Fintech in Nigeria: Untapped opportunities emerging from the pandemic

Updated: Apr 19


March 22, 2021 at 17:00 PM ET

  • Overall demand for financial products has shifted significantly during the COVID-19 pandemic. Notably, demand for insurance and investment products grew the most.

  • Back in April 2020, there was a contraction of opportunities for insurance products, mobile money, day-to-day banking, loans, and investments as lockdowns and restrictions slowed economic activities.

  • On the other spectrum, there was an expansion of opportunities for saving accounts, cards, and saving pockets as people were gearing up for tough times ahead.


Last week Kuda a Nigeria fintech that wants to serve every African on the planet by offering a digital banking experience, raised $35M Series A from investors just 5 months after raising a $10M seed round. The mobile-only bank claimed 650,000 customers and over $500M in transactions on its platform.


This latest investment comes on the back of the $170M Series C raise by Flutterwave, another Nigeria fintech that focusing on building the payment infrastructure for Africa, valuing the company at $1B. Agboola, the founder of Flutterwave says his company grew more than 100% in revenue within the past year due to the pandemic. It also contributed to its compound annual growth rate (CAGR) of 226% from 2018. The startup claims over 500,000 users and over 20,000 merchants on its platform. Since the beginning of the year, fintech startups from Nigeria have received over $250M in funding.


Amid this increased interest from the investment community in the Fintech space in Nigeria,

new data from Kasi Insight confirms that COVID-19 had a significant impact on the demand for financial products. In fact, between April 2020 and November 2020 demand for the overall category grew 5% with insurance and investment products growing the most at 19% and 16% respectively according to the Kasi Category Tracker, a measure based on a survey of 5,500 Nigerian adults. The survey which is part of the Kasi Covid-19 tracker was conducted between Feb. 2020 and Dec. 2020.


Kasi Category tracker estimates the demand for a category by computing the difference between the percentage of consumers purchasing more of your products and the percentage of consumers purchasing less of your products.



A year ago while Nigeria was getting its first case of COVID-19, consumer demand and purchase intent for financial products such as insurance, mobile money, day-to-day banking, loans, and investment was negative meaning a majority of consumers were looking to purchase less of these products as a result of the pandemic.


Among the products with slowing purchase momentum, we had insurance with a gap of -16, and investment products had a gap of -5. On the other end, consumer demand and purchase intent for saving pocket, cards, and saving account was positive meaning a majority of consumers were looking to purchase more of these products as a result of the pandemic.


Our data shows that seven months later, consumer demand and purchase intent for financial products have shifted significantly. Amongst the products that saw an acceleration of the demand, insurance products' demand grew 20% followed by investment products at 16%. On the other end, the pandemic also resulted in slowing demand for saving pockets that saw a drop of 20%. As a result of the pandemic, consumers are now looking to deploy savings accumulated to investment products to generate higher returns. Due to the negative economic impact of the pandemic (job loss, lockdowns, slow economic activity), people have limited ways to save additional cash today than they did back in April.



The shift in demand for insurance products can be a deal-breaker for the insurance industry in Nigeria. The country ranked 62nd in the world when it comes to insurance penetration and has a total premium volume of $1.64 billion. Insurance premium penetration rates of 1% of GDP, ranked 87th in world terms, and an average premium per capita of $9.4, reflect a market that is in development according to a PWC report.


Moreover, analysts from AM Best believe that Nigeria's insurance market offers significant potential despite the headwinds. They cite obstacles to insurance market growth that include low consumer awareness, lax enforcement of mandatory coverage laws, and new proposed capital requirements.


According to Kasi data, COVID-19 seems to have raised awareness of insurance products amongst consumers in Nigeria. With an urban population of approximately 100M people, a 20% growth in demand for insurance products due to COVID-19 can translate into millions of potential new customers for the industry.


While a lot of investment has gone to Fintech that focuses on building the payment infrastructure and digital banking to target the unbanked and the increasing cashless post-COVID-19 normal, the demand for insurance products is picking up and there is an opportunity to innovate and capitalize on this untapped market as businesses recover from the pandemic. Insurtech startups like Casava, Autogenius and CompareIN are well-positioned to disrupt the market.


Learn how you can recover from the pandemic by unlocking untapped opportunities using Kasi Category Demand datasets.


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