“Despite the fact that Nigeria is still largely a ‘cash first’ nation, a number of fintech startups are working to lower entry hurdles for both consumers and businesses as internet penetration rises.” -Olufemi Balogun, CEO of PayVantage Limited.
Olufemi Balogun, a software engineer and the founder/CEO of PayVantage Limited, a software payment solution for small enterprises, discussed his fintech payment platform and how Nigerian youths might benefit from the current digital wave.
Amidst increasing poverty and vulnerabilities among Nigerians, financial inclusion is believed to be a viable instrument for empowerment and financial independence.
According to EFInA, evidence worldwide has demonstrated that access to financial services contributes both to economic growth and wealth creation and is, therefore, the key to tackling the poverty trap in Nigeria.
One major objective of Nigeria’s fintech ecosystem is to bring hundreds of thousands of small-scale entrepreneurs in the large informal sector online. However, since the ecosystems do not exist in a vacuum, real-world challenges like difficulty getting a business license, difficulty getting credit, having to pay multiple taxes, and having to maintain pricey corporate accounts are frequently faced by small businesses, particularly those looking to enter the formal economy.
It is well-known how challenging it is to transfer and receive money in Africa before now. Many digital startups have focused on making it possible for small companies to accept online payments. The two largest e-commerce companies in Nigeria, Konga and Jumia, have significantly supported the expansion of unregistered businesses’ ability to accept payments online by utilizing their own payment infrastructure and marketplace concepts. Merchants must have corporate accounts or certificates of incorporation in order to use the platforms of either company.
Paystack is now assisting SMEs in streamlining the process for unregistered enterprises to participate in the digital economy as a fintech startup tackling the issue. A corporate bank account or an incorporation certificate for businesses is no longer required. Making it simple for small and medium-sized businesses (SMEs) to integrate a digital payment system to accept safe payments from numerous local and international payment channels, and then providing resources to aid in generating revenue.
Despite the fact that Nigeria is still largely a “cash first” nation, a number of fintech startups are working to lower entry hurdles for both consumers and businesses as internet penetration rises. According to the IMF, the informal sector may account for up to 65% of the Nigerian economy. Because there aren’t enough chances in the formal sector, many people who would otherwise be jobless receive money and work in the informal sector.
The problems faced by both merchants and end users have been taken on by one startup. Payadvantage Limited is a fintech payment processor that is solely responsible for revolutionizing the payments industry. The startup, which was founded in 2021, has kept adding thousands of customers thanks to its simple and efficient platform. SMEs are taking advantage of this chance to facilitate international trade and generate revenue.
Fintech technologies are developing quickly. On the continent, new technologies are being created and put into use, and they could provide Africa with considerable advantages. Foreign investors have increased their support for African fintech companies as such companies develop solutions tailored to the region, for example, to account for the region’s considerably slower internet connection in some locations, in recognition of this. The region will benefit from internet-based solutions thanks to the declining cost of cell phones.
The final point is that for Africa, where the majority of nations are still unduly dependent on a few dominant sectors, fintech has shown to be a crucial first step towards a digital economy. Fintech may yet play a crucial role in this structural change if properly utilized.
