Nigeria’s fintech arena nears saturation, says Darlington Onyeagoro

Mr. Darlington Onyeagoro, the Chief Executive Officer of Aladdin Digital, expressed his views on the evolving landscape of the fintech sector in Nigeria during an interview on Business Half Hour, a radio show on Classic FM hosted by Infostride News. He highlighted the saturation of the market with numerous players offering similar services and the need for fintech companies to explore opportunities beyond Nigeria, specifically in the broader African context.

As Mr. Onyeagoro pointed out, the Nigerian fintech arena has become a “red ocean,” a space where competition is fierce, and the challenge lies in differentiating oneself from the myriad of competitors. In this increasingly competitive environment, newcomers must either introduce innovative and disruptive solutions or possess substantial financial resources to establish a visible presence.

Aladdin Digital, a pioneer in the concept of social commerce banking in Nigeria, has decided to pivot its focus towards becoming a global payment infrastructure provider for the entire African continent. This shift reflects the recognition that the battlefield for Nigerian fintech companies has expanded beyond national borders.

In the initial stages of its journey, Aladdin started as a digital bank in 2020 without raising external funds, relying on support from friends and family to kickstart operations. Mr. Onyeagoro emphasized that, had they embarked on the same venture today, it would require significant investment, amounting to millions of dollars, to gain recognition in the market. This transformation highlights the rapid evolution and maturation of the fintech sector in Nigeria over a short period.

Mr. Onyeagoro’s perspective underscores the importance of innovative ideas and the ability to secure financial support even in the absence of substantial capital. He encourages aspiring entrepreneurs to focus on generating groundbreaking and disruptive concepts that can captivate the interest and financial backing of potential investors.

The saturation of the Nigerian fintech space is evident when considering the abundance of lending applications available in app stores. Mr. Onyeagoro noted that there are over 300 to 400 lending companies offering apps on the Play Store alone, not even taking into account iOS. To stand out in this crowded market, new entrants must either introduce groundbreaking solutions or rely on extensive marketing efforts and substantial financial resources to gain visibility.

Aladdin Digital’s strategic shift towards facilitating cross-border payments within Africa is driven by the need to address the high costs associated with intra-Africa money transfers. Currently, the average cost of sending money within Africa is around 15%, which is notably higher than the cost of sending money from outside the continent, averaging at 8.2%.

To combat this issue, Aladdin Digital is committed to creating a seamless and cost-effective payment ecosystem. Wallet-to-wallet payments are at the core of their strategy, with the aim of reducing transaction costs significantly. The concept is simple: by having an Aladdin app and wallet accessible to every individual and business across the continent, money transfers can be conducted at minimal to no cost, akin to an intra-bank transfer.

This approach not only simplifies the payment process but also significantly reduces transaction fees. For instance, sending money to someone in Nairobi could be as cost-effective as 3.5% to 4%, a substantial improvement from the existing high rates. Aladdin Digital envisions a future where an interconnected network of wallets enables currency conversion within the same ecosystem, making cross-border transactions more efficient and affordable.

The company’s vision is not confined to the borders of Nigeria. They aim to expand their network and services across the African continent, onboard individuals and businesses from various countries, and create a seamless and cost-effective payment infrastructure that fosters financial inclusion and regional economic growth.

In conclusion, Mr. Darlington Onyeagoro’s insights into the evolving fintech landscape in Nigeria highlight the challenges and opportunities present in this dynamic sector. While the Nigerian market may be saturated, there are vast prospects for fintech companies to make a meaningful impact in the broader African context, particularly by addressing the high costs associated with intra-Africa payments. Aladdin Digital’s pivot towards becoming a global payment infrastructure provider for Africa signifies a strategic move to address these challenges and contribute to the economic development of the continent.