Nigeria is an ideal place to create solutions to our many global problems. It has a youthful population of more than 200 million, which is why the industry is thriving. Nigeria produces a large number of graduates every year at all levels. Many of our youthful population can now be engaged in various types of digital activities, whether it be web design or receiving deeper skills such as coding or training in cybersecurity.

Nigeria has the baseline capacity and capabilities to lead and collaborate across the continent in the fintech space. Already Nigerian firms and banks are stepping out of Nigeria into Africa and bringing best practices. Nigerians want to build an Africa that is inclusive and drives growth so that the continent can be a global player.

Our work consists of three main segments. The first is connecting stakeholders and encouraging collaboration to scale endeavors. The second is accelerating and building capacity across all stakeholders, which includes not just fintechs but regulators, operators and even students interested in tech leadership. The last is advocacy where we work with regulators to ensure policies and frameworks that support innovation and creativity.

We set up what we call the Nigerian Reguvators Forum, which is formed by putting the words regulators and innovators together. These stakeholders come together on a quarterly basis to highlight and find solutions to pertinent industry questions. Participants include the Central Bank of Nigeria, the Securities and Exchange Commission, telecoms, all regulators and the community. The World Bank sent representatives to see how we run the Nigerian Reguvators Forum because it is the first of its kind in Africa. It has been critical in helping advance fintech-related policies in Nigeria.

EY conducted a study for us in 2021 that pinpointed a number of challenges we face. One is a lack of skills and talent. There remains a lot of talent exploitation from Nigeria and Africa into Europe and the Americas. For companies to find and retain talent is extremely difficult. We are developing at a phenomenal rate but lack of skills and funding at pre-stage levels is a big challenge. Additionally, there is frustration surrounding licensing. Innovators are always ahead of regulators.

However, Nigeria’s Securities and Exchange Commission has shown significant leadership in driving fintech regulation within the country. In 2018, the commission made a widely available report on how fintechs and the industry can drive capital market transformation. There have also been many improvements at the Central Bank of Nigeria, which built a sandbox for fintechs and implemented the first digital currency in Africa. There are several regulations that have come out to facilitate the development of the sector such as guidelines for licensing and regulation of payment services in Nigeria. While regulators are not completely lagging, they are certainly playing catch up. Regulators must enter the fintech ecosystem to understand how it works and then provide policies. In terms of multilateral development institutions, everyone is aware of our potential. However, to reach it involves not just solving problems but also digitalization, innovation and job creation.

Credit is a way to grow the economy and standard of living by those who meet certain criteria. The rationale is simple. People want to improve their standard of living and the ability to achieve it is often credit. Millennials and Gen Z are not risk averse; they are ready to take advantage of any opportunities with the hope their income stream increases over time.

The market for buy-now-pay-later platforms is growing in Nigeria. One market study showed that this segment would grow on an annual basis of 60% and reach around half a billion dollars by 2023. It is a very exciting environment and statistics are compelling. Router conversion rates with a buy-now-pay-later facility go up from 20% to 30%. There is also a lift in the average ticket size when you offer these types of credits from about 30% to 50%. It is a win-win equation for both merchants and consumers. We expect to see more companies emerging in this space, including both banks and fintechs. Already companies like Carbon Bank are doing this and traditional banks are collaborating with online retailers to offer this service at their point of sale.

From an industry perspective, there's no better time to be an innovator or startup in Africa. The fourth industrial revolution was the first to solve Africa's largest problems by leveraging global technologies and partnerships. Now, we are moving beyond the fourth into the fifth. In previous industrial revolutions someone invented something, perfected it, ran it and pushed it around the world. These were usually 30- and 50-year cycles, but they are now getting much shorter. The pandemic has also accelerated things.

There is no turning back the digitization of money and business. This is viewed best when looking at the penetration of mobile phones and social media. For example, microbusinesses are now selling agricultural products on social media platforms in Africa. They have digitized their point of sale and collect money in a digital manner. We are just at the starting point. Digitization is bringing about high levels of financial inclusion, with a large population still to be brought on board. These new payments will drive the population to get basic virtual wallets for insurance and banking products and from those wallets they will pay their bills. While around 80% of transactions are still being done by cash, there is a lot of potential to grow. We are now able to take on biometric data and provide more secure payment forms through point-of-sale devices and agent networks.