The Gap

Fintech in Nigeria: History, challenges, impact, top companies

Fintech in Nigeria: History, challenges, impact, top companies

Financial Technology (fintech) is a digital platform that makes online payments and other transactions easier and better. Fintech is an integral part of the financial sector in Nigeria. Fintech in Nigeria is gradually taking over the traditional financial institution after consumers’ bad experiences with banks. Lack of customer support, outrageous charges, and lack of access to services, especially in rural areas, have contributed to why Nigerians prefer fintech services.

Simply put, fintech companies fill the void created by traditional banks. This article highlights the following:

  • History of fintech in Nigeria
  • Challenges of fintech in Nigeria
  • Impact of fintech in Nigeria
  • Top fintech companies in Nigeria

History of Fintech in Nigeria

Fintech in Nigeria started when banks began to incorporate technology into their systems to promote smooth operations. The Structural Adjustment Programmes (SAP), which was introduced in the 1980s, led to increased competition in the banking sector. However, SAP ended in 2007 when the Central Bank of Nigeria (CBN) started the Payment Systems Vision 2020. It was the first time the CBN put forward a clear policy for a future cashless society which was eventually launched in 2012.

The first Fintech company, SystemSpecs, was founded in 1991 by John Obaro. Mitchell Elegbe founded Interswitch in 2002, while Valentine Obi established E-transact in September 2003. Note that these were not the only fintech companies in Nigeria at the time, but they were the most prominent.

These early fintech companies paved the way for startups to rise. Now we have Flutterwave, Paystack, Paga, Remita, Piggyvest etc. In addition, the emergence of cryptocurrencies and blockchains in Nigeria also contributed to the rise of Nigerian fintech companies.

Thanks to digital technology, fintech is growing bigger and better in Nigeria. Saving, paying and accessing funds are easier than before.

ALSO READ: Ways to make money online in Nigeria

Challenges of Fintech in Nigeria

Although the emergence of fintech in Nigeria is a welcome development, it doesn’t come without some challenges. These challenges are :

Unclear regulation

The CBN guideline for fintech companies stipulates that mobile money services can be Bank-led or Non-Bank led. The bank-led model allows banks to initiate services, while the non-Bank led model refers to a CBN licensed company acting as an initiator of transactions. However, fintech companies often confuse the two. It is common for licensed mobile money operators to integrate with other financial solutions providers, which the CBN allows. However, some of these licensed operators integrate with platforms that the CBN has not granted any license. As a result, fintech companies incur heavy fines from the CBN for violating their rule.


Fraud is a major challenge for fintech companies in Nigeria. Fintech companies are prone to cyber fraud, and their systems are constantly under attack. According to TNP, an estimated 159 billion naira was lost to cyber fraud between 2000 and 2013. Nigeria also ranks third in global cybercrimes.


Chargeback refers to a payment that has been refunded after a failed transaction. It can be a case of network problems or unauthorized use of credit/debit cards to access information. However, there are instances where a customer purchases a product and claims to have returned it without a refund. This is called friendly fraud. According to CBN rules, the seller must refund the customer even though it may be a case of friendly fraud. No regulation protects eCommerce entrepreneurs and fintech companies from such a scenario.

Heavy restrictions to obtain operating license

According to CBN guidelines for fintech, any company applying for a mobile money license must provide evidence of having a minimum of N2 billion as its shareholders’ funds. This is a massive drawback for startups, as many cannot afford it. As a result, they cannot legally operate in Nigeria without a license from CBN.

Ignorance of law enforcement agencies on fintech

In Nigeria, law enforcement agencies have little or no knowledge about how a fintech company operates. As a result, there are often clashes between the two sectors. There are cases of the Nigerian police arresting individuals operating a fintech platform and charging them for cyber fraud.

Lack of trust

Despite the positive contributions of fintech companies, many Nigerians still do not trust them. A lot prefer dealing with traditional banks, trusting them to protect their finances.

