FinTech Attracts Over $600m Investment In 6yrs – NDIC

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Digital financial services enabled by Financial Technology (FinTech) has attracted over $600 million investment into Nigeria between 2014 and 2019.

 

The Managing Director and Chief Executive Officer of the Nigeria Deposit Insurance Corporation (NDIC), Alhaji. Umaru Ibrahim, Monday disclosed during a workshop for Business Editors and Finance Correspondents Association of Nigeria (FICAN) in Lagos.

 

The workshop has as theme, “COVID-19 and FinTech Disruption: Opportunities and challenges for banking system and deposit insurance.”

 

The NDIC boss stated that Nigeria is currently home to over 200 FinTech companies.

 

He explained that the companies in 2019 attracted $122m of the $491.6m raised by African FinTech startups.

 

Kenya, however, attracted $149m investments in 2019.

 

Ibrahim said, “Nigeria is now home to over 200 FinTech and there are a number of FinTech solutions offered by banks and mobile networks operators as part of their product portfolio.

 

“Between 2014 and 2019, Nigeria’s bustling FinTech scene attracted more than $600m in funding; attracting 25 percent, that is, $122m of the $491.6m raised by African FinTech startups in 2019 alone. We are only second to Kenya which attracted $149m.”

 

He noted that the emergence of digital financial services enabled by Fintech has enhanced efficiency in the financial sector but has also posed new challenges to financial regulators and consumers.

 

This, he added, became more apparent during the pandemic when the lockdown protocols hindered physical access to financial services, encouraging more Nigerians to rely on digital financial services.

 

“Inevitably, the media was also adversely impacted by the pandemic. Our attempts to tackle the erosion of public confidence due to the prevalence of fake news, particularly via social media, became a matter of serious concern.

 

“As disruptive as the COVID-19 has been to other sectors of the country, I would like to humbly state that the NDIC was not caught napping. Based on its robust and proactive Enterprise Risk Management strategy, the Corporation immediately swung into action by activating its Crisis Management Action Plan to prevent any negative impact on the operations of the NDIC and the financial institutions under its supervision.

 

“The goal is to ensure the safety and protection of all staff and stakeholders to maintain continuity of its operations towards protecting depositors’ funds and ensuring the stability of the banking sector,” the NDIC managing director said.

 

In his presentation, the Director of Research, Policy and International Relations, NDIC, Dr. S.A. Oluyemi, stated that to mitigate the impact of COVID-19 on the economy, the Federal Government introduced several fiscal and monetary intervention programs.

 

He said, “The President in his 29th March 2020 speech directed for extension of a three-month repayment moratorium for all TraderMoni, MarketMoni and FarmerMoni loans. Similar moratorium was offered to all FG-funded credits advance by the Bank of Industry (BOI), Bank of Agriculture (BOA) and the Nigerian Export Import Bank (NEXIM).

 

“Contingency funds of N984 million were released to Nigeria’s Centre for Disease Control (NCDC) Contingency funds and an additional N6.5 billion was distributed for purchasing more testing kits, opening isolation centers and training medical personnel.”

Fintech

He added, “There was also the reduction of all applicable interest rates on CBN intervention facilities from 9 percent to 5 percent, and extension of moratorium on principal repayments by one (1) year, effective March 1, 2020. All in the bid to ease pressure on loan repayment.

 

“Creation of N1.1 trillion intervention fund with N1 trillion to support local manufacturing to boost import substitution and N100 billion to support the health service sector and product to cushion the adverse impact of the pandemic.

 

“Establishment of N50 billion fund to support households and Small and Medium Enterprises (SMEs) affected by COVID-19, reduction of MPR from 13.5% to 12.5% and lower to 11.5% on 28th May and 22nd September, 2020 MPC Meetings respectively, and granting regulatory forbearance.”

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