Fintech penetration at just 35% in Nigeria with 9 out of 10 transactions still settled in cash
Fintech penetration in Nigeria stands at just 35%, with this proportion of the population having access to the technologies, according to the latest report.
According to NiBox, a firm that develops self-service kiosks that provide access to financial services in cash-intensive economies, 35% of the market capitalization of fintech companies in Nigeria is due to a lack of infrastructure resulting in financial exclusion for the majority of the country’s population.
According to Brian Manuwuike, Chief Product Officer, NiBox:
“The problem with inclusion in Nigeria is not only a lack of infrastructure but also a relatively low smartphone penetration.
At the moment it is around 35 percent, which means that most fintech products are limited to 35 percent of the population at best.”
– Chief Product Officer, NiBox
Nibox kiosk customers can access several financial services, including:
- Pay bills
- Make a deposit
- Make a withdrawal
- On board various financial products
According to Brian, infrastructural barriers are responsible for the reliance on cash in the Nigerian economy, where 9 out of 10 transactions are still settled in physical cash.
Moreover, in the latest 2022 State of Industry Report on Mobile Money by GSM, we can see that the lack of relevancee is one of the main barriers to having a mobile money account in Nigeria:
Some of the reasons for the lack of relevance to owning a mobile money account include:
- Preference for cash
- Existing options for transferring money
- People feel they can share mobile money accounts with friends and family
- Effective over-the-counter (OTC) solutions
- People who don’t have money
“Nigeria needs more investment in the offline infrastructure where consumers can access financial products/services with cash and without a smartphone. Offline distribution will drastically really drive financial inclusion.”
– Chief Product Officer, NiBox
Despite adoption challenges, the Central Bank of Nigeria (CBN) hopes that eNaira will lead to the widespread use of digital payments, while reducing the cost of printing and processing cash and deepening financial inclusion.
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