How many more Fintech apps do Nigerians need?

Nigeria’s startup pitchmen love to tout “financial inclusion” as the holy grail. They claim that if only more people had slick new fintech apps, all would be well. It’s a convenient narrative – and a deceptive one. The truth is that Nigeria already has more than enough fintech platforms for payments, banking, and lending. Mobile wallets and digital banks abound; in fact, over 200 fintech companies call Nigeria home (Afriwise, 2023). From big players like OPay and Paga to countless online lending apps, the country is awash in digital finance tools. Yet millions remain poor or financially excluded – not for lack of apps, but for far more concrete reasons. The real bottlenecks are offline: unreliable electricity, bad roads, patchy internet, inflation, and weak institutions. In this provocative deep dive, we’ll expose how startup founders peddle an inclusion myth to investors while Nigeria’s true development needs go unmet.

Fintech Frenzy: A Market Saturated with Apps – It’s not 2010 anymore – Nigeria’s fintech scene is no barren desert; it’s a crowded bazaar. Fintech startups have multiplied rapidly, reaching about 217 companies by 2023 (Statista, 2023). These firms span mobile payments, digital banking, lending, insurance, and more. Ask a Lagosian how many finance apps they have on their phone and the answer might be “plenty.” OPay, PalmPay, Paga, Moniepoint, Kuda, FairMoney, Flutterwave, Interswitch, eTranzact, Chipper Cash – the list goes on. Many offer similar services, creating a redundancy of choices. In fact, OPay boasts over 40 million active users, while PalmPay claims over 30 million users (FIJ.ng, 2023). Paga has 23 million users and has processed N14 trillion (about $32 billion) over 15 years (Nairametrics, 2023). These aren’t small numbers; they indicate tens of millions of Nigerians already onboarded to digital finance.

If you’re “unbanked” in Nigeria today, it’s certainly not because no fintech has reached out. Paga alone created a network of over 100,000 agents (Nairametrics, 2023). Moniepoint and others have deployed POS terminals to market stalls nationwide. By 2022, there were 1.47 million mobile money agents registered across Nigeria (FRED, 2022). That’s roughly one agent per 80 Nigerians compared to one bank branch per 27,000 people (Techpoint, 2023). These human ATMs support everyday transactions in even semi-rural areas. As Paga’s CEO put it: “I’ve not met the Nigerian who has only one account” (Nairametrics, 2023).

So when a new startup founder claims Nigeria needs yet another app to bank the unbanked, one must ask: Are they solving a real gap or just adding to the clutter? The fintech ecosystem’s size has already attracted billions in funding. Five of Africa’s seven tech unicorns are Nigerian fintechs. Yet the marginal value of each new app is dropping. Many are near duplicates of existing platforms. The inclusion narrative becomes a convenient pitch deck slogan, masking the fact that most new entrants compete for the same urban base.

Offline Transactions: Financial Access Without the Internet Crucially, financial inclusion does not equal internet access. Millions transact using basic mobile phones via USSD codes. No smartphone needed. Every major bank and fintech offers USSD services, making them accessible to anyone with cellular reception. Banks like GTBank and FirstBank pioneered these services in Nigeria (CBN, 2020).

In addition, agent banking has expanded widely. By 2023, formal financial access had reached 64% of adults, up from 56% in 2020 (A2F, 2023). And 75% of people without bank accounts had still used a POS agent (Techpoint, 2023). In other words, even many “unbanked” Nigerians are already engaging with the financial system. The barrier isn’t lack of apps; it’s often lack of ID, mistrust, or irregular income.

The Hype Machine: Startups Selling “Inclusion” While Ignoring Reality Despite the evidence, startup founders and backers keep pushing the same line: Nigeria’s big problem is financial inclusion. But often, the goal is marketing. Consider the cautionary tale of Tingo. Its founder, Dozy Mmobuosi, dazzled investors with claims of 9 million users. The company even announced a $600 million merger and a Visa partnership. But in 2024, the U.S. SEC charged Tingo with fraud. Revenues and customer numbers were fabricated. Its Nigerian bank account held under $50 (SEC, 2024).

Tingo may be extreme, but exaggeration is common. Nigeria’s consumer protection agency recently cracked down on 47 loan apps for predatory practices (FCCPC, 2024). Many harassed users, charged exploitative rates, and evaded regulation. New apps kept reappearing via APK files. The problem isn’t a lack of fintech tools – it’s poor governance.

