The number of fintechs in Nigeria, MTN Nigeria’s PSB licence

July 2, 2022

My tweet earlier in the month about Nigeria having over 250 active fintech startups generated many reactions. Some people believe my number is too low, while others say it's too high. Another group questions the accuracy of my figure.

The number of players in the fintech industry is not enough considering the ratio of fintech to the population in countries like the United States of America, India, and Brazil, among others.

Intelligence is currently working on a research report about the Nigerian Financial Services, commissioned by TeamApt. The data we have gathered so far formed the basis of the figure quoted in my tweet.

As a subscriber, you will typically get early access to the report when it drops. You can share this newsletter with your friends and colleagues so that they can also get early access to research reports and a monthly update on the African technology space.

For this edition, we will be looking at: 

  • The $236.24 million for African startups in May
  • Will MTN Nigeria change the mobile money game
  • Insights from social media poll
  • Intelligence project updates
$236.24 million for African startups in May

Twenty-five African startups raised a total of $236.24 million in May 2022, 220% of April 2022's figures, but not close to any of the months in Q1. 

Egypt was responsible for three of the seven African startups that raised 8-digits in the month, with two of them above $40 million each. The other countries with startups in the 8-digit range are the Democratic Republic of Congo, Kenya, Namibia, and Ghana. Like April 2022, Egypt also had the largest share of the amount raised.

Like the past months, startups in the financial sector still got the larger share of the funds, with 32.4%.

  • Total announced deals for the quarter – $236.24 million
    • Financial Services received $76.64 million
    • Egyptian startups had the largest share with $121.4 million, followed by the Democratic Republic of Congo with $30 million
  • 25 funding deals
    • 16 seed rounds
    •  2 pre-seed rounds
  • Top deals of the month
    • Paymob’s $50 million Series B
    • Instabug’s $46 million Series B
    • Jambo’s $30 million Series A
    • MARA’s $23 million Seed
Other African updates



Will MTN Nigeria change the mobile money game

In May, MTN Nigeria announced the launch of MoMo, its mobile money service, which will use the Payment Service Bank (PSB) licence. People believe that MTN Nigeria will change the mobile money game with this move. Will that really happen? Let’s explore it a little.

MTN Nigeria has the highest number of GSM subscribers in the country, at 37.89%, with no other operator having up to one-third of the telecom subscribers.

All four telecom operators have gotten the PSB licence, with Airtel and MTN Nigeria being the last to join the PSB bandwagon. Considering 9mobile has been using its PSB licence since late 2020, one wonders if MTN is really poised to change the game as many people have touted them to do. Understandably, 9mobile only had 12.84 million subscribers as of March 2022, compared to 74.93 million for MTN Nigeria.

There’s also the theory that MTN would replicate its MoMo Guana success in Nigeria.

Many Nigerians have to use the service for their day-to-day transactions before one can factually say that it has achieved some level of success. One other way, however, would be to base our judgment on the number of accounts, irrespective of their status: active or inactive.

By sending an SMS to subscribers with the appropriate instruction for its USSD channel, MTN Nigeria or 9mobile can easily sign up millions of subscribers on their mobile money platform. But sign-ups aside, it's usage that matters. 

If I can pay the woman that sells akara on my street with mobile money, she has to be able to pay for everything she needs with the money in her digital wallet. It all becomes rather pointless if she has to go to the nearest POS agent to get cash before buying what she needs. Just like what I explored with Gona in the case of paying at a fuel station after a public bus driver has gotten all proceeds through a mobile payment system.

I’d definitely love to make payment without answering the "savings or current?" question. It'd also be great to avoid exchanges about which bank the merchant is using and fighting on a public bus because of my balance. Interestingly, Gona explored cashless payment in public transport on limited routes in Lagos State before it packed up shop. 

In the end, it’s all about wide acceptance. I wrote about how the transport industry can drive the Central Bank of Nigeria’s cashless initiative in 2019.

Moving on, PSBs are expected to have at least 25% of Financial Service touchpoints in rural areas. The report Intelligence is working on will answer the question of whether people in rural communities are less likely to own accounts with a commercial bank or mobile money operator. A trend in the last couple of years is the neobanks and other fintechs pushing the “banking the unbanked” narrative. However, you mostly come across their billboard ads in the cities and not the rural communities without physical branches of commercial banks.

There were 54.7 million Bank Verification Numbers (BVNs) as of May 29, 2022, while the total number of individual accounts as of December 2021 stood at 179.2 million, according to the Nigeria Inter-Bank Settlement System (NIBSS).

With new players entering the Nigerian financial services space monthly, I’m excited about what the future holds for the market and look forward to when I can be out for a whole day, spend money without touching cash, a debit card, or doing a bank transfer.

From our social media polls
  • Do you read websites’ or apps’ Privacy Policies or Terms of Services? I don’t read them, and neither do 77.5% of respondents in one of our polls.
  • About the longest that people have ever worked in a company, only 44 of the 279 Tweeps that voted in our poll have been in a company for over five years.
  • It’s good to know that only 50% of respondents in another poll claimed that they always vote honestly in social media polls.
Intelligence updates
  • Intelligence also launched its blog with a post breaking down African Startup Funding in Q1 2022; here’s the link if you missed it.
  • We plan to revamp the Intelligence by Techpoint website. You can reply to this post or send us a mail with a feature you would like us to include.
  • ICYMI: Y Combinator in Africa
  • The State of Insurance in Nigeria: The third and final data gathering process — which is the hardest part —  is ongoing.
  • We are working on making this newsletter better. Please share your thoughts by filling out this short four-question survey.
  • We have revisited our mini-report about the blockchain space in Africa, which we suspended, and plan to release it as we approach July 2022. 

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Do have a nice day.


Yinka Awosanya
Mobile & African Tech Enthusiast │ Data │ Music
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