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  • Tech - News - Startups
  • Updated: September 27, 2020

GTBank, Access Bank, Paga, Carbon Compete Over Fintech Funds

GTBank, Access Bank, Paga, Carbon Compete Over Fintech Funds

Several fintech companies in Nigeria accounted for a large chunk of the funds invested in the African tech space in the last five years. The fintech companies consist mostly of the payment and lending apps. The only country that comes before Nigeria in the area of investment is Kenya.

It was gathered that Nigerian fintech raised $122 million of the $491.6 million African tech startups raised last year - this means Nigeria accounted for 25 percent of the funds, with Kenyan fintechs securing $149 million during the same period.

Nigerian Fintechs Conquering African Tech Space

Over $600 million has been raised by Fintech companies in Nigeria since 2015, this is according to McKinsey report titled “Harnessing Nigeria’s Fintech Potential”. It was stated that the payment and lending apps have been the most lucrative Fintechs in Nigeria's market.

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Payment apps like Paga, Migos, OPay and Quickteller have seen their penetration grow alongside lending apps such as Carbon, Renmoney and Migo. Their success in the Nigerian market have lured GTBank and Access Bank to compete in the market with their loan product, Quick Credit and Quickbucks.

Factors Driving The Fintech Market In Nigeria

The Fintechs in Nigeria have been able to lure sizeable investment due to growing youth population, increasing smartphone penetration and the drive to improve financial inclusion has led to the rising acceptance of Fintechs in Nigeria.

“The factors driving growth in each of these segments vary. Payment-focused solutions have surged over the past two years, spurred in part, by the central bank’s financial inclusion drive and favorable regulatory policies, including revised Know Your Customer (KYC) requirements for lower-tier accounts and incentives, to accelerate development of agent networks across the country.

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"Paga, OPay, Cellulant, and Interswitch’s QuickTeller compete with mobile banking applications and bank unstructured supplementary service data (USSD) channels to send and receive transactions and bill payments.

“Fintech activity in lending is picking up, thanks to the fact that fintechs are able to leverage payment data to determine lending risk more easily, and utilize smartphones as a distribution channel.

"For example, fintech startups such as Carbon and Renmoney have successfully leveraged alternative credit-scoring algorithms, to provide instant, unsecured, short-term loans to individuals.

"A few fintechs, such as Migo, have also stepped up to offer unsecured working-capital loans to SMEs with minimal documentation. Banking fintech solutions have been fast followers here, with leading banks launching digital lending platforms like Quick Credit by GTBank and Quickbucks by Access Bank.” The McKinsey report disclosed.

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