emerging markets – only two-fifths of the adult population have a bank account (versus a 70% median across our sample of 11 emerging markets). Access to bank branches and formal credit is also poor. Credit card penetration in Nigeria is mediocre, at 2.6% of the population aged 15+ (versus a 5.7% EM median). These metrics highlight the difficulties faced by ordinary Nigerians in accessing basic financial services.

Financial penetration in Nigeria lags EM peers

Technological sophistication stands below peer countries

Nigeria's technological indicators are also below other emerging market peers. Fixed broadband subscriptions (including cable modem and fibre to the home connections) are almost non-existent. Just 1.5% of manufactured exports (vs 4.7% EM median) can be classified as high technology, which points to a poor local skill base. In addition, the GSMA infrastructure score (which considers different aspects like network coverage/performance, network spectrum and technology enabling infrastructure factors) also lags peers; the main areas of weakness are in network coverage/performance and other technology enabling infrastructure.

Many start-up investors are clearly not letting these issues hold them back; technological advances can address some of these challenges (for example mobile data rather than accessing the internet via fixed lines). The size (206mn) and youth (median age of 18 years versus 28 for peer markets) of its population combine to make Nigeria one of the most exciting markets for disruptive business models.

Technological penetration in Nigeria lags EM peers

In the Appendix, we highlight how these financial and technology metrics place Nigeria in the bottom half of our emerging market fintech country rankings.

Nigeria's fintech ecosystem is extensive and well-diversified

Nigeria's fintech universe is wide-ranging but has a similar overall profile to global emerging markets, with payments and lending together accounting for 53% of the total landscape (close to the 52% EM average). The weight of software solutions (15%) is above the EM median (5%) and may reflect firms that are looking to service Nigeria's vibrant fintech network. Investech (11%) is also above the EM median of 8%; many Nigerians are keen to invest to help hedge their exposure to both high inflation (via high-yielding instruments) and NGN depreciation (via hard-currency investments). In this context, it is somewhat surprising that the weight of blockchain fintechs sector in Nigeria appears to be broadly on a par with EM peers (9%); Nigerians have been quick to accept cryptocurrencies despite the government's attempts to rein in their enthusiasm and the country ranks sixth globally in Chainalysis' cryptocurrency adoption index. In contrast, insurtech firms account for just 4% of the ecosystem (versus 5% at the global EM level). Nigeria's insurance density is weak; premiums are equivalent to just 0.5% of GDP compared to 13.4% for South Africa.

Nigeria's fintech ecosystem

Nigeria leads the African fintech funding arena

In 2020, funding flow to African fintechs amounted to US$160mn (up from US$107mn in 2019). Around 90% of this funding was concentrated on just three markets: Nigeria, South Africa, and Kenya. Nigeria was investors' preferred destination; it attracted US$89mn funding (56% of total) and 37 deals (37% of total).

African fintech start-ups' funding

Nigeria's tech start-up funding mix by sector

Fintechs are attracting the biggest share of tech start-up funding in Nigeria, taking 59% of the US$150mn that was raised in 2020 (an increase of 23% from the US$122mn raised across all sectors in 2019). 2020 funding was concentrated in 4 fintech deals: Flutterwave (US$35mn), Bitfix Gaming (US$15mn), Aella Credit (US$10mn), and Kuda (US$10mn). Globally, fintechs captured 18% of start-up funding in H1 2021, further highlighting investors keen interest in the Nigerian fintech opportunity.

Nigeria's tech start-up funding mix by sector

Fintech funding in 2021 is improving

There have been several large-scale Nigeria fintech funding rounds in 2021, adding Flutterwave and OPay to rarified list of African fintech unicorns. Interestingly, these transactions have closed even as mainstream investors continue to fret about capital controls and potential NGN devaluation. Many African fintechs are actually registered in other jurisdictions (eg Mauritius, Cayman Islands), which can help bypass some of these issues. In addition, these investors have a long-term horizon and hence are less affected by what may be seen as temporary difficulties.

