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Nigerian Fintechs: Quick and effective but can they be trusted?



Nigerian fintechs
Ugochukwu Festus, a businessman at the popular computer village in Lagos was in dire need of cash to clear his newly arrived goods (gadgets and electronics) at the Apapa Port.

He was well aware of what delay means and of course, he knew he could not approach his bank for a quick N2,000,000 loan.

A friend, who had seen one of the adverts of the digital loan startups advised Festus to approach one of them saying that he would receive the loan between 24 to 48 hours.

Armed with all the required documents and confident that he would get the loan as his friend had said, he visited the RenMoney office at Surulere, a highbrow area of the city to apply.

Fortunately for Festus, the ‘system did not reject his application’ having overheard that some people’s applications were rejected by the system without any tangible explanations.

The service was quick and effective. This is what most fintechs are known for. However, there are still trust concerns surrounding them.

Nigerian fintechs

Before going further, let’s identify some fintech companies by sectors:  

1.) Payment/Transfer: Paystack, Flutterwave,, Quickteller, Paga, Teamapt, Cellulant, Jumia Pay and Quickteller

2.) Savings/Investment: PiggyVest, Cowrywise, Kolopay and PayDay Investor

3.) Lending: Mines, Lidya, Carbon, Branch, KiaKia, RenMoney and

4.) Insurance: Health Management Organisations and Agric insurance startups among others.


Some of the aforementioned functions including payment/transfer, savings/investment, insurance and lending were unquestionably and exclusively reserved for the banks. These functions are now fully shared by different fintech companies entering Nigeria’s financial space.

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The disruption in the financial services industry is crucial to ensure that unique & innovative financial products are introduced to guarantee quick rendering of financial services without compromising laid down procedures and to enable Nigeria to reach the 60 million financially excluded Nigerians by 2020. This is the target the Central Bank of Nigeria has set for itself.

Banks are not sitting back…

Innovate or die. This is one of the popular lines you will hear in today’s tech world. It is either a business continue innovating or die a natural death.

Nigerian banks do not want to ‘die’. Many of them have evolved and are literally pushing back with their own financial products and services.

A bank like Guaranty Trust Bank now offers quick credit and salary advance to customers while Wema Bank has Alat, an app which you can use to save.

Interestingly, many of the fintechs have partnered with these banks. For example, your PiggyVest or Cowrywise savings are kept in the account of these companies with the banks. This makes it possible for anyone to withdraw their monies and save.

Customers desire quick and effective services but want to ‘trust’ the Fintechs.

After affordability, the next thing that a Nigerian customer is concerned about a company is how quick and effective their services are. The Nigerian customer is impatient.

Regardless, when it comes to their hard-earned finances, what is always at the back of their minds are two words: trust and reliability. They ask questions like- Is my money safe with them? Are they reliable?  For these two reasons, some Nigerians won’t transact with these fintechs.

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These group of Nigerians prefer to perform bank transactions using their bank’s USSD, bank app, online banking or other allied services associated with their bank or banks. They just do not trust the fintechs from their ownership down to their mode of operations. This is not a question of whether you belong to Generation Z or not.

How can fintechs become more trusted by Nigerians?


The aim of many of the major fintech companies is becoming a bank. But the question is can a customer leave their N1 million savings in their wallet without having to worry? This may be possible but there is still a question of trust.

Nigerian fintechs have been known to be effective and quick. Nevertheless, they need to start preaching the trust narrative in their services and campaigns. Not because they want to preach but because they actually are trustworthy and reliable.

The Central Bank of Nigeria seeing that fintech firms are being embraced by Nigerians said in a draft policy document in 2018 that fintech startups must have minimum shareholder funds ranging from $275,000 to $14 million before obtaining licenses for their operations. The CBN says these funds will help sanitise the sector.

This may or may not invest trust in the system but it will definitely ensure that only serious players enter Nigeria’s fintech sectors.

The fintechs are currently having a rollercoaster ride and hopefully, they will embed trust in their mode of operation and ensure that they get Nigerians not only in the urban areas but also in the hinterlands to trust their products & services without having any iota of doubt.

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Ahmed Kolawole is the Financial Advisor at PayTech.

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