The Chief Executive Officer of Aladdin Digital, Mr. Darlington Onyeagoro, has said that the fintech space in Nigeria is getting almost saturated as there are now many players doing the same thing.
Onyeagoro, who stated this during Business Half Hour, a Nairametrics radio show on Classic FM, said the battlefield for Nigerian fintechs is no longer Nigeria but Africa.
With this, he said Aladdin, which pioneered social commerce banking in Nigeria, is now pivoting to be a global payment infrastructure provider for Africa.
According to Onyeagoro, Aladdin started as a digital bank in 2020 without raising funds but with the support of friends and family.
He noted that to start the same business today will require millions of dollars in investment to gain recognition in the market as there are now many players.
The red ocean
Describing the fintech space in Nigeria as the red ocean, the Aladdin CEO said that any newcomer into the market must either come with something unique and disruptive or with a lot of funds to drive visibility in the market.
- “When I started Aladdin, I started with faith because today the ocean is red. I mean, we are talking about a business that will require millions of dollars to start today. When we started in 2020, it was through the support of family and friends.
- “I always tell people that even if you don’t have money, ensure you have a great or disruptive idea that you can sell to people with a view to galvanising their financial support. You can start small and then strategies to grow
- “Where we are today, the fintech space in Nigeria is almost saturated. There are so many players. For loan apps alone, the last time I checked there are over 300 or 400 lending companies via apps on Play Store. That is Play Store alone, I’m not talking about IoS.
- “So, today for you to actually compete you need a lot of money unless the idea you’re bringing is quite disruptive, unless you are bringing something that nobody has done.
- “I mean that thing is very new and very disruptive and then you will now depend on word of mouth to help you sell because today to even become visible in this saturated market, you need a lot of marketing and you need a lot of funds to do that,” he said.
Facilitating intra-Africa payment
Speaking on the company’s new focus of facilitating payments across Africa, Onyeagoro said the key to African payment is wallet-to-wallet because the average cost of sending money within Africa is currently too high at 15%.
- “It’s quite even higher than sending money from outside Africa, which is around 8.2% on average. The average cost of sending money between Tanzania and Uganda is 36%. What we are trying to do is to make payment seamless and cheaper.
- “If I want to send money to someone in Nairobi, I can send it at 3.5% or 4% and one of the best ways to do it is to have a system where everybody in Africa has an Aladdin app, and they all have a wallet.
- “So, if I do wallet-to-wallet, it’s at zero cost because it will be like an intra-bank transfer. That is what we are building. Our system is able to onboard people across 180 countries in the world.
- “For example, If you are a Kenyan or Ghanaian, we can validate your government-issued ID card, we can validate your Directors and your shareholders. So, we can onboard you as an individual or as a business,” he said.
Onyeagoro added that onboarding across Africa on the wallet system will make payments easier and cheaper across the continent.
He noted that payments via wallet are easier because the system is able to convert from one country’s currency to another within the same ecosystem.
