How much do I need to start a fintech in Nigeria?

The Nigerian fintech scene is booming, attracting aspiring entrepreneurs eager to revolutionize finance. But before diving in, a crucial question arises: how much does it really cost to start a fintech company in Nigeria?

This blog post serves as your comprehensive guide, untangling the financial Industry and providing clear answers for beginners. We’ll delve into the essential costs you’ll encounter, from regulatory requirements and licensing fees to technological infrastructure and team building.

Bear in mind that the specific amount will you need to start a fintech company depends on your unique business model and ambitions.

Legal and Regulatory Costs:

• Company Registration: The minimum share capital for a private company in Nigeria is N100,000 (roughly $100). However, fintech companies often require specific licenses depending on their operations.
• Licenses: License fees depends on the license type. Popular licenses include:
  • Payment Solution Service Provider (PSSP): N100,000 application fee, N250 million escrow deposit (refundable), and N1 million licensing fee.
  • Payment Terminal Service Provider (PTSP): N100,000 application fee, N100 million escrow deposit (refundable), and N1 million licensing fee.
• Legal Consultation: Engaging a lawyer familiar with fintech regulations is Important. Expect fees based on the complexity of your business and chosen legal structure.

Technology and Development:

• Software Development: Building a robust and secure fintech platform requires skilled developers. Costs depend on the platform’s complexity, features, and chosen development approach (in-house vs. outsourcing).
• Third-party Integrations: Many fintech solutions rely on integrations with other financial institutions or services. Integration fees and ongoing subscription costs can add up.

Operational Expenses:

• Office Space: The cost varies depending on your location and team size. Consider virtual office options for initial stages.
• Staff Salaries: Hiring skilled personnel, including compliance officers and tech professionals, will incur salaries and benefits.
• Marketing and Advertising: Building brand awareness and attracting customers requires marketing efforts, which can range from free social media strategies to paid advertising campaigns.

How much does it Cost to get a Fintech License in Nigeria?

1. Switching and Processing Licence: Application fee of N100,000, payment of the refundable sum of N2 billion in escrow to CBN and licensing fee of N1 million to be paid before the issuance of the final licence.
2. Mobile Money Operator Licence: Application fee of N100,000, payment of the refundable sum of N2 billion in escrow to CBN and licensing fee of N1,000,000 to be paid before the issuance of the final licence.
3. Payment Solution Services (PSS): Application fee of N100,000, payment of the refundable sum of up to 250 million (depending on which of the licenses the company wishes to obtain) in escrow to the CBN and licensing fee of N1,000,000 to be paid before the issuance of the final licence.
4. Payment Terminal Service Provider (PTSP) Licence: Application fee of N100,000, payment of the refundable sum of N100 million in escrow to the CBN and licensing fee of N1,000,000 to be paid before the issuance of the final licence.
5. Payment Solution Service Provider (PSSP) Licence: Non-refundable application fee of N100,000, payment of the refundable sum of N100 million in escrow to the CBN; and licensing fee of N1 million to be paid before the issuance of the final licence.
6. Super-Agent Licence: Non-refundable application fee of N100,000, payment of the refundable sum of N50 million in escrow to the CBN and licensing fee of N1 million to be paid by the applicant before the issuance of the final licence.

How to start a fintech in Nigeria?

Step 1: Identifying Your Niche & Value Proposition

Before diving in, define your unique value proposition:

• Problem & Solution: What specific pain point will your fintech address? Identify a gap in the market and tailor your solution to cater to a defined target audience.
• Competitive Landscape: Research existing fintech players in your chosen niche. Understand their strengths and weaknesses to position your solution strategically.

Step 2: Understanding Regulations & Compliance

The Nigerian fintech space is dynamic and closely regulated. Familiarize yourself with:

• Central Bank of Nigeria (CBN): The primary regulator for most fintech activities in Nigeria. Obtain necessary licenses based on your specific services (e.g., Payment Service Banks, Payment Service Providers).
• Other Regulatory Bodies: Depending on your operations, additional licenses from bodies like the Nigerian Communications Commission (NCC) may be required.
• Compliance is crucial: Stay updated on evolving regulations and adhere to strict data privacy and consumer protection guidelines.

Step 3: Building Your Team & Business Structure

• Assemble a competent team: Recruit talent with expertise in fintech, finance, technology, and legal matters. Consider advisors and mentors for guidance.
• Choose a business structure: Sole proprietorship, partnership, or limited liability company (LLC) each have advantages and disadvantages. Consult legal professionals for the best fit based on your goals and resources.

