FG to improve fintechs’ access to funds via regulations, digital infrastructure

By Joy Baba-Yesufu

Efforts to attract fintechs to the stock market and leverage their fundraising capability to boost liquidity may have yielded some progress as the Federal Government, through the Ministry of Communications, Innovation and Digital Economy, disclosed plans to create an appropriate regulatory environment and improve digital infrastructure that would enable fintech to access funds, especially from angel investors.
Also, the government expressed willingness to facilitate the export of tech products and services, as well as collaborate with the NGX on tailored listing options for startups through the exchange technology board.
Minister of Communications, Innovation and Digital Economy, Bosun Tijani, while speaking at a tech event at the weekend themed, ‘Invest in Africa’s Future – Let’s Talk About Exits’, a joint initiative by the Ministry, NGX, and Future Africa in New York, supported by Stanbic IBTC, CardinalStone Partners and Chapel Hill Denham, said the current administration is poised to prioritising innovation and encouraging entrepreneurs, adding that Nigeria is open for investments.
The SEC, had in December 2022, approved the rules of listing on NGX tech board to boost investment in indigenous financial technologically inclined companies across Africa and provide greater visibility to the companies.
Findings showed that Nigerian fintech is approaching investors and getting funded, especially from venture capitalists (VC) in countries such as the United States, United Kingdom, Switzerland and Belgium. From these offshore destinations, the fintech firms have raised over $876.5 million between 2016 and 2022.
From 2014 to 2020, for instance, fintechs raised about $600 million in funding, attracting 25 per cent ($122 million) of the $491.6 million raised by African tech startups in 2019 alone – second only to Kenya, which attracted $149 million.
The African fintech sector secured $1.45 billion in funding for 2022, a 39.3 per cent increase from the previous year with the sector being the most attractive to investors last year, making up 43.4 percent of all start-up investments ($ 3.3 billion) into the continent.
Indications also emerged that 205 fintech start-ups raised funding, with Nigerian fintech making up almost 40 percent of startups and 46 percent of fintech funding,” it said.
Experts have argued that these venture capitalists have invested a huge amount of money in emerging financial services startups, thus making it possible for fintech firms to grow and access more capital offshore.