Cash Crisis = Fintech Opportunity.

The Central Bank of Nigeria introduced a new Naira Exchange Policy, aimed at reducing liquidity in the economy and encouraging a cashless society.

The implementation, timelines and motives are still questioned and the impact felt across the economy, more strain on existing banking infrastructure, slow down in informal transactions and goods and services price increase leading to the current inflation rate of 21.91% in Feb 2023.

The possible silver bullet

While questioning the policy, data from the Nigeria Inter-Bank Settlement System paints a different picture :

• Point of Sales transactions increased by 40.69% to N807.16bn in January 2023 from the N573.72bn transactions in January 2022.
• Total NIP transactions for the period rose by 45.52 % year-on-year from N26.65tn as of January 2022 to N38.77tn as of January 2023.
• The usage of electronic channels for transactions grew by 45.50 % year-on-year from 438.48 million times to 638 million times in the period under review.

Why does it matter: The informal sector is becoming more receptive to digital payment channels. Local transport service providers and rural market traders use POS terminals to conduct business. The opportunity presented ranges from providing new PoS terminals targeted at the informal sector to building payment capacity and infrastructure that augment or improve existing ones.