Nigeria shall not live by Fintech alone
The excitement and buzz surrounding “Fintech” as a niche is well-founded, but we also need to take a step back and see the possibilities in other industries. We have disrupted the fintech industry; now the next step is to enter and fill the shortcomings of already existing conventional banks. Government hurdles, inflation, and politics are becoming determining factors in every other industry, not just app development. What we must now do is develop a value chain for fintech as a business specialization. We have other economic segments, such as big data and edtech, that do not directly depend on physical infrastructure, which gets me back to the problem: we cannot code or design our way out of the country’s problems.
The major goal of a business is to provide viable solutions while earning money; unfortunately, many innovators design MVPs without taking into account infrastructural inefficiencies that are completely outside their control.
We have a unicorn to kick off in the fintech space, but we need to go outward, discover other niches that aren’t saturated, and create value for them. The fact is that I don’t need seven apps merely to pay for bread and beans on a food commerce platform.
A vast majority of current fintech platforms are either half-baked or producing more difficulties than they can address; signing up for most of them is almost impossible. Obtaining an OTP from some of these sites is an impossible endeavor.
We need to generate value not just for fintech as a specialty but also for other niches. I’m not suggesting we go about establishing AI-enabled agritech firms; that’s not value, but helping farmers handle storage, yield, and advanced mechanized farming problems.
The majority of Nigeria’s agri-tech enterprises are either e-commerce platforms that connect farm goods with consumers or fintech services that help farmers access money for supplies or company development. They account for 65.2% of Nigerian agri-tech firms, with AI/IoT, farm management, and supply chain management coming in third and fourth, respectively. No, we have not met the demands of the locals. What about a farm-based startup? You can manage a silo as a service to assist farmers with advance storage. This will ensure that seasonal agricultural products are not in short supply.
With 13 enterprises involved, marketing technology accounts for 2.7% of Nigeria’s total. Eleven (84.6%) are from Lagos, with two from Abuja and two from Kaduna. Almost half of these firms (six) were formed in 2014. Three comparable companies started in 2020 and 2021, indicating an increase in activity. ThankUCash (56), Termii (31) and Dochase (14) are the three largest startups, each employing 149 people.Only one has a female co-founder (7.7%), while four (30.8%) have been accelerated or incubated. Attention is required for technology-driven marketing, in which traffic and conversions are watched, recorded, and filtered.
Prop-tech is another undiscovered sector that is relevant given the difficulties of renting or purchasing in Nigeria. This magazine monitors 1.5 percent of the sector’s active startups. Prop-tech is less focused on Lagos than other businesses; however, five (71%) of the listed firms are from the city. Abuja and Ibadan make an appearance. Three of the seven companies were founded in 2017, and none in 2019. Seven firms have created 154 positions, an average of 22. Three (42.9%) have gone through acceleration or incubation, with one (14.3%) having a female co-founder. This is another goldmine, but there is no true value chain for this industry, and the few companies involved are just scratching the surface. In our part of the world, we still haven’t gotten mortgages right. Housing is a need that requires a good value chain. It’s a long game, but if everyone plays well, everyone wins.
Finally, people in the venture community who are influencers or whisperers should broaden their portfolios by looking at other industries and regions that want acceptable solutions and are business-ready. These industries do not need complex software or the completion of vanity metrics, we need viable businesses solving actual problems.
Facts and numbers gotten from Disrupt Africa’s Startup Ecosystem 2022 report.
Writer’s Personal Comment: Stop chasing the unbanked! They don’t want to bank, the fintech space is overly regulated already, check another sector! As for those developing fintech just to get funded, una well done! The lord is your muscle.
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