How to Start a FinTech Company in Nigeria – 2022 Step by Step Guide

How to Start a Fintech Company in Nigeria 2022

You are probably here because you are considering how to start your own Fintech company in Nigeria. If that is the case then you are in the right place. FinTech has grown in bounds in the last few years in Nigeria. We have seen FinTechs emerge as unicorns just within 5 years of starting. The likes of Flutterwave, PayStack and OPay has been an eyes opener to a lot of Nigerians on the opportunities in that sector. And if you want to become a player in the FinTech sector you need knowledge. It is a sector that is deeply built on knowledge and skill. So I will be sharing the step by step guide on how to start your own Fintech company in Nigeria.

What is FinTech?

FinTech is a wordplay and combo of two popular words;’ finance’ and ‘technology’. In other words, Fintech is actually the short form of saying Financial Technology. So instead of saying Fintech one can say Financial Technology and the person will be correct.

So what is Financial Technology (Fintech)? According to wikipedia it is the technology and innovation that aims to compete with traditional financial methods in the delivery of financial services. It is an emerging industry that uses technology to improve activities in finance.

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Building a fintech company in Nigeria has become synonymous with the ability to build an app that makes financial transaction seamless for the masses. Since technology has become the major driver of all business sectors today, it means fintech opportunities will continue to open even further.

FinTech Market Statistics

FinTech is transforming the financial sector at a rapid rate. It impacts how people use their bank accounts and credit cards, invest, lend, or purchase insurance.

Since 2018, the United States has consistently accounted for more than 57% of the FinTech market.

Based on the statistics from Mordor Intelligence, the FinTech industry in the United States has been growing at a CAGR of 8.6%. This growth is expected to continue till 2024.

Here are other impressive FinTech Statistics:

What are you going to do with this stat? Maybe it is time you consider how to start your own fintech company in Nigeria.

How Much Do You Need to Start a FinTech Company in Nigeria?

Of course running a fintech in Nigeria is just like running a bank but this time an online bank. So it is going to cost some money to start. Though you are not likely to spend on building physical structures and incurring so much operating cost that physical office attracts but you will have to spend considerable amount on securing license from the relevant regulatory authorities. And also spend on building the mobile app on which your business will run.

However, the amount you need to secure a license is depends on the kind of service you want to render with your fintech company. Here are some examples of different types of FinTech and how much it will cost to secure the license.

Loan Service App

Issuing a Financial Institution license to any firm in Nigeria is the sole responsibility of the Central Bank of Nigeria(CBN). So if you want your Fintech to operate as a money lending platform you need to get the license from CBN.

Getting a money lending service license is relatively easy. In terms of time, it takes just about 2 months to secure the license from CBN. And in terms of the money involved, you will need a minimum capital requirement of 2.5Billion Naira (about $5million).

Other requirements will include:

  • A comprehensive IT policy
  • Detailed business plan with 5 years financial projection.
  • An Enterprise Risk Management plan
  • And a Dispute Resolution Framework

Examples of this type of Fintech in Nigeria are Carbon, Fairmoney, QuickCheck, L-Credit etc.

Crowdfunding Service Apps

Crowdfunding involves raising money for a business or project from a large number of people through the Internet. Security and Exchange Commission is the agency in charge of regulating that in Nigeria. So if your fintech is focusing on that you need to get a license from SEC.

In terms of time, getting a license from SEC to operate a crowdfunding platform usually take about 2 months.

And in terms of money, getting a Crowdfunding portal/Intermediary operating license in Nigeria you need a minimum capital requirement of 100 million Naira ($200,000.00).

In addition to that you must also :-

– Register a company with your objects clause stating clearly that Crowdfunding is the sole purpose of the company

– Have management accounts that are not more than a month old as at the time of filing for a Crowdfunding license with the SEC

– Submit a sworn undertaking to furnish the SEC with copies of amendments to the company’s Memorandum and Articles of Association as well as the company’s by-laws or rules

– Provide 3 sponsored individuals to represent the company. One of whom must be the company’s designated SEC Compliance officer as well as the company’s Managing Director

– Have a current fidelity insurance bond valued at a minimum of 20% of the paid-up capital.

