The Central Bank of Nigeria (CBN) said the concentration of fintech companies in Lagos state is holding back fintech development across the country, especially in the hinterland.

The main bank identified this as a major challenge for financial inclusion in the country and does not align with the National Fintech Strategy drafted by the National Steering Committee for Financial Inclusion.

Note that the strategy, among other things, was designed to drive further fintech diffusion across the country, helping to achieve the financial inclusion goal of 95% by 2024.

Why Lagos is attractive: Explaining why fintechs are concentrated in Lagos, CBN noted that in addition to the large size of the market, the state also has a higher GDP per capita than Nigeria. While the country’s GDP per capita stands at USD 2,229.9 (as of 2019), Lagos’s stands at USD 6,238.

  • “Many Fintech businesses are focused on Lagos due to the size of the market; Lagos is the commercial capital of Nigeria with more than 20 million inhabitants and a highest GDP per capita of USD 6238. However, this has slowed down the development of Fintech in the interior.the CBN said.

Need for fintech strategy: In his foreword to the strategy paper, CBN Governor Godwin Emefiele, who is also chair of the National Financial Inclusion Steering Committee, said the committee believes that fintech has the potential to facilitate inclusive growth in the Nigerian economy. He said:

  • “In light of this, national financial inclusion stakeholders developed a strategy to harness fintech for inclusive growth and development, while enabling the Nigerian fintech ecosystem for global competitiveness. The strategy seeks to achieve these objectives through the implementation of some key initiatives to catalyze the Fintech ecosystem. It highlights the supply and demand side imperatives to leverage and retain the talent pool in the FinTech space and the integration of FinTech into the Financial Services sector.
  • “In addition, the document seeks to address the issues that have militated against the growth of fintechs in Nigeria and will serve as a collaborative tool to maximize the benefit of FinTechs while mitigating risk.”

According to the CBN Governor, the National Fintech Strategy is an important component of the Payment Systems Vision 2025 (PSV2025). He added that the strategy would enable the achievement of the goals of the Nigerian Startup Bill, 2022, particularly in the Financial Services sector.