Samira Mensah, a credit analyst at S&P credit rating agency has stated that Nigerian fintechs do not pose any challenge to top-tier banks across the country.
She stated this during an interview on CNBC Africa where she noted that rather than compete, Nigerian fitechs should collaborate with Nigerian top-tier banks.
According to her, Nigerian banks have strong balance sheets and a dominant financial position in the market and what is needed between both is collaboration rather than competition.
- She stated, “Let me start by saying, we don’t think that fintechs will pose massive challenges to top-tier banks. Top-tier banks in Nigeria have strong balance sheets, they have a strong competitive position in the market not only in Nigeria but across borders and they (the commercial banks) are collaborating with fintechs already. So, it will be more of collaboration and not competition”
Collaboration between fintechs and banks
She further explained that fintechs should leverage the backend infrastructure of traditional bank’s IT when they roll out new products and services considering the regulatory cost which might be expensive or difficult to meet but are already embedded in banking infrastructure.
Also speaking, she noted that the 60 billion received by Nigerian crypto wallets in 2022 speaks volumes on attracting capital venture and private equity into the Nigerian fintech space.
Fintechs can close the financial exclusion gap in 5years
According to the S&P analyst, fintechs and banks can close the financial exclusion gap in Nigeria in the next five years.
She emphasized that factors such as a good regulatory environment coupled with a young population who prefer consuming financial services via digital channels are responsible for the sporadic growth in the development of fintechs in Nigeria.
- She stated, “They are not working in a vacuum obviously, there is a terrain that is favourable in Nigeria. You have a demographic that is supportive of that trend and who likes to consume financial services through their phone”
- “And they are supported by regulatory policies from a decade ago which made them open diverse digital channels to deepen their reach and all these factors contribute to closing the gap in financial exclusion which we think can be done over the next five years”
