Nigeria Drops in Global Fintech Ranking Despite 3 Unicorns

Despite producing new unicorns this year and having the highest number of fintech startups, Nigeria slipped five spots to rank 57th in the 2021 Global Fintech Ranking.

This is according to the new Fintech report released by Findexable, which identifies emerging hubs, fintech companies, and fintech trends across the globe. The index was first published in 2019.

Nigeria, which produced Africa's first fintech unicorn (Interswitch) has also seen the emergence of two new unicorns this year — Flutterwave and Chipper Cash.

The new ranking, powered by Mambu, shows that 2020 was a year in which the financial technology (‘fintech’) sector expanded globally, building upon a surge in demand for technology that increases access to digital finance.

Kenya, home of Safaricom’s M-Pesa, solidified its lead in Africa, rising 11 spots to 31st globally, 26 spots above Nigeria.

South Africa also ranked higher than Africa’s largest economy even though it fell 2 spots globally to rank 44th on the Index.

Nigeria, on its part, remained third in Africa but failed to make the global top 50 fintech ecosystem. Other countries in the top 5 for Africa include Seychelles (59) and Rwanda (61).

Lagos' Ranking Nosedives

Nigeria’s commercial nerve centre, Lagos, slumped 22 places to rank 93rd among cities in the world with thriving fintech ecosystems.

While Lagos slumped, Nairobi, jumped 26 places to rank 37th on the global standings. This makes the Kenyan capital the only African city to make the list of top 50 fintech cities around the globe.

South Africa’s Cape Town and Johannesburg comes in at numbers 97 and 99th after dropping 10 and 37 spots respectively. Cairo completes the top 5 African cities after ranking 117 globally.

Accra, Ghana’s capital city, dropped 28 places to rank 151 on the global ranking of cities.

Africa is the New Tech Hub

The number of African countries on the global fintech rankings has risen to 13 with the debut of 7 newcomers. The newcomers include the Seychelles, Rwanda, Tunisia, Zimbabwe and Somalia.

This means that in the last year, fintech startups in these 7 African countries have grown, with each having more than 10 fintech startups.

In addition to that, the fact that Africa contributed 7 out of the total 20 new countries to join the index shows it’s one of the fastest-growing fintech regions in the world.

According to the report, emerging markets are natural sources of fintech innovation given the hunger for financial services among young, digitally savvy but underbanked populations.

It added that the giant populations in the region helped, providing domestic companies with the opportunity to scale before needing to consider entering foreign markets.

The pandemic was also a significant accelerator of both the speed and scale of fintech growth in many of these less developed countries.

In Nigeria for example, as queues to enter physical banks lengthened due to capacity restrictions during the pandemic, customers turned to digital banks, some of which saw customer enrolments triple.

Unsurprisingly the United States and the United Kingdom still top the rankings list globally. However, some countries like Israel in the Middle East and others in the African region have broken into the top 5.

The report shows that although London, New York and San Francisco are still global centres of development, the fintech industry is becoming more geographically diverse.