Founders love to tout user numbers and funding rounds, but impact rarely follows. Are users transacting more or just claiming referral bonuses? Often, fintechs gain quick adoption through incentives but fail to deliver value. True inclusion is hard; reaching Nigeria’s marginalized groups is costly and unglamorous.

Brick-and-Mortar Foundations: The Infrastructure Nigeria Lacks So what’s really keeping 36% of Nigerian adults unbanked? Basic infrastructure. Nigeria has the world’s highest number of people without electricity: over 86 million. In rural areas, less than one-third have power (GJIA, 2023). Even in cities, supply is unreliable. The national grid produces just 5.8 GW versus demand of 20 GW. 84% of urban households and 86% of firms rely on generators.

Roads are no better. The World Bank estimates 80% of Nigeria’s road network is in poor condition (World Bank, 2022). Poor transport raises costs and isolates communities. Internet access is similarly patchy. While penetration hit 55% in 2023, rural areas often have 2G or 3G coverage and suffer power cuts that knock out towers (Freedom House, 2023). Add macroeconomic instability to the mix. High inflation, currency volatility, and sudden policy shifts sap public trust. The 2023 naira redesign, meant to push digital payments, led to chaos. People couldn’t access cash, and fintech systems buckled under demand. Transfers failed. The lesson? Infrastructure must come first.

Lessons from Kenya and India: Tools vs. Foundations Kenya’s M-Pesa and India’s UPI succeeded not because of apps, but because of policy and infrastructure. M-Pesa works because Safaricom built trust and coverage. It now handles nearly 59% of Kenya’s GDP (Warwick Business School, 2023). India’s UPI handles 17 billion transactions monthly and accounts for 83% of digital payment volume. But it rests on years of groundwork: 540 million bank accounts, widespread Aadhaar ID, and public digital rails (McKinsey, 2023).

Nigeria has relied heavily on private startups, with little coordination or infrastructure investment. Without power, internet, trust, and basic services, fintech alone cannot deliver inclusion.

The Real Barriers: It’s Not That People Lack Apps or Accounts The truly unbanked often live far from towns, lack IDs, and operate in a cash-based subsistence economy. Giving them an app doesn’t fix that. Even agents struggle to serve remote areas due to liquidity and cost. And credit and insurance products don’t work well in stagnant economies. Without jobs or clinics, a loan or health app won’t help.

During the 2023 naira redesign crisis, Nigerians flocked to digital services. Mobile money transactions spiked to N2.5 trillion in one month. But so did failed transfers. Many went back to cash. The takeaway? People adopt digital tools when they work reliably. Until Nigeria fixes its infrastructure, fintech won’t consistently outperform cash.

Conclusion: Inclusion Requires Inclusion (of Reality) Nigeria’s fintech story is impressive, but misleading. The tools are largely there. The real need is not more apps, but more electricity, roads, education, and stable governance. Policymakers must prioritize basics: affordable power, reliable networks, and steady economic policy. Regulators should enforce standards and curb predatory actors. Only then will fintech deliver what it promises.

References:

• Afriwise (2023). Nigeria’s vibrant FinTech scene and how to avoid its regulatory pitfalls.
• Statista (2023). Number of fintech startups in Nigeria from 2017 to 2023.
• FIJ.ng (2023). Nigeria Has 17 Mobile Money Operators.
• Nairametrics (2023). Nigerian fintech Paga processes N14 trillion in 15 years.
• FRED (2022). Mobile Banking Agent Outlets in Nigeria.
• Techpoint Africa (2023). One PoS agent for every 80 Nigerians.
• A2F (2023). Formal financial inclusion in Nigeria soars to 64%.
• CBN (2020). Agency Banking Guidelines.
• SEC (2024). U.S. Securities and Exchange Commission charges Tingo.
• FCCPC (2024). Loan Apps Delisted Over Harassment and Fraud.
• GJIA (2023). Illuminating Nigeria: Grid and Off-Grid Electricity.
• World Bank (2022). Rural road infrastructure rehabilitation.
• Freedom House (2023). Nigeria: Freedom on the Net Report.
• McKinsey (2023). Driven by purpose: 15 years of M-Pesa.
• Warwick Business School (2023). How M-PESA cornered the market in Kenya.