Nigeria Banks on Fintech

The Country is Gearing up for a Financial Tech Explosion



The country best suited for a digital money revolution is … Nigeria? Africa's largest economy averaged US$142.8 million in monthly mobile money transactions in 2016, up from US$5 million in 2011, according to KPMG. Increased adoption is forthcoming, too: More than 90 percent of respondents to a 2017 PwC survey said they expect fintech to disrupt Nigeria's retail banking sector in the next five years.

And for good reason: Of the country's 186 million citizens, 144 million are under 35. Forty percent of the population was without a bank account in 2016, according to the Central Bank of Nigeria. What roughly 100 million Nigerians do have, however, is a mobile phone. That creates a huge opportunity for a fintech surge, says Boye Ademola, partner and head of financial services technology, KPMG, Lagos, Nigeria. Because Nigeria isn't constrained by the legacy systems of the traditional banking industry, the country is uniquely positioned to support widespread fintech innovation and adoption.

Money is already pouring into the country's fintech firms. Investment in new fintech organizations could reach US$300 million this year, according to Mr. Ademola. For their part, startups are launching projects to provide consumers with innovative, easy-to-access banking and financial options. For example, Casava aims to offer easy mobile payments for its insurance policies and be the first African company to offer consumers peer-to-peer insurance (essentially a group that pools its premiums together to minimize costs). Lidya is using its US$1.3 million in seed capital to accelerate product development and help develop its team. The fintech startup currently delivers credit algorithms that make it easier for small businesses to build credit and access loans.


“Friction is inherently high in fintech due to increasing regulation and the psychology of money.”

—Ido Ginzburg, Irrational Innovations, Tel Aviv, Israel

But a great project idea isn't the same as proof that a product can succeed at scale—which startup investors look for after an initial round of funding. “We need to see a business case with a plan for fast growth and a solution that can move into other markets,” says Ido Ginzburg, CIO at Irrational Innovations, a venture capital firm in Tel Aviv, Israel that's focused on African fintech. “If you can capture a significant market share in a city like Lagos, you can expand to other locations.”

Most of Nigeria's fintech organizations are small and emerging, and their project goal is simple, Mr. Ademola says: “Get a product to market so that it generates revenue and ultimately will attract capital.”

But too often these startups don't have the project management expertise to identify risks or create a project plan with defined business goals and key stakeholders that will take them beyond the initial pilot, he says. “They need to be clear in their project plan about who their target customer is, the problem they intend to solve, the scope of the project, deadlines, resource plan, benefits realization, change management and how they will meet those goals,” Mr. Ademola says. Otherwise, even the best idea will neither generate revenue nor attract capital.

Part of the planning process also includes figuring out what must be done in-house and what can be outsourced. That's a necessary step given the country's talent constraints and skills gaps, Mr. Ginzburg says. “There aren't enough high-level developers—especially ones willing to take the entrepreneurial route—to support the growth of the fintech sector in Africa.”

Mobile Money

Fintech projects could bring millions of bankless Nigerians directly into the mobile and digital world.


Percentage of Nigerians without a bank account in 2016


Percentage of Nigerians without a bank account by 2020

US$200 million

Fintech funding in Nigeria from 2015-2016

US$3 billion

Fintech funding in Africa by 2020, with Nigeria and South Africa receiving a significant portion of the investments

Sources: Central Bank of Nigeria; FinTech in Nigeria, KPMG, 2016; PwC

Outsourcing can help by allowing fintech organizations to overcome talent shortages by tapping into larger, more agile development teams with experience managing these types of projects, he says. However, when doing so, the core team must be able to effectively collaborate with far-flung project teams, craft detailed project requirements and establish penalties and benefits that ensure milestones are met. “It adds another level of managerial complexity, as it requires managing teams in different geographies, as well as integrating their work,” he says. “Many companies avoid outsourcing due to the lack of appropriate project management skills.”

Contingent on a Plan

Teams must also contend with regulatory, infrastructure and cybersecurity issues. For instance, while the Nigerian government has been encouraging development of the fintech industry as an economic growth strategy, regulations are still evolving. That leaves companies to make their best guesses about how to achieve compliance. The growing sophistication of cybersecurity threats presents yet another challenge.

However, many fintech startups are so focused on rapidly getting a product to market that their teams aren't mitigating these risks through careful planning or the incorporation of tools like block-chain to create a more secure financial transaction environment, Mr. Ginzburg says. “Companies should rely on best practices and comply with international standards—friction is inherently high in fintech due to increasing regulation and the psychology of money,” he says. “Companies must overcome this challenge in order to scale.” —Sarah Fister Gale



Related Content

  • Project Management Journal

    Investigating the Dynamics of Engineering Design Rework for a Complex Aircraft Development Project member content locked

    By Souza de Melo, Érika | Vieira, Darli | Bredillet, Christophe The purpose of this research is to evaluate the dynamics of EDR that negatively impacts the performance of complex PDPs and to suggest actions to overcome those problems.

  • Academic Research

    Maximizing Organizational Resilience under Institutional Complexity in Interorganizational Projects member content open

    By Wang, Linzhuo | Zhu, Fangwei | Müller, Ralf This empirical study uses mix-methods research to uncover how to improve organizational resilience by arguing for the design of governance systems of collaborative relationships.

  • Project Management Journal

    Explorative Learning in Infrastructure Development Megaprojects member content locked

    By Liu, Yan | Hertogh, Marcel | Yuan, Ziwei | Liu, Huimin This research draws upon the case study of the Hong Kong-Zhuhai-Macao Bridge (HZMB)--a cross-sea link construction project--to study how explorative learning was achieved and sustained.

  • Thought Leadership Series

    Medir lo importante member content open

    Este segundo de una serie de informes con PwC examina cómo el 10 por ciento superior ha aumentado el número y la variedad de métricas, más allá de los parámetros tradicionales de alcance, cronograma…

  • Thought Leadership Series

    Mesurer ce qui compte member content open

    Ce deuxième d'une série de rapports avec PwC examine comment les 10 % les plus performants ont augmenté le nombre et la variété de mesures, au-delà des paramètres traditionnels de portée, de…