ALSO READ: Top banks in Nigeria

Impact of Fintech in Nigeria

  •  Fintech companies have disrupted traditional banking services in Nigeria. You can make your financial transactions without stepping out of your house, thanks to fintech. This has forced banks to adopt new systems to step up their services.
  • Fintech companies have made payments very easy. Flutterwave and Paystack are the leading platforms that make businesses and individuals accept online payments by just clicking a button.
  • Fintech provides better loan alternatives. Gone are the days when you fill plenty of paper works and wait for days, weeks and even months to get a loan from the bank. Fintech companies have eliminated all those hurdles. Private lenders like Carbon, Quickcheck and Lydia now make it easy for anyone to access quick loans.
  • Fintech provides better financial management. These are simple ways to save money and track your transactions. Piggyvest is the leading startup platform for saving.
  • Trading in cryptocurrency is easier in fintech.

Top Fintech companies in Nigeria

Here is our top 10 list of fintech companies in Nigeria.


Flutterwave is number one on our list because virtually everyone who knows about fintech in Nigeria has heard about it. Founded in 2006 by Olugbenga Agboola and Iyinoluwa Abogeji, this startup company helps users send, receive money and pay bills. In 2019, Flutterwave entered a partnership with VISA to launch a consumer payment product called Alipay and GetBarter. The fintech company also collaborated with Binance for Nigerians to buy bitcoins with naira.

Flutterwave is valued at $1 billion as of 2022. The company announced a collaboration with PayPal to enable businesses in Nigeria and other African countries to receive payments. Flutterwave has offices in Lagos, San Francisco (United States) and across 20 African countries. Over 280,000 businesses carry out transactions on this platform.


Founded in 2015 by Shola Akinlade and Ezra Olubi, Paystack has made online payments easier and more consistent for businesses and consumers. The Nigerian fintech company has over 17000 popular clients such as Betway, MTN, IrokoTv, Taxify, Domino etc. Paystack was listed in the top 250 fintech companies in the world.

ALSO READ: Natural resources in Nigeria and where to find them


Founded by Tayo Oviosu in 2009, Paga featured alongside Paystack in the top 250 fintech companies in the world. Initially, Paga enabled users to make transfers without charges. The company evolved into making bank deposits, bill payments, and more with time. By just dialling *242# on the platform, you can make payments without an internet connection. Paga has also partnered with VISA.


Piggyvest is the leading fintech startup for savings in Nigeria. You can save money with interests higher than the traditional bank offers. Piggyvest offers different saving plans such as PiggyBank, Safelock, Flex Dollar etc.


Interswitch is one of the oldest fintech companies in Nigeria. The platform offers online payment services, point-of-sale terminals, Verve and its ATM card. Interswitch also owns Retail pay, verve debit card, Smartgov and many Automated Teller Machines (ATM) across Nigeria.


Like Interswitch, E-transact is one of the oldest fintech companies in Nigeria. The platform processes payment requests from different channels like ATM, POS, Web etc. It also supports networks like VISA, AMEX and Mastercard.


Originally known as Pay later, Carbon is a popular Nigerian loan app. Carbon is owned by One Finance Limited and started operations in 2016. The app gives Nigerians loans without the hurdles associated with traditional banks. It is quick, easy to use, efficient and safe. You can even access loans without collateral or a guarantor.


Developed by SystemSpecs, Remita helps organizations like schools, government agencies, NGOs, SMEs, and others make and receive money electronically. Remita also serves as the Federal Government Treasury Single Account (TSA) platform. It is used by over 500 microfinance banks and processes over $30 billion worth of transactions every year.


Kuda’s best feature is eliminating charges from traditional banks. The fintech company enables users to open accounts within minutes. Kuda also offers customized Mastercard ATM cards without transfer fees or ATM maintenance fees. Deposits are free as well.


Launched in 2016, Lidya helps outstanding entrepreneurs access finances and constructs a credit store through its loan apps. Lidya uses about 100 data points to evaluate businesses, manufacture credit scores for exceptional entrepreneurs and dispense loans within 24 hours.


Fintech companies in Nigeria are very relevant in today’s world of digital technology. Traditional banks might feel threatened by the rapid growth of fintech in Nigeria. But collaboration, not competition, is the only way to advance the interests of both unique financial sectors.

ALSO READ: Capital Market: All you need to know

Previous ArticleNext Article
Nonye is a Thespian, screenwriter, creative writer and an unapologetic lover of books, great movies and sports. She has over 10 years experience in content writing on entertainment, movies, sports and lifestyle. Nonye is currently a content writer at Blackdot Media and founder of
Send this to a friend