Selected Nigeria fintech funding deals so far this year

Some other smaller fintech funding deals in 2021 so far include: Bankly (US$2mn), Cowryrise (US$3mn), Chaka (US$1.5mn), Okra (US$3.5mn), Mono (US$2mn), and PayHippo (US$1mn).

Key success factors for Nigeria fintechs

Based on comments from 15 Nigerian fintechs, the top factors driving their success include forming strategic partnerships, raising product quality, and targeting the financially excluded.

Strategic partnerships

Strategic partnerships help fintechs in many ways, such as diversifying their product mix, improving their service quality and/or expanding their client base. For example, Flutterwave has collaborated with PayPal, enabling PayPal users to pay African merchants for cross-border commerce. Interswitch has partnered with Kenya's Credit Bank to launch a multi-currency prepaid card as an alternate way to conduct electronic transactions. Paga has partnered with Visa to provide high quality mobile payment solutions for both merchants and consumers.

Product quality

Product quality is a broad term that includes factors like ease-of-use, product innovation, seamless execution, and speed of service. Fintechs have cited this as one of their top success factors in most of our surveyed emerging markets. Some Nigerian fintechs highlighting this as a key value proposition include Paystack (Payments), Carbon (Lending), and MyCoverGenius (Insurtech).

Targeting the financially-excluded

Nigeria's financial inclusion level is low. So there is a large target market for fintech firms serving unbanked/underbanked customers. Some fintechs focusing on this segment include OPay (Payments), PalmPay (Payments), and TeamApt (Software solutions).

Nigeria fintechs' key success factors

Nigerian fintechs’ plans

Based on comments from 17 Nigerian fintechs, top strategic priorities include introducing new products/services, and geographical expansion.

Introducing new products/services

Fintechs in Nigeria are actively looking to further expand and diversify their offerings by introducing new products, both within their existing sector and to move into new sectors. For example, Cashbox, a digital savings platform, plans to transform itself into an asset management firm and to launch a series of investment products. AutoGenius, an insurtech, has rebranded itself as MyCoverGenius to allow it to broaden its insurance product offering. Curacel, an AI-powered claim and fraud detection platform, plans to launch a cash advance product to provide working capital to healthcare providers, enabling them to continue providing necessary services without any turmoil.

Geographical expansion

The presence of large, financially underserved populations elsewhere in Africa can prove attractive for Nigerian fintechs seeking additional growth drivers, particularly where firms have already built up relevant, transferable expertise and have the necessary financial and management capacity. For example, Curacel (Insurtech) targets expansion into 10 new African countries by the end of this year. Appzone (Software solutions) plans to use its recent US$10mn Series A funding to expand into other African countries. Kuda (Payments) also plans to expand abroad to become a neobank for all Africans.

Nigeria fintechs' future plans

Key challenges for Nigeria's fintechs

Poor financial literacy

According to S&P's Global Finlit survey, in 2016 only 26% of Nigeria's adult population was financially literate, a lower level than most other emerging markets. For this survey, financial literacy is defined as knowledge of at least three of these four concepts: i) risk diversification, ii) inflation, iii) simple interest and iv) compound interest.

Financial literacy across emerging markets

Lack of trust

Digital payments and other innovative fintech products have huge potential to help financially underserved populations, but individuals need to build up trust in these new firms. Despite financial switching costs from traditional to digital providers typically being low, consumers are usually skeptical of new service providers.

Threat of fraud

Covid-related lockdowns have encouraged people to embrace digital working and digital consumption. But this has created more opportunities for internet fraudsters. According to a report by the Nigeria Inter-Bank Settlement System (NIBSS), the number of fraud attempts in digital banking in 9M 2020 grew by 186% yoy, to 46,126 cases causing losses of NGN5.2bn with a 93% success rate.

Regulatory restrictions

Regulators are continually adjusting the policy framework to catch up with the rapid changes that fintechs are bringing to the financial system. Their primary aim is to ensure financial stability and to protect personal data. As highlighted above, some of these regulatory changes are creating significant hurdles for fintechs that are active in areas like cryptocurrencies and foreign investments. Regulatory uncertainty can also dampen investor enthusiasm for the sector, as we have seen in other markets, such as China.