Have a minimum track record of 2 years of doing business in Nigeria to raise funds through a Crowdfunding Intermediary portal.

How Much can You Raise?

Even after you have met the requirement for the license you must know that you can’t crowdfund endlessly. There is a limit to the amount you can raise per time.

Medium enterprises cannot raise more than 100 million Naira($200,000.00)  in a year. While Small and Micro enterprises cannot raise more than 70 million Naira($140,000.00) and 50 million Naira($100,000.00) in a year respectively.

However, a subcategory of Crowdfunding portals also exist. These are Commodities Investment Portals which focus on Crowdfunding strictly Agricultural and Agro-allied businesses which can raise a total of 1 Billion Naira ($2,000,000.00) in a year. A good example of a Commodities Investment Portal in Nigeria is FarmCrowdy.

Payment Solution Service Provider (PSSP) Apps

A PSSP is simply a Digital payment intermediary acting as a link between merchants and branches. Two good and popular examples of a PSSP in Nigeria are Flutterwave and Paystack.  An application for a PSSP license to the Central Bank of Nigeria requires minimum share capital of 100 million Naira ($ 200,000.00) .

Mobile Money Operator Apps

A Mobile Money Operator (MMO) is a licensed service provider that develops and renders financial services through mobile telecommunications networks and mobile phones. A good example of an MMO would be Paga,MoMo or Opay.

An MMO license application to the CBN requires a minimum capital of 2 Billion Naira ($4 million) .

Switching and Processing Apps

Switching and Processing services involve the rendering of value exchange between Financial service providers, merchants, customers and other stakeholders, connecting payment transactions between multiple acquirers & payment service providers. A good example of a Payment and Switching company is Interswitch.

A Switching and Processing license application requires a minimum share capital of 2 Billion Naira ( $ 4million).

Digital Banking licenses

This branch of Fintech is just about running a full fledged bank but completely online. They largely or totally deliver non-physical banking services (taking cash deposits from customers, opening and operating bank accounts for its customers, giving loans etc.) through Digital platforms such as Apps or Virtual Chatbots operating 24 hours a day.

Most of the digital banks in Nigeria today operate with a microfinance bank license. Key examples are Kuda and Fairmoney MFBs. However there is also one popular full commercial digital bank. It is ALAT Digital Banking platform.

Commercial and Microfinance Bank License Cost

National Commercial Banking license applications require a minimum share capital of 25 Billion Naira ($50million).

Regional Commercial Banking license applications require a minimum share capital of 15 Billion Naira ( $30 million).

National Microfinance license applications require a minimum share capital of 5 Billion Naira ($10 million) while State Microfinance license applications require a minimum share capital of 1Billion Naira ($2million)

National and Regional Mortgage Bank license applications require a minimum share capital of 13Billion Naira($26million)  and 5Billion Naira($10million) respectively.

Merchant Bank license applications require a minimum share capital of 15Billion Naira($30 million).

National and Regional Non-Interest banking licenses require a minimum share capital of 10Billion Naira( $20million) and 5 Billion Naira($10million ) respectively.

Insurtech licenses

Insurtech, a merger of the words ‘Insurance’ and ‘Technology’. It refers to the use of technology to aid the efficiency of current Insurance operation models. Examples of Insurtech companies in Nigeria include Curacel, Tangerine Life, Casava and AutoGenius.

Licensing in the insurance industry is under the Insurance Act 2003 through the National Insurance Commission.

The minimum capital requirement for Unit Microinsurers is 40million Naira ($80,000.00). While that of State Microinsurers is 100 million Naira ($200,000.00). The minimum capital requirement for National Microinsurers is 600million Naira ( $1.2 million).

For Life Insurance companies the minimum capital requirement is 8Billion Naira ($16 million).

For General Insurance companies, it is 10Billion Naira ( $20 million).

Is Starting a FinTech Company in Nigeria Profitable?