Step 4: Fundraising & Financial Planning

• Bootstrapping or external funding?: Decide if you’ll self-fund or seek investment. Prepare a comprehensive financial plan showcasing your business model, market potential, and funding requirements.
• Explore funding options: Angel investors, venture capitalists, crowdfunding platforms, and government grants can be potential sources of capital.

Step 5: Product Development & Technology

• Develop a secure and user-friendly platform: Prioritize robust technology infrastructure and prioritize data security. Adhere to relevant regulations and industry best practices.
• Start small and iterate: Pilot your product with a limited audience to gather feedback and refine your offering before a full-scale launch.

Step 6: Marketing & User Acquisition

• Craft a compelling brand identity: Communicate your value proposition clearly and differentiate yourself from competitors.
• Targeted marketing: Utilize digital channels, strategic partnerships, and community engagement to reach your target audience effectively.

Step 7: Launch, Growth, & Beyond

• Monitor and adapt: Continuously collect user feedback, track key metrics, and adapt your offering based on market trends and user needs.
• Embrace innovation: Stay ahead of the curve by exploring emerging technologies and adapting to the evolving fintech landscape.

What are the categories of financial technology companies in Nigeria

1. Digital Banks:

Think of these as banks without physical branches. They offer traditional banking services like account opening, deposits, withdrawals, and even loans, but solely through digital platforms like mobile apps and websites. Names like kuda bank and Carbon fall into this category.

2. Payment Service Banks (PSBs):

Similar to digital banks, PSBs offer basic financial services like deposits, withdrawals, bill payments, and airtime top-up. However, their transactions have lower limits and they cannot issue credit cards or provide loans. Moniepoint and NUBAN are examples of PSBs.

3. Payment Service Providers (PSPs):

These companies act as intermediaries, enabling secure electronic payments between individuals, businesses, and other financial institutions. Popular PSPs in Nigeria include Paystack, Flutterwave, and Interswitch.

4. Lending/Credit Companies:

Looking for a loan? These companies use technology to assess your creditworthiness and offer various loan options, often faster and more conveniently than traditional banks. FairMoney and Migo are prominent players in this space.

5. Insurtech Companies:

Technology is transforming the insurance industry too! Insurtech companies offer innovative insurance products, streamlined claims processes, and often lower premiums. Lasan and Adeso are examples of insurtech companies in Nigeria.

6. Investment and Wealth Management Platforms:

These platforms help you invest your money in different assets like stocks, bonds, and mutual funds. They often use technology to make investing more accessible and affordable, especially for beginners. PiggyVest and Cowrywise are well-known investment platforms in Nigeria.

7. Blockchain and Cryptocurrency Companies:

While cryptocurrency regulations are still evolving in Nigeria, companies in this category are exploring the potential of blockchain technology for financial services like payments, remittances, and even crowdfunding. Bundle Africa and Yellow Card are examples of companies operating in this space.

8. Regtech Companies:

These companies provide technology solutions to help financial institutions comply with regulations and combat fraud. While not directly interacting with consumers, they play a crucial role in ensuring the security and stability of the financial system.

Who regulates Financial Technology companies in Nigeria?

The Nigerian financial technology (FinTech) landscape is overseen by a multi-pronged regulatory framework, with the Central Bank of Nigeria (CBN) serving as the primary governing body. The CBN derives its regulatory authority from the Banks and Other Financial Institutions Act, 2020 (BOFIA), which empowers it to license and oversee a broad range of financial institutions, including FinTech companies.

However, the regulatory landscape extends beyond the CBN. Other key players include:

• National Deposit Insurance Corporation (NDIC): Established under the NDIC Act, 2006, the NDIC plays a crucial role in protecting depositors’ funds by providing deposit insurance coverage for licensed banks and other deposit-taking financial institutions.
• Nigerian Communications Commission (NCC): Governed by the Nigerian Communications Act, 2003, the NCC regulates telecommunications and broadcasting sectors, which are often utilized by FinTech companies for service delivery.
• Securities and Exchange Commission (SEC): Operating under the Investment and Securities Act, 2007, the SEC regulates the capital markets and investment activities, including those offered by certain FinTech companies.
• National Insurance Commission (NAICOM): The NAICOM, established by the National Insurance Commission Act, 1997, oversees the insurance industry, which could be relevant to specific FinTech offerings.
• Corporate Affairs Commission (CAC): As per the Companies and Allied Matters Act, 2020 (CAMA), the CAC regulates business registration and operations, ensuring compliance with legal requirements for all FinTech companies.

