A guest contribution by CrossFund, a funding platform that helps investors from all over the world to invest in early-stage tech startups from emerging markets.
This year, 42 million Nigerians were estimated to be living in areas without access to basic banking services. Yet, at the same time, Nigeria’s fintech and neobanking sectors are outperforming those of every other African nation. Connecting these two facts in a few snapshots helps to understand how reform has come together with private-sector ambition to close this gap in the most populous nation in Africa.
In 2011, Nigeria’s leaders put out an ambitious document, the National Financial Inclusion Strategy, which declared an aim of bringing 80% of Nigerians into the financial fold by 2020. While valiant effort was made in some areas, the figure was still only around 64% by that year. A number of factors hamper the efforts of the public and private sectors to shift the goalposts: an economic downturn, worsening security in some parts of the country (especially the north), low literacy rate, and legacy mistrust of banks and anyone providing financial services all add to the list of obstacles.
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