The Case of Digital Financial Services in the Developing World: A Fintech Perspective on the Future Nigerian Mobile Money Industry

Anna-Sophie Somo Watong & Dustin Onyeka Okwuagwu

Student thesis: Master thesis

Abstract

Mobile money has proven to be an effective tool for financial inclusion in many countries in SubSaharan Africa. In contrast to pioneers such as Kenya, Africa's largest country, Nigeria, has been lagging behind for a long time. However, shifts in external factors could dramatically alter this situation in the future. Fintechs played a particular role in Nigerian mobile money in the past and are seen as important enablers for mobile money adoption in the future. Due to external dynamics, however, the future overall market structure is highly uncertain. Therefore, the objective of this thesis is to identify the topics that will shape the Nigerian mobile money industry in the long term and deduce strategic implications for fintechs operating in the domestic market. To this end, the following research question is posed: "How might the macro- and meso-environment of the Nigerian mobile money industry change by 2035 and what are the implications for fintechs?" To answer this question, the authors applied strategic forecasting methods to conduct a Delphi-based scenario study. Specifically, four distinct future scenarios for the Nigerian mobile money industry were developed based on expert opinions on several external dimensions and assessed through interviews with representatives of leading Nigerian fintechs. As a result, this thesis identifies five key topics of the future external environment and four specific strategic implications for fintechs. The key topics include customer-centric product development, the creation of a collaborative ecosystem, the relevance of a digital society, the increasingly critical role of regulators, and the high level of market volatility in the future Nigerian mobile money space. Four strategic implications for fintechs emerge from these determining factors that involve using technology as the key enabler for customer-centric product development, building meaningful strategic partnerships, leveraging the existing network, and creating an agile internal organizational structure. Finally, apart from a particularly stringent regulatory context in Nigeria, the remaining four key topics proved to be transferable to a broader context and thus applicable to the industry environment in other proximate developing markets

EducationsMSc in Finance and Strategic Management, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2021
Number of pages183
SupervisorsAbayomi Baiyere