What are the regulatory requirements for registering a fintech company in Nigeria?

Every fintech company in Nigeria must be registered with the Corporate Affairs Commission (CAC). This involves submitting essential documents like your company’s Memorandum and Articles of Association, shareholding structure, and details of directors. Remember, depending on your specific business model, additional registrations with other agencies like the Securities and Exchange Commission (SEC) might be necessary.

Obtaining the right license is vital. The Central Bank of Nigeria (CBN) is the primary regulator, issuing various licenses based on your activities. For instance, Payment Service Banks (PSBs) focus on financial inclusion, while Payment Service Providers (PSPs) handle electronic payments. Carefully review the CBN’s guidelines for each license type to ensure you apply for the most suitable one.

License requirements for fintech companies

1. Alternative Lending/Digital Credit licenses (2.5 billion share capital)
2. Digital Crowdfunding Intermediary licenses (one hundred million share capital)
3. Digital Banking licenses with subset of licenses such as –

• a). Switching and Processing licenses – Two billion share capital
• b). Mobile Money Operator licenses – Two billion share capital
• c). Payment Solutions Service Provider licenses – One hundred million share capital
• d). Payment Terminal Service Provider licenses – One hundred million share capital
• e). Super-Agent Banking licenses – Fifty million share capital
• f). Payment Service Bank licenses – Five billion share capital
• g). Foreign Exchange & Remittance licenses – Two billion share capital
• Insurtech licenses are divided into life insurance (two billion share capital), general insurance (ten billion share capital), reinsurance (twenty billion share capital), composite insurance (eighteen billion share capital)
•  Robo-Advisory licenses – Five million share capital)

How much does it cost to register a fintech in Nigeria?

Registration of the company with the Corporate Affairs Commission. The minimum share capital of a Super Agent company is N50 Million. An application must be made to the CBN with all accompanying documents. The application fee is N100,000 while the licensing fee is N1 Million.

What is the minimum capital requirement for fintech in Nigeria?

One Hundred Thousand Naira

What is the minimum Share Capital for FinTech in Nigeria? Although the required minimum share capital for private companies in Nigeria is N100,000 (One Hundred Thousand Naira) that of fintech is dependent on the type of license that the company requires to operate with.

How much do you need to start a fintech company?

To launch a fintech startup, you need to outline the plan, create the design, turn the design into code, test and launch the app, and take care of maintaining and updating your product. Pay attention to marketing and security measures. In general, starting a fintech company will cost an estimated $73,700.

How do I start my own Fintech company?

Here is an overview of the important steps you need to take when starting a fintech company:

1. Get to know the regulations. Fintech and banking are highly regulated industries. …
2. Identify your niche. …
3. Find your competitive advantage. …
4. Hire the team. …
5. Choose the tech stack. …
6. Prioritize data protection. …
7. Get funded. …
8. Build and improve.

How much is CBN license fee for Fintech?

The application fee is a non-refundable fee of ₦100,000 (One Hundred thousand Naira), which is payable to the CBN via the LIcensing Fee for Payment Products Account No. NGN140230089/ABJ. Also, licensing fee of ₦1,000,000 (One Million Naira) to be paid before the issuance of the final license, if successful.

How do fintech make their money?

How do fintech companies generate revenue? Fintechs earn revenue through subscriptions, third parties, fees, commissions, advertising, data monetization, and partnerships.

How much money can you make from fintech?

Fintech Salary

	Annual Salary	Monthly Pay
Top Earners	$184,500	$15,375
75th Percentile	$151,000	$12,583
Average	$123,495	$10,291
25th Percentile	$88,000	$7,333

What is the highest paying job in fintech?

6 highest-paying jobs in the FinTech industry

• Data Scientist.
• Product Manager.
• Cybersecurity Analyst.
• Blockchain Developer.
• App Developer.
• Financial Analyst.

How long does it take to build a Fintech?

Advanced Fintech App: 12-18 Months

App Type	Avg. development time
Basic Fintech App	3-6 months
Intermediate Fintech App	6-12 months
Advanced Fintech App	12-18 months

How do I get investors for fintech?

What are the best ways to identify investment opportunities in fintech

1. Understand the fintech landscape.
2. Define your investment thesis.
3. Scout for potential startups.
4. Conduct due diligence.
5. Negotiate the deal terms.
6. Monitor and support the startups.

How long does it take to make a Fintech app?

To build a Fintech app depends on how big and complex the project is. An app with basic functionality may often be built in two to three months, but more complex apps might take up to six months to complete.

