Samira Mensah, a credit analyst at S&P Global, has expressed her view that Nigerian fintechs do not pose a significant challenge to top-tier banks in the country.
In a recent interview on CNBC Africa, Mensah emphasized the need for collaboration between the two sectors, noting that the strong balance sheets and dominant financial positions of Nigerian banks make them formidable players in the market.
She said, “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.”
She highlighted the importance of fintechs leveraging the backend infrastructure of traditional banks when introducing new products and services.
According to Mensah, this approach helps fintechs overcome regulatory challenges and benefit from the existing banking infrastructure.
Addressing the growth potential of the Nigerian fintech space, Mensah acknowledged the significant capital venture and private equity inflow, citing the $60 billion received by Nigerian crypto wallets in 2022.
Mensah also expressed optimism regarding the potential for fintechs and banks to close the financial exclusion gap in Nigeria within the next five years.
She attributed this potential success to a supportive regulatory environment and a young population that prefers digital channels for accessing financial services.
“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,” she said.
“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,” she added.
