By Omoruyi Edoigiawerie Esq
Recently Carbon CEO Ngozi Dozie sparked discussions on Twitter (now X) with his article, “The scoop on debit cards”. In it, he announced Carbon’s discontinuation of debit card operations and urged fintech start-ups to analyse decisions carefully instead of chasing trends.
The following week, Techpoint Africa’s Chimgozirim Nwokoma published, “Why Nigerian fintechs struggle with card issuance, highlighting broader challenges fintechs face in the card business, including high operational costs, regulatory constraints, and insufficient revenue opportunities compared to traditional banks.
These conversations highlight the pressing need for solutions tailored to our local context. From experience, I have seen first-hand the unique challenges our technology ecosystem faces.
*Nigeria’s technology infrastructure is a tale of two worlds
In urban hubs like Lagos, we enjoy relatively robust internet access and technological advancements. However, venture beyond these cities, and the reality starkly contrasts. Many rural areas lack even basic 2G connectivity, forcing residents to climb trees for signals.
This infrastructure gap hampers innovation and limits the reach of tech solutions.
As an early-stage founder, it is crucial to understand that our country’s technological landscape is not homogenous. The disparity between urban and rural access to technology means that solutions must be tailored to diverse environments. Recognising and addressing these infrastructural challenges is the first step towards creating impactful, inclusive fintech solutions that can thrive across Nigeria.
This week, I want to share practical insights for navigating and understanding the diverse technological landscape in Nigeria.
*Need for contextualised fintech solutions
Many start-ups make the mistake of designing products that cater only to communities or groups they are familiar with.
However, understanding cultural nuances is vital for the success of any consumer-facing fintech product in Nigeria. Customer behaviour is deeply influenced by cultural, religious, and political factors. For example, if your product involves interest-based transactions, you will alienate the Muslim market, which adheres to interest-free financial practices.
You need to figure out how to design products that respect and incorporate these cultural considerations. This approach, known as “glocalisation,” means creating solutions that are globally sound yet locally relevant.
Take the time to study the diverse cultural landscape of your target market. Tailor your products to fit the unique needs and preferences of different communities. By doing so, you not only increase adoption rates but also foster trust and loyalty among your users. Culturally aware product development is not just a good practice—it’s a necessity for achieving widespread success in Nigeria’s multifaceted market.
This means also considering the unique obstacles faced in rural areas, such as limited internet access and traditional banking systems. By contextualising your fintech products to address these specific challenges, you ensure wider adoption and greater impact.
The goal is to create inclusive solutions that make financial services accessible to all, regardless of their location, faith, or socioeconomic status.
*Sustainability and market adaptation for start-ups
Sustainability is another critical aspect often overlooked by early-stage start-ups.
Many fintech ventures initially rely on investor funding to bridge profitability gaps, but this model is not viable long-term. It’s essential to build products that the market can sustain without perpetual external funding. Understanding your market’s specific needs and creating data-driven solutions is key.
For instance, while a product may succeed in Lagos, it might fail in rural areas due to different infrastructural and economic realities. Adaptability is crucial—start-ups must be willing to pivot based on real-world feedback and market demands. Additionally, profitability should stem from genuine market needs, not just investor support.
By focusing on sustainable practices and market adaptation, you ensure your start-up can thrive independently, creating lasting impact and value. This strategic approach will help you build a resilient business that can withstand the challenges of Nigeria’s diverse and evolving landscape.
*The future of payment solutions
As the global trend shifts towards digital and contactless payments, Nigerian start-ups must adapt to stay competitive.
Traditional physical cards are becoming less relevant, especially in an environment where many lack internet access or the latest smartphones. Instead, focus on innovative solutions like virtual cards and USSD-based payments, which are more accessible and practical for a broader audience.
For instance, USSD transfers are effective in areas with poor internet penetration, making them ideal for reaching underserved populations.
By prioritising digital and contactless payment solutions, you not only cater to current consumer preferences but also future-proof your start-up. This strategic shift can help bridge the gap between urban and rural areas, ensuring that your fintech solutions are both inclusive and cutting-edge.
*Political and regulatory engagement for start-ups
Navigating Nigeria’s regulatory landscape is one of the toughest hurdles for fintech start-ups.
Our regulatory environment is fragmented, with agencies like CBN, SEC, and NCC working in silos. This lack of coordination leads to confusion and slows down innovation. Moreover, the absence of a unified digital identity system complicates customer verification and fraud prevention.
To succeed, you must stay informed about regulatory changes and ensure compliance. This is why, no matter what stage you are as a Nigerian start-up, you need the services of legal experts who can guide you through the complexities.
Also, it’s no longer enough to focus on innovation; you must also learn to navigate and influence the regulatory landscape. As players in the Nigerian tech ecosystem, we must realise that fighting the government is not the solution. You’re better off getting a seat at the table or a leg in the room.
In all my years of experience as a start-up attorney, I have learnt not to fight the government. Rather, I befriend and influence them through goodwill.
Yes, there are some people whose role is to call out the government- great, if that’s your calling. But that’s not my calling. My calling is to help start-ups achieve sustainable growth. So even when I disagree with the government, I sit with them and get them to see reason. It’s easier to get them to do these things inside than from the outside.
We must not relent in engaging policymakers. Whether through public discourse or building relationships with key policy stakeholders. Engaging with policymakers and regulators can help shape favourable policies and create a more conducive environment for your business.
Even if you can’t build relationships or engage regulators, your political involvement is still required. Young entrepreneurs should strive to have a voice in policy-making by supporting and voting for candidates who understand and advocate for the tech industry. By actively participating in the political process, you can help drive changes that benefit the entire ecosystem.
Fostering a collaborative relationship with regulators and policymakers is not only beneficial but necessary for long-term success in Nigeria’s dynamic fintech landscape.
*Final thoughts
As we navigate the unique challenges of Nigeria’s fintech landscape, it is imperative to approach innovation with a holistic mind-set.
Addressing infrastructural gaps, understanding cultural nuances, and engaging proactively with regulators and policymakers are crucial steps for building sustainable and inclusive fintech solutions.
The journey of a start-up is not just about immediate success but about creating lasting impact. It is now imperative that we look towards prioritising market sustainability, contextualising products to suit local realities, while also fostering public sector engagement, we can pave the way for a robust and resilient fintech ecosystem.
As early-stage founders, your role is pivotal in driving this transformation. Let’s continue the dialogue, collaborate with stakeholders, and advocate for the necessary changes to unlock the full potential of technology in Nigeria. Together, we can create a future where fintech solutions are accessible, equitable, and beneficial for all.
Omoruyi Edoigiawerie is the Founder and Lead Partner at Edoigiawerie & Company LP, a full-service law firm offering bespoke legal services with a focus on start-ups, established businesses, and upscale private clients in Nigeria. The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. His firm can be reached by email at hello@uyilaw.com.
*This article was first published in the Equity Merchants Newsletter by Techpremier Media.