The regulatory environment for fintechs in Nigeria

The fintech regulatory environment has mixed characteristics. On one side, authorities are promoting open banking and QR-code payments systems, and introducing regulatory sandboxes. There is a high-level understanding that financial inclusion needs to improve, even if there has been limited tangible progress over the past decade. On the other hand, however, regulations are being tightened in key areas, such as cryptocurrencies, KYC rules and foreign investments.

Fintech-friendly regulatory developments

Open banking framework

The Central Bank of Nigeria (CBN) issued its regulatory framework for open banking in February 2021, making Nigeria the first African nation to have approved open banking. This regulation enables banks to share transaction data with other financial services industry players based on a four-tier risk categorisation:

  • Product information and service touchpoints (PIST) – Low risk

    Information provided by industry participants to customers, such as ATM locations, website addresses, quotes etc.

  • Market insight transactions (MIT) – Moderate risk

    Customers' statistical data, aggregated by products, services and segments.

  • Personal information and financial transactions (PIFT) – High risk

    Individual customer’s personal data such as quantity/type of accounts and individual transaction details.

  • Profile, analytics and scoring transaction (PAST) – High and sensitive risk

    For example, credit scoring of individual customers based on their income, expenditure, and gearing.

Quick response (QR) code payments framework

In January 2021, the CBN provided regulatory guidance to allow the use of QR codes to present, capture and transmit payment information across payments infrastructure in Nigeria. Under this framework, fintechs can offer QR codes as an alternate payment method, which could allow micro and small enterprises to more easily participate in the digital payments revolution.

Regulatory sandbox framework

Also in January 2021, the CBN issued a framework for a regulatory sandbox, a virtual testing space for fintechs in a controlled environment. The framework is aimed at encouraging innovation and provides a platform to test unique solutions that are not covered under current regulations.

MMS framework

In July 2021, the CBN issued two sets of mobile money services (MMS) regulations by dividing the sector into two models: bank-led and non-bank-led. Under the former model, a licensed bank (acting alone or in association with other banks/organisations) can deliver banking services through a mobile payments system while ensuring compliance with regulatory requirements. In the latter case, the non-banking organisation (other than telecommunications corporations) must first obtain a license from the CBN to provide mobile money services.

This framework makes no allowance for telecommunications firms to provide mobile money services, which are thus disallowed in Nigeria.

Unfavourable steps

The KYC process has become more cumbersome

In April 2021, according to an email notification sent to Paystack, the CBN suspended the use of bank verification number (BVN) validation services for fintechs and non-bank financial institutions. BVN, a unique verification number for people with a bank account in Nigeria, allowed fintechs to more easily conduct KYC processes to check for crimes like money laundering or fraud. Many fintechs had developed operations centred around BVN and for them this news caused disarray. The CBN may, instead, prefer to replace KYC processes with alternate forms of identification such as NIN (national identity card), international passport, phone number etc. However, the position is still not clear. Moreover, some of these alternative information sources, such as physical ID verification, are expensive and could make it uneconomic for firms to service lower-income individuals.

Constraint on trading foreign securities

According to a circular by Nigeria's Securities and Exchange Commission (SEC) in April 2021, investment platforms should only provide access to securities that are listed and traded on Nigerian registered exchanges and should stop trading unregistered foreign securities. In addition, capital market operators (CMOs) should abstain from partnering with online platforms to provide brokerage services for foreign securities. Recently, the CBN froze for six months the bank accounts of four investment platforms (Bamboo, Chaka, RiseVest and Trove). This was because the firms were accused of using foreign currency sourced from the Nigerian FX market to purchase foreign bonds and shares.

Cryptocurrency crackdown

In February 2021, the CBN prohibited regulated financial institutions from either dealing in cryptocurrency or facilitating payments for cryptocurrency exchanges and had mandated to close accounts of individuals or organisations dealing in cryptocurrencies with immediate effect. The reasons behind this prohibition include the opacity and vulnerability of cryptocurrency transactions to money laundering and terrorism.

Amended NITDA act

There have been talks to amend the outdated National Information Technology Development Agency Act 2007 (NITDA) to reflect more recent developments. While this would be a sensitive endeavour, the contents of a leaked draft amendment bill suggest technology companies may need to attain licenses, face tax levies and become subject to penalties if they violate the provisions of the act.