I will be surprised if this question has not been in your mind about how to start a fintech company in Nigeria. And it is perfectly understandable if you have been thinking about it. After all, the fintech ecosystem is arguably the hottest in Africa right now. It has the highest number of players who all seem to be doing so well. But are they really doing well? Fintech is also attracting the most funding from both local and international venture capitalists. Why are so many people investing massively into this sector?


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My thinking is that an average young Nigerian wants to venture into Fintech but they will want this question sorted first. So the question now is – is fintech in Nigeria and indeed Africa really as profitable as it seems?

The Answer is Yes

The first thing I will point you to in order to backup that is InterSwitch and Flutterwave. Oh, I forgot, did you remember how much those two guys pocketed for selling PayStack 2 years ago?

But more than that, the African fintech ecosystem is a pretty large playing field.  According to The World Bank, about 66% of the population in Sub Saharan Africa are unbanked. Apparently, this is a major problem. But it is also an amazing opportunity. An opportunity that has given big businesses to the likes of Renmoney, Kuda Bank and others.

To give a better perspective to it I also refer you to a recent report by multinational professional services firm, Ernst & Young. The report showed that 75% of Nigerian fintech startups earn an average of $5 million annually. The report also explained that even though the startup ecosystem in Africa’s largest economy is quite nascent compared to what obtains elsewhere in the world, it is maturing at an exponentially high pace and this is reflected in its profitability and other metrics.

If you can design a good product that solves peoples problems profit will not be your problem at all.

How to Start a Fintech Company In Nigeria

To start a fin-tech company in Nigeria, here are quick steps to guide you below:

STEP 1: Identify your Niche

If you are thinking of how to start a fintech company in Nigeria, the first step is to decide on the niche you wish to focus on.

There are numerous dimensions in Fintech to consider, here are some of them:

  • Quick and short term loan scheme
  • Daily, weekly or monthly saving scheme
  • Fund Placement, or the financing of planned or unplanned financial regulations.
  • Data Management, to enable improved decision making.
  • Crowdfunding scheme
  • Investment scheme
  • Payments and international money transfers
  • Mobile banking
  • Insuretech
  • Fnancial products for small business (e.g. accounting or tax services)
  • Data analysis and financial decision making
  • Cryptocurrencies and blockchain-based solutions

Before you make a move to start a fintech company in Nigeria, you need to be very clear on the problem you want to solve. You must be sure of the market or demography to target. You also need to decide if your service is going to be location bound. Maybe for a particular state, region or the whole country. And of course, you can equally target a global audience. It all depends on how far you can see from where you are.

But even though I encourage you to dream big, yet it is wise to start small and grow from there. Start by targeting a given small location and as you see encouraging results you begin to expand. With time you will have a product for the global market.

STEP 2: Find out the Regulations

I think this is perhaps the major work and why not every software developer is into FinTech already. The entry barrier into financial service sector is high because of the regulations that apply. So as a prospective FinTech Company in Nigeria you need to find out who regulates it.And I tell you the truth, it is not just one regulator that is involved here. The various aspects of it is regulated by different agencies. But of course it is a positive thing that there are regulators. Without such regulations fraud and scam will be on the increase.

So this is an important step on how to start a fintech company in Nigeria.

STEP 3: Define the Innovation You are Bringing

Another important step on how to start a fintech company in Nigeria is to define the innovation you are bringing. What is your competitive advantage? What will you do differently from all the already existing fintech companies in Nigeria?

There are 200 standalone FinTechs in Nigeria as e speak today. Each of these Fintechs have their focus or service offering. The question  for you that wants to start your own Fintech company in Nigeria today is ‘what are you going to do differently”. Your innovative and creative mind has to come into play here. You need to study what others are doing very carefully and see where the gap exists.

The biggest lesson I learnt from the story of how MTN became more valuable than all the banks and insurance companies in Nigeria combined is that if you provide  service or product that fills a gap and meet peoples need you have a sustainable business that can make you blow for life. Even if you want to start exactly the same thing another FinTech is already doing, just ask yourself how you can make it better. Remember that innovation is also about looking for ways to improve what is already in existence.

