Access and convenience are the two most important drivers of fintech adoption in Nigeria, a report by McKinsey & Company, the business advisory and consulting firm has stated.
There is also a growing trust in fintech because of the participation of mobile network operators, the growth of agent networks, transparency in pricing, customer education, and ease of money withdrawal. According to the research conducted by the firm, 54 per cent of respondents noted that they have increased their use of fintech over the past six months and 57 percent of fintech users pointed to the fact that they use fintech because it offers them access and convenience.
Corroborating this claim, Elvis Ebikefe an avid user of fintech told Business A.M. “I use fintech because it gives me convenience and the freedom to carry out different types of transactions on one platform.”
McKinsey notes that the success of fintech operators like Opay, Quickteller and the likes are pointers to the fact that access and convenience is the major reason why Nigerians are adopting fintech. Another trend worthy of mention is that referrals are playing a key role in the adoption of fintech, especially for women.
As Mckinsey states, “Our research indicates that 55 per cent of customers first heard about a fintech product through a friend—and that number rises for women. For example, in Lagos, 65 per cent of women heard about fintech through a friend.” Moreso, Lagos is the city with the highest adoption of fintech in Nigeria with middle-class and affluent people being the biggest demography of people to adopt fintech.
The McKinsey report also stated that Lagos is the biggest city in terms of fintech adoption because it is the city with the highest population of educated individuals with access to a reliable digital infrastructure as well as a strong economic power. The research, however, notes that fintech is growing rapidly in other parts of the south as well with savings products driving the adoption in that part of the country. It also notes that the USSD technology and agents network are driving the adoption of fintech.
Additionally, the northern part of Nigeria is the most undeveloped in terms of fintech adoption, but McKinsey notes that with the presence of Opay as well as the growth of agents networks, that might change soon.