GTCO’s HabariPay gets final approval from CBN to offer financial services

A few days after launching its fintech unit called SquadCo, Guaranty Trust Holding Company (GTCO), obtained final approval from the Central Bank of Nigeria (CBN) for its payment unit HabariPay Limited.

The bank, which recently transitioned through a holding company, is focusing on fintech to tap into Nigeria’s underserved market. HabariPay’s endorsement by the CBN means that one of the largest financial institutions in the country is partnering with fintech players to deepen financial inclusion in the country.

HabariPay offers a range of financial services complemented by other GTCO units. This is seen as a major boost to reduce the significant number of approximately 40 million unbanked and underserved people in Nigeria, which gives GTCO branches scattered across the country.

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“Payments is at the heart of the development of financial services globally and represents a key growth area for the group,” said CEO Segun Agbaje.

“With HabariPay, we have succeeded in creating another path towards improving the service experience for our customers and creating more value for our stakeholders.”

Nigeria is experiencing a boom in the emerging fintech market that is increasingly attracting billions of dollars in investment. As the boom threatens traditional financial institutions, banks are jumping on the fintech bandwagon. Besides GTCO, Access Bank is another traditional institution in Nigeria that has become a holding company as Sterling Bank is following the same path.

GTCO’s determination to diversify its financial operations is also evident in its recent takeover of Investment One Funds Management Limited and Investment One Pension Managers Limited in February. However, the company’s focus remains on fintech.

“Our vision is an Africa where every payment is digital, and we hope to achieve this by increasingly leveraging technology to improve access to financial services for individuals and empower businesses across Africa with the right tools. to thrive,” said Agbaje.

Is Nigeria’s Digital Payments Space Saturated?

Despite the financial inclusion gap, there are fears that there are too many digital payment companies in Nigeria. Recently, major telecommunications companies in Nigeria, Airtel and MTN, were granted licenses to operate payment service banks (PSBs), a development seen as the ultimate boost to the push for financial inclusion.

Telecom operators’ dive into financial services adds to the hundreds of fintech startups in Nigeria, led by Flutterwave, that are trying to solve the same problem.

However, compared to countries where there is financial inclusion, the digital payment market in Nigeria is still untapped considering its population. For example, in the US there are 8,775 fintech startups serving its 334.6 million people while the UK has 1,600 fintech startups serving its 68.5 million people. India, a country with a financial inclusion deficit similar to Nigeria, has 6,636 fintech startups for its 1.4 billion people. Similarly, Brazil has 1,446 fintech startups for its 215 million inhabitants.

Nigeria is said to have around 200 fintech startups, serving its more than 200 million people. That leaves about a million people serving a fintech, which means Nigeria needs over a thousand fintech startups to fill the gap.

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