For example, the founder of Selar  was a former staff of PayStack. As a staff with PayStack he listened to the requests of customers and intending customers. And one major request that kept reoccurring was that freelancers and other individual business owners wanted to create accounts to receive payments for the sales they make online.  But PayStack only deal with registered companies. Boom! That was all the guy needed to start Selar. He saw a gap and fixed it and today he is growing at the speed of light.

Once again if you are looking for how to start your own fintech company in Nigeria look for the gap.

STEP 4: Prepare a Business Plan

The 4th step on how to start your own fintech company in Nigeria is to develop a business plan.

Mitchell Elegbe needed 200 million naira to start InterSwitch as far back as 2002. But the huge startup capital did not discourage him. Do you know why? He had a business plan. He has sat down and ran his numbers, he had a projection for the net 10 years. It was possible to tell how 200 million naira will become 1 billion dollars in jut 10 years. So it was an easy decision for 4 big banks in Nigeria torise up and buy into the idea.

I will keep advocating for this, before you start any business that you plan to take far, sit down and do a good business plan for it. And if you don’t know how to do a bankable business plan, get a professional to help out. The business plan will help you to understand on paper what it takes to start the business. It will help you state clearly your vision for all to see. And most importantly it will help you secure funding when you need one.

STEP 5: Register Your Business

Any individual, local or foreign company wishing to start a business in Nigeria must have to register the business with CAC for  it to have a legal identity. Of course, Fintech company in Nigeria is not an exception so make sure you register it. You can choose to register your business as an enterprise or as a limited liability company.

If you want to register it as an enterprise otherwise known as business name then it is something you can do on your own. Simply go to the CAC website and do a name search. Once you confirm that the name is available you go ahead and fill the application form.

However, if it is a limited liability company that you want to register, then you may need to use any of the CAC agents.

STEP 6: Obtain the Required License

The license you will need depends on the aspect of FinTech you plan to concentrate on. Remember I earlier told you in step 2 above that there are many regulators in the industry.  For example you may wish to focus on insurance aspect, loan aspect, savings aspect or savings/payment and so on.

The Central Bank of Nigeria as of late presented a licensing regime called Payment Service Providers required by FinTech’s to work in the e-payment space. There are other regulators. So depending on your focus, make sure you get the necessary license.

Step 7. Choose the tech stack

Custom software development is a must for heavy-weight fintech products. You can’t rely on third-party CMSs or frameworks to handle all the transactions. Plus, you will need the performance no ready-made solution can provide.

The tech stack that most software providers use for fintech app development include the following:

Programming languages:

  • C/C++,
  • Python,
  • Javascript,
  • Java, and
  • Ruby.


  • Node.js,
  • React,
  • Django,and
  • Spring.


  • MySQL,
  • MongoDB,
  • Redis, and
  • PostgreSQL.

Step 8. Get funded

There are multiple ways to get money for your startup: from bootstrapping to bank loans, from crowdsourcing to venture capital, etc. You can even enter a startup competition or get money from your family or friends.

Regardless of the path you choose, it would be nice to have something to show to your potential investors. Thus, building a visual prototype is a great way to prepare a powerful pitch deck that can get you funded

Step 9. Build and improve

As soon as you get all of the above-listed aspects of building a fintech startup, you are good to go with the development. However, we strongly recommend starting with the minimum viable product (MVP) first.

Build the minimum required scope of features to try the waters and test the idea, collect users’ feedback and improve. There are many pitfalls you need to avoid when building an MVP. Yet, starting small and growing your product, later on, is a smart way to reduce the potential risks, especially in such a saturated and competitive market as fintech.

Advantages of Starting a Fintech Company in Nigeria

This year has been turbulent for businesses across numerous industries. Many entrepreneurs choose to wait the pandemic out before taking on new ventures, and this decision is sound for many fields except finances. In money management technology, demand and prospective benefits have only been growing.

Let’s take a look at several reasons why it is the best time to start a fintech company.

1. Demand

The modern electronic finances industry presents solutions that more and more people find extremely useful. Personal money management applications, insurance technology, and easy investment—fintech has gathered every niche imaginable under its umbrella, and this bubble keeps expanding. Users want to feel in control of their finances, and they want to do it through a sleek all-in-one interface that’s always in their pocket.