Nigeria's fintech unicorns

Most emerging market unicorns (ie start-up private companies valued at US$1bn+) are located in China. In Nigeria, there are 4 fintech unicorns out of 5 in the whole African continent (with the fifth member of this club being Senegals' Wave). All these African fintech unicorns operate primarily in the payments space.


Opera, a provider of browser, mobile payment, and artificial intelligence solutions, incubated OPay in 2018. Opera is headquartered in Oslo, Norway with additional offices in Europe, China and Africa. In July 2018, the firm listed its shares on Nasdaq; its market capitalisation currently stands at US$1.12bn. Opera services over 50mn registered users; 2020 revenues amounted to US$165mn. As of March 2021, Opera owned 13.1% of OPay. A related fintech asset is its 42% stake in Nano Bank, a provider of micro-lending services.

OPay is a platform that allows users to send and receive money, pay utility bills, save, and borrow money; it enables its customers to access smart financial services in a one-stop application. The company is based in Africa's most populous nation, Nigeria, with a secondary office in Egypt, which also has a sizeable unbanked/underbanked population. According to Bloomberg, the company's monthly transactions volume now exceeds US$3bn (up from US$2bn in December 2020). The firm has a network of over 300,000 agents and 8mn active users.

Last month, the company raised US$400mn Series C funding, led by Softbank, taking its valuation to US$2bn and adding OPay to Africa's small list of unicorns. OPay plans to utilise this funding to grow in Nigeria, Egypt and the Middle East. This is the largest fundraising of its type in Africa's tech scene (on a par with Jumia's Series C funding in 2016).

Chipper Cash

Chipper Cash, founded in 2018, enables free and instant P2P cross-border money transfers across Africa via its mobile application. Most of the company's operations are in seven African countries (Ghana, Uganda, Nigeria, Tanzania, Rwanda, South Africa and Kenya), but earlier this year the firm expanded into the UK and has plans to enter the US as well. Currently, it has 4mn users (up 33% yoy). As of November 2020, Chipper Cash was averaging 80,000 daily transactions. Last year, the company launched cards and crypto products and intends to launch its US stock product in Nigeria, Uganda and elsewhere on the continent.

In May 2021, Chipper Cash closed a US$100mn Series C funding round, led by SVB Capital, the investment arm of Silicon Valley Bank. This raised the company's total funding to US$152mn. It plans to use this funding to introduce new products/services and to grow its workforce by 100 (from a current employee base of over 200). Furthermore, this fundraise has allowed Chipper Cash to enter the billion-dollar club of African fintechs where a total of 5 companies exist now.


Flutterwave allows businesses to accept, in a secure environment, a wide variety of payment methods such as bank transfers, cards and mobile payments like MPesa. It supports offline and online operations, from both domestic and international customers. It currently serves customers in 12 African countries, plus the UK and US. Over 500,000 individuals use its 'Barter' app. Individuals can also access short-term loans to help finance Flutterwave purchases. In Nigeria, the firm charges c1.4-3.8% of the transaction value as its fee. Existing customers include Uber, and Jumia.

In March 2021, Flutterwave raised US$170mn in a Series C round from investors including Avenir Growth Capital, Tiger Global and Greycroft, valuing the company over US$1bn. In 2020, the firm raised US$35mn in a Series B round. Total investment now stands at US$225mn. Last year, it also announced a partnership with Worldpay FIS, for whom Flutterwave will be its payments provider in Africa. Flutterwave has additional partnerships with Alibaba and Visa.


Interswitch is a Nigeria-based payments infrastructure company that commenced operations in 2002, pioneering the switching infrastructure needed to facilitate card payments. The company has since then transformed its offer towards integrated payment systems, facilitating payments through different channels, including innovative online payment solutions. Interswitch has also diversified geographically beyond Nigeria to other African countries like Uganda, Gambia and Ghana.

