President of the Nigerian Fintech Association (FintechNGR), Dr. Stanley Jacob, has advised fintech companies to move away from offering free services and focus on profitability to ensure long-term sustainability.
Jacob highlighted the need for Nigerian fintechs to prioritise financial gains, especially, amidst the country’s challenging economic environment.
He pointed out that, many fintechs are currently offering services at no charge, a practice he believes is unsustainable in the long run, adding that, ‘there is a cost to service, and continuing to offer everything for free could adversely impact the sustainability of businesses.’
Addressing the broader impact of Nigeria’s economic volatility, particularly, the fluctuating currency exchange rates, Jacob noted that fintechs funded in foreign currency are facing significant challenges.
‘Many fintechs funded in forex are struggling to meet their obligations, especially those earning revenue in Naira. The mismatch in currency exposure poses a huge risk,’ he explained.
Looking ahead, Jacob predicted ongoing regulatory challenges for the fintech sector next year. Despite these hurdles, he expressed confidence that the resilience of fintech entrepreneurs would continue to drive the industry forward.
Jacob’s comments align with a recent statement by the founder and Group CEO of Interswitch, Mitchell Elegbe,
During the 2024 Doing Business in Nigeria Conference, Elegbe warned that many fintechs in Nigeria may never reach profitability due to their early reliance on free services to attract market share. He stressed that such a strategy would hinder their ability to monetise these services in the future.
Both leaders agreed that profitability should be the central focus for fintech businesses if they are to thrive in Nigeria’s complex economic landscape.
