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Nigerian Banks’ Dominance of their Home Turf Makes Services Outdated

Largely protected by regulators from foreign competition, Nigerian lenders control 94% of their domestic market, by assets, the world’s largest share of local ownership. But the threat is now homegrown. Nigerian banks are only now starting to counter the emerging fintech firms riding the online wave spurred by the pandemic. As they set out their mobile money ambitions, they’re deploying their political muscle with regulators to bolster the moat around their franchises. The simmering conflict broke into the open this month when lenders kicked MTN Group, Africa’s largest mobile phone company, off their shared platform, protesting a cut by the telecoms provider on commissions charged on banking channels by almost half to 2.5%. Regulators intervened to reconnect MTN customers, while reinstating the 4.5% commission for the purchase of airtime bought via the banks. The sparring means the 60 million people in Africa’s largest economy who lack access to any banking services risk missing out on all the benefits of the fintech boom that has put much of Africa at the cutting edge of the revolution in mobile money.