Nigeria’s fintech investments drop 93% in Q1 2023

Fintech investments in Nigeria declined year-on-year by 93 per cent to $5 million in the first quarter of 2023 compared to Q1 2022, according to Fintech Global.

The global provider of financial technology information services also disclosed that Africa’s largest economy recorded a 59 per cent drop in fintech  deals, with only 14 deals recorded.

According to the report, marketplace lending was the most active fintech subsector in Nigeria during Q1 2023, with three deals, a 21 per cent share of total deals. Meanwhile, InsurTech, PayTech, PropTech and Blockchain & Crypto were the joint second most active sub sectors with two deals each.

 During the  reviewed period, Curacel, a digital insurance solutions provider, had the largest Nigerian FinTech deal in Q1 2023, raising $3 million in its latest seed round extension, led by Tencent.

The seed funding, the report noted, will be used to roll out new technology solutions designed to power the next generation of insurance experiences in Africa.

The report also showed that in April 2023, there were some regulatory changes in the consumer lending sub-sector of Nigeria aimed to address consumer complaints related to privacy rights violations and unlawful debt recovery procedures.

“These changes, along with the growing number of market entrants and licensing requirements, reflect the country’s commitment to improving business practices,” it said.

FinTech Global also noted that digital lending businesses in Nigeria must comply with a two-level licensing regime, obtaining licenses from local authorities and federal agencies.

“Regardless of the type of license, digital loan companies are also required to complete additional mandatory post-license registrations with various federal agencies,” it added.