Interswitch had shown interest in listing its shares on London Stock Exchange in 2016, but these plans were delayed due to the economic recession in Nigeria at that time. The firm again tried to list in 2019, but instead opted for a further private funding round led by Visa (20% stake for US$200mn), which granted it unicorn status (ie US$1bn+ valuation), making it the first private firm on the continent to earn this moniker. The company still has plans to go public, but the fresh timeline for an IPO has not been disclosed. 

Five Nigerian fintechs to watch


Carbon, founded in 2012, is a digital banking company that offers a wide range of services including savings, investments, payments and lending. In 2018, the firm made its financial statements public for the first time, which is rare for a privately-held African start-up, citing client trust and recruitment as reasons for the improved transparency. In 2020, the company had around 659,000 customers and processed US$241mn worth of payments (up 89% yoy), disbursed US$63mn in loans (up 9% yoy) and made investments worth US$33mn (up 365% yoy) on its platform. Recently, it partnered with Visa to offer both digital and physical card solutions to its customers.


Founded in 2016, Kuda gives its customers access to savings, lending and payments services from their mobile phones. Accounts can be opened within five minutes. It has a microfinance banking license from the Central Bank of Nigeria, issued in June 2019. In August 2021, Kuda had 1.4mn registered users as compared to 650,000 in March 2021. Recently, it secured a US$55mn Series B funding round on top of a US$25mn Series A funding round earlier in the year. Kuda will commit this funding to expand its services in Nigeria and to launch in other African countries.


PiggyVest, previously called, is the first saving and investment platform in West Africa. Since its launch in 2016, more than 3mn people have used its application for financial management. Initially, it began as a savings-only platform, but in 2019, three years after its launch, the firm rebranded as PiggyVest to be a one-stop application offering direct investment opportunities in addition to savings. Earlier this year, the start-up partnered with uduX, a music streaming service, to launch PopRev which allows people to invest in their favourite artist's music projects. Furthermore, it acquired, a wealth management application, which would transfer users of to PiggyVest without causing any interruption.


Paystack, founded in 2015, is a technology company providing payments solutions to businesses. So far, it has signed up more than 60,000 businesses in Nigeria, Ghana and South Africa. In October 2020, it was acquired by Stripe for over US$200mn. In May 2021, the company announced its official launch in South Africa to add to its existing presence in Nigeria and Ghana.


TeamApt, founded in 2015, provides payments infrastructure, digital banking and enterprise solutions to bridge the financial inclusion gap in emerging and frontier markets. Since its launch, the company has served over 15mn customers, 100,000 businesses, and some top-tier banks in developing countries. The company's product offerings include Moneytor (Digital banking), Monnify (Enterprise payment solutions) AptPay (Payment infrastructure), and Moniepoint (Agency banking platform). In July 2021, TeamApt closed an undisclosed Series B funding round, which it plans to utilise in expanding services to offer its customers and businesses digital banking beyond agency banking under Moniepoint. In addition, it has plans for geographical expansion to other African countries.

Nigeria’s fintech landscape

We have catalogued over 250 Nigerian fintechs that are actively looking to capture the huge growth opportunities that exist. These firms are active across the full spectrum of fintech activities, ranging from various payments and lending models to financial software and compliance.

Nigeria's fintech landscape


Nigeria ranks behind most other emerging markets in our fintech country ranking

We think fintechs are most likely to succeed in markets where financial access is currently poor, but where technology enablers are strong. Vietnam, Philippines and Egypt scan well from this perspective. Sub-Saharan Africa markets like Nigeria, Ghana and Ethiopia also have weak financial access; but in these markets, the technology infrastructure (such as cheap internet access, high tech exports or online security) is also poor. Accordingly, in our Fintech Country Rankings, Nigeria ranks roughly in the middle of the pack, nestled between India and Bangladesh. One aspect this ranking does not capture is scale; markets like India and Nigeria are more interesting to investors because of the ability for a winning business to capture a large revenue pool.

The table below summarises the results of our analysis. Countries with poor financial sophistication are shaded green, as this environment offers a key growth opportunity for fintech disrupters. Countries with strong technological infrastructure are also shaded green; fintechs in such markets are more able to capture growth opportunities.

Summarised Fintech Country Ranking scorecard