Which body is responsible for FinTech in Nigeria?

The CBN being the primary body responsible for regulating the financial sector in Nigeria has a plethora of regulations that are applicable to various aspects of the Fintech business some of which include: CBN Guidelines on Open Banking, 2024.

What background do you need for fintech?

Fintech professionals typically have a background in either finance or technology, and many have experience working in both industries. They are often creative and entrepreneurial and always look for new ways to improve the financial system.

What should I learn for fintech?

Data analytics, Artificial Intelligence, and Python Programming are critical areas to study before embarking on a career in FinTech. Salaries for FinTech roles can be lucrative, and gaining expertise in this field can be achieved through bootcamp or certificate training models, such as those offered by Noble Desktop.

Why fintech is hard?

Learning FinTech involves mastering industry-specific tools such as Python, as well as constantly staying ahead of technological innovation in the field. Professionals in FinTech need to combine both hard skills, such as data visualization and programming, with soft skills like communication and business acumen.

Does FinTech require coding?

Can you get into FinTech without programming knowledge? Yes indeed. You can build a successful career in FinTech without programming or coding knowledge. Even if you are a non-tech professional, having programming knowledge is not crucial to start and lead FinTech projects.

Is FinTech in demand?

At the same time, the once-in-a-generation technology revolution under way is generating more value creation opportunities. Our research shows that revenues in the fintech industry are expected to grow almost three times faster than those in the traditional banking sector between 2022 and 2028.

Why is FinTech so successful?

Fintech has been successful due to their ability to provide faster, cost-efficient, and straightforward solutions to financial problems. According to Gaper.io, fintech startups use technology to automate financial processes, which reduces the time and cost required to provide financial services.

How profitable is fintech in Nigeria?

The largest market will be Digital Investment with a AUM of US$70.50m in 2024. The average AUM per user in the Digital Assets market is projected to amount to US$11.61 in 2024. The Digital Assets market is expected to show a revenue growth of 26.50% in 2025.

How can I get PSSP license in Nigeria?

The procedure for obtaining a PSSP license in Nigeria is as follows:

1. Registration of the company with the Corporate Affairs Commission.
2. The minimum share capital of a Payment Solution Service Provider company is ₦100 Million.
3. An application must be made to the CBN with all accompanying documents.

What is PSP in banking?

A payment service provider (PSP) is a third-party company that allows businesses to accept electronic payments, such as credit cards and debit cards payments. PSPs act as intermediaries between those who make payments, i.e. consumers, and those who accept them, i.e. retailers.

What is the CBN requirement for PSSP license?

A PSSP or PTSP category company must deposit NGN100 Million with the CBN while the MMO and Switching Companies are mandated to deposit a minimum of NGN2 Billion each with the CBN before the commencement of the application process.

How much is CBN license fee for Fintech?

The application fee is a non-refundable fee of ₦100,000 (One Hundred thousand Naira), which is payable to the CBN via the LIcensing Fee for Payment Products Account No. NGN140230089/ABJ. Also, licensing fee of ₦1,000,000 (One Million Naira) to be paid before the issuance of the final license, if successful.

How much does it cost to set up a Fintech company in Nigeria?

Registration of the company with the Corporate Affairs Commission. The minimum share capital of a Super Agent company is N50 Million. An application must be made to the CBN with all accompanying documents. The application fee is N100,000 while the licensing fee is N1 Million.

How do I start my own fintech company?

Here is an overview of the important steps you need to take when starting a fintech company:

1. Get to know the regulations. Fintech and banking are highly regulated industries. …
2. Identify your niche. …
3. Find your competitive advantage. …
4. Hire the team. …
5. Choose the tech stack. …
6. Prioritize data protection. …
7. Get funded. …
8. Build and improve.

How do I start fintech from scratch?

How to Get Started in Fintech?

1. Step 1: Find the Right People. …
2. Step 2: Identify Your Target Niche. …
3. Step 3: Develop an Idea. …
4. Step 4: Define Your USPs. …
5. Step 5: Define Your MVP Scope. …
6. Step 6: Study Relevant Laws and Regulations. …
7. Step 7: Determine the Fintech Services You’ll Provide. …
8. Step 8: Research Your Competitors.

How much does fintech software cost?

The short answer is that there’s no fixed price. The cost of making a fintech app depends on several factors, like the features, the type of app, the tech stack, the goals, etc. Generally, it costs between $30,000 and $500,000. But it can vary depending on the app’s scale and functionality.