Judging from the daily fintech news that comes from Nigeria’s fintech space, it’s understandable when people jump to the conclusion that the fintech space is saturated. However, there are still many untapped opportunities just waiting for the right strategy and execution.
Despite the notable competition in the fintech space, more Nigerians are still unbanked or underbanked and lack the necessary payment infrastructure. Fintechs have to jump at the chance to provide improved propositions across the value chain to address problems with affordable payments, quick loans, and flexible savings and investments, among others.
Fintech has only ever concerned itself with payments in Nigeria and throughout Africa. There are 573 fintech startups in Africa. However, very few cover niches such as lendtech, banktech (digital and neobanks), insurtech, blockchain, and cryptocurrency. Investing and trading, as well as managing personal finances, are niches that can be covered by a number of additional fintech verticals.
Nigeria has 144 fintech startups. Payments, mobile money, and digital banking account for 38% of the fintech market; lending accounts for 23%; savings, investments, and crowdfunding account for 15%; infrastructure and business services account for 13%; cryptocurrency accounts for 8%; and insurtech accounts for 3%.
Per number, Nigeria and Africa need more fintech. The USA with a population of 330 million has over 8,775 fintechs. UK with a population of 68 million) has over 2,500 fintechs. Nigeria with 200 million people has about 144 fintechs.
Moreso, insurtech accounting for just 3% of fintech in Nigeria points to a caveat and opportunity for founders.
Insurtech Opportunity
Insurance, across all segments, represents an untapped opportunity for those who can use technology to provide affordable healthcare premiums, improve insurance distribution, and also create differentiated pricing based on customer data.
A totally online-only insurance company in Nigeria is now viable because of the development of insurtech. Because it will save money on buildings and other industrial artifacts, the nation will benefit greatly from it.
There is still a gap in the market because there isn’t currently an authorized, completely digital insurance provider that spans the entire value chain. Several companies, including Casava, Reliance, CompareIn, and Autogenius, are developing incredible innovations in this field, but most are still in the early phases.
Building a fully digital insurance firm in Nigeria will be more challenging given how challenging it is to do business generally. However, there is still a chance to create a sizable and revolutionary insurance company. Insurtech can assist in maximizing the value of insurance in Nigeria and expanding the industry. However, that can only take place if the founders decide to do so.
Nigerian insurtech is a mostly unexploited technology sector. There is still inertia in the insurance sector. Overall, the Nigerian government ought to develop laws that make it simpler for people to participate in the insurtech industry. I think NAICOM needs to liberalize the market, by licensing carefully vetted Insurtech firms.
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