A United Nations report put the figure of online sale transactions alone at $25.6 trillion globally, in 2018, up eight percent from 2017, even as stakeholders in Nigeria have called on the Federal Government to address challenges facing the penetration of financial technologies (fintech) in the country.
The experts were concerned about bottlenecks, especially connectivity, investment and regulations, saying they may create setbacks for Nigeria and other African countries.
United Nations Conference on Trade and Development (UNCTAD), in its report noted the growth in e-commerce and cross-border purchases, as more than 1.4 billion people shopped online in 2018.
While US, China and UK dominate the space, Group Chief Executive Officer of a Nigerian UK and US-based firm, Tingo International Holdings Inc., Dozy Mmobuosi, told The Guardian that although the Federal Government is taking steps in the right direction, there was a need to do more in expanding fintech.
Amid emerging solutions where smartphones and other technologies simplify banking, investing, borrowing services and cryptocurrency play a big role, the Government had earlier in the year restated commitment to a cashless economy with a roadmap.
The development would, however, require investing in infrastructure to ensure everyone has access to data to use digital solutions, Mmobuosi, whose organisation is currently addressing financial solutions through Tingo Pay, stated.
He also canvassed a forward thinking regulation that would allow incumbents and technology companies to obtain the licences and become regulated.
Mmobuosi said: “We have seen an enormous amount of capital flow into the Fintech sector across Europe and the US. We need to see a shift in attitudes in Nigeria, where companies allocate budget to developing digital solutions, and investors need to look seriously at Nigerian Fintech companies as investment opportunities.
“With that said, there is still an enormous opportunities for entrepreneurs to build solutions that can truly change the lives of millions of Nigerians.”
Mmobuosi noted that the transition from a cash based economy being planned by the Federal Government could be fast tracked with improved infrastructure to support.
To him, digital connectivity as well as reliability and reach are a major limiting factor.
“This will provide access to the digital ecosystem for a greater number of people. This will allow companies (incumbent banks, challengers and Fintech’s) to build products that are faster, more secure and cheaper across all industry verticals like financial services, insurance, healthcare, news/information etc.
“We then have a responsibility to educate large parts of the population to whom these new digital systems will seem alien – this will be vital for mass adoption,” Mmobuosi said.
He noted that a digital economy would bring about new ideas and opportunities that would totally transform the lives of millions of Nigerians and allow Nigerians to truly compete on the world stage.
While the country pushed to deepen financial technology, Nigerian-born tech expert, Temitope Ogunsemo, who heads Lagos-based, Krystal Digital, raised concerns about Nigeria’s inability to address identity issues.
Without necessary data that provides a national identity database, Ogunsemo noted that growth rate of fintech, which is interwoven with e-commerce, would remain poor.
To him, financial solutions remained the right way for emerging economies like Nigeria, stressing that economic growth would be hampered by the informal structure of commercial activities in the country.
“We have not crossed 10 per cent of the identity challenge. A lot of solutions that we should turn out are elusive because there is no data. If we can identify the over 200 million people we have in the country, we can build solutions that will bring everyone on board.
“We still have a lot of unbanked population. This is a major national and continental problem. We have made a little progress in the last decade but we can do way more than we are currently doing,” Ogunsemo stated.While stating that fintech remains the future of banking in Nigeria therefore there was a need to invest in the sector.
To him, if the government approves financial technology institutions to give loans, there would be less attention on the stringent conditions from the commercial banks.