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Fintechs key to bridging financial inclusion gap in Africa



Financial inclusion

BY: Ebehijie Momoh [SVP, General Manager West Africa at Mastercard]

With many countries across the globe still under lockdown, perhaps more than ever before, there is a dire need to strengthen financial institutions and develop robust payment systems. This has become pertinent not only to keep people safe, but also as a means to extend financial inclusion, especially among the vulnerable in this challenging economic environment.

On Thursday, The Economist Intelligence Unit launched a report titled State of play: Fintech in Nigeria, sponsored by Mastercard and MTN Group.

The report examines the key trends in Nigeria’s fintech sector and assesses both industry drivers and impediments to further growth.


SVP, General Manager West Africa at Mastercard, Ebehijie Momoh

Some of the key takeaways from the report are:

  • Nigerian fintechs are branching out from payments into lending, micro-investment, wealth management, peer-to-peer transfers and insurance.Payments and remittances are the most developed sub-sector to date.

The country has seen a surge of new and simplified apps to help merchants, businesses and consumers. Mainstream banks, initially slow to react to the digital era, have quickly adapted to offer apps and tools in areas like loans, while non-traditional players—including telecom companies and retailers such as supermarkets—are entering the finance space.

  • Nigeria’s regulatory environment balances innovation and consumer protection but must continually evolve to respond to market dynamics.The Central Bank of Nigeria has passed laws and regulations to promote digital payments and allow more actors to enter the space, boosting competitiveness and consumer choice. But it is balancing these with consumer protections through its cybersecurity framework and data protection regulation.

Recent reforms, such as easing entry of start-ups into the capital markets and the creation of a fintech sandbox, could also lead to an enrichment of the ecosystem. While there is no fintech-specific law as yet, a sector roadmap provides overarching direction to the industry. A legal framework may prove necessary to manage the emergence of new types of fintech and accelerate fintech solutions for “insurtech” and wealth management.

  • To develop and flourish, Nigerian fintech needs to address shortcomings in the broader ecosystem. While venture capital investment is forthcoming, the majority comes from abroad with Nigerian investors currently playing a small role. As the sector matures, skills gaps are emerging outside of product development in areas such as business management and marketing.

Given the challenges that fintechs in all markets are facing in terms of profitability, expertise in business management and corporate governance is needed. Some experts question whether fintech has truly moved the needle on financial inclusion, believing that it is easing financial transactions for those already in the system.

But the jury is still out. Although a causal link with the rise of fintech is unclear, surveys conducted by Enhancing Financial Innovation and Access, a financial sector development organisation, reveal that the percentage of financially-excluded adults in Nigeria reduced from 41.6% in 2016 to 36.8% in 2018.

As a global fintech leader, Mastercard is proud to support Nigeria and the rest of Africa in digitization efforts for a more inclusive economy.

The Fintech in Africa story is already one of the world’s greatest tech-success stories — Africa’s fintech industry is expected to be worth more than $3bn in 2020 (according to Ecobank research).

And according to a 2016 study, The long-run poverty and gender impacts of mobile money, fintechs have lifted almost 200,000 households out of extreme poverty, and enabled almost the same number of women to move from subsistence farming into business.

At Mastercard, we believe that fintechs are contributing to the rapid digital transformation that makes lives more convenient, simpler, and rewarding – especially across Africa.

We firmly believe that fintechs, and subsequently financial inclusion can drive growth and prosperity. This is why we have pledged to bring a total of 1 billion people and 50 million micro and small businesses across the globe into the digital economy by 2025. As part of this effort, there will be a direct focus on providing 25 million women entrepreneurs with solutions that can help them grow their businesses.


To further simplify the way we work with fintechs, in 2019 we launched Mastercard Accelerate, a global initiative that also gives them access to everything they need to grow quickly. Offering a simple, single entry-point to our company’s wide portfolio of specialized programs, Mastercard Accelerate gives start-ups and emerging brands support and assistance for every stage of their growth and transformation, from market entry to global expansion.

Accelerate comprises a range of award-winning programs that have helped participants all over the world access and benefit from Mastercard’s ecosystem, customers and innovations.

These are Mastercard Fintech ExpressMastercard EngageMastercard Start Path and Mastercard Developers.

Mastercard Fintech Express – Provides easy access to a customized set of rules, relevant resources and digital-first services designed to address the unique needs of fintechs and enable program launch and global expansion with speed.

Mastercard Engage – Connects fintechs to thousands of Mastercard technology partners, making it quicker and easier to work together. We launched this in Lagos and Nairobi in April 2019 with hundreds of fintechs already signed to our platform.

Mastercard Start Path– Invites later-stage startups to participate in a 6-month program, providing opportunities to scale and secure strategic investments.

Mastercard Developers – Provides APIs for everything, empowering engineers with the ability to access Mastercard payment, security and analytics services via simple, user-friendly documentation, SDKs and sample code for the top programming languages.

I personally love what we are doing with Start Path where we invite later-stage startups to participate in a 6-month program, providing opportunities to scale and secure strategic investments. More than 200 companies have participated in the Start Path’s program since its founding in 2014 and those companies have collectively gone on to raise $1.5B in capital.

Across Africa, over five African fintech’s including three from Nigeria have run through this programme including, Flutterwave, Netplus, Kasha, Mfarmpay, Lidya and Lipa Later.

Nigeria is rapidly progressing in the digital space – becoming increasingly more connected. Through our programs with fintechs, we are bringing together an ecosystem of key players at different touchpoints. Together, we are delivering innovative digital solutions that have a far-reaching impact and realize the true potential of inclusive growth across the country. This is the future and we are here for it.


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