Launching a fintech company now means responding to the pressing needs of millions of potential users and getting the attention startups rarely receive on other markets.

2. Expertise

Building a fintech app will also be easier these days. Developers gain more expertise in designing this kind of software, and more specialized toolkits to integrate third-party products are released regularly. Programmers can also seek advice from fintech consulting services to get an idea of the inner workings of financial systems.

Furthermore, banks and governmental institutions in most countries support the digitalization of the finance industry and have gradually started tailoring their services and activities to help fintech businesses prosper.

3. Insurtech is getting immensely popular

Among the fintech applications, insurance technology is receiving a lot of interest for its data-driven predictive capabilities.

Insurtech uses artificial intelligence to process a person’s criminal and medical records whenever legally acceptable, as well as credit history, open social media information, and other factors to reduce the risks for companies and suggest the most cost-efficient options to customers.

4. Enterprise accounting

Starting a fintech company and focusing on businesses as your target audience is potentially an incredibly lucrative endeavor.

Enterprises have already made a huge shift towards online operations due to the COVID-19 pandemic, and the trend to rely on various technologies to boost operations is unlikely to die down. The niche of enterprise fintech software is highly competitive but also rewarding.

5. The rise of cryptocurrency

Digital currencies are no longer a buzzword—people trust decentralized applications to handle their money and seek the most convenient and reliable platforms to do so. Although the cryptocurrency market is overflowing with all kinds of trading and investment apps, none of them have 100% user satisfaction.

While it might be impossible for a fintech startup company to battle industry giants like Coinbase, a well-made, low-fee, sleek, and secure app can certainly attract users and help you gain customer loyalty.

Challenges of Starting a Fintech Company in Nigeria

  • The Entry barrier is high especially the cost of license
  • Lack of trust for online businesses
  • Chargebacks
  • Poor Infrastructural development
  • Competition
  • Regulators ignorance on Fintech trends
  • Online Fraud
  • So much cash in circulation

What to Avoid When Launching Your Fintech Startup

Before I let you go, let me warn. There are certain things you must avoid if you are thinking of how to start a fintech company in Nigeria.

Here are specific pitfalls to avoid on how to start a fintech company in Nigeria.

1. Overlooking the Actual Needs of Your Niche Market

Businesses are not built on opinions and instincts but on a pain point or specific need that you want to address. Thus before taking the first step into the financial technology industry, ensure to validate the need that you want to fulfill actually exists, and users are looking for a solution like the one you want to provide. Otherwise, your business is set to fail.

2. Getting Distracted

As mentioned above, fintech is an extensive technological domain filled with opportunities and new ideas. You must remain focused when you identify the niche and step into this industry. You should have a plan and follow through to the end.

3. Hiring Mediocre Employees

Your startup’s success is pegged on its founding team. However, finding the right team as a startup is not easy. You must invest and work with the right talents, which can be hard to find or expensive to hire and retain.

According to successful Fintech founders, startups should hire budget-friendly offshore software developers to work with their in-house team until a time when the entrepreneur can afford to pay the high salaried top financial app developers.

The offshore team, especially from more cost-effective locations, will form a strong founding team for your fintech startup.

4. Concentrating on the Product Over the Customer

You are building for the customer and not for the fun of it. Most entrepreneurs especially tech entrepreneurs make this mistake often. They want to build an amazing product without taking the time to check if it meets the customers need. If you have 10 hours in a day to build, spend 3 hours building. The other 7 hours should go into getting customers feedback.

Conclusion on How to Start a FinTech Company in Nigeria

As you can see launching a fintech startup is not rocket science. Others have done it and you too can. Those that did it are not smarter than you. And guess what? It is not more difficult than the things you have been able to do in the past.

But hey – it is also not beans and bread. There is no single formula that guarantees you 100% success. However, in my opinion your ability to think deep and spot a gap and put in the necessary work will increase your chances.

Don’t go against any of the rules – government may actually be stronger than you know. And also make sure you have a detailed business plan before you start.

If you have any questions, please feel free to ask me.

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