Prior to this time, cash transfer was a significant challenge to effect distant transactions in the shortest possible time, much more when it had to do with trading offshore.
However, internet banking and flexible payment options have become readily available with the advancement of technology. The advent of FinTech (Financial Technology) companies in Nigeria has saved the rigor of excessive bureaucracy and needless trading crudeness.
Despite the numerous advantages of trading through FinTech companies and the lucrative opportunity it offers, many have not considered investing in FinTech. Although few FinTech companies are run in Nigeria, there is still a free niche to be pitched.
A FinTech company is a profit-oriented organization that mediates between two parties delivering financial (payment) services utilizing the internet and technology. Flutterwave, Piggyvest, etc., are examples of FinTech companies.
Now, how does one establish a FinTech company in Nigeria without much ado? It is essential to first recognize the regulatory body in charge of FinTech in Nigeria; the Central Bank of Nigeria (CBN) is the magisterial institution solely responsible for the issuance of licenses upon successful application and necessary documentation.
Within three months of processing the application, the company must be registered with the Corporate Affairs Commission (CAC) with a restrictive Memorandum and Article of Association.
However, the type of license issued depends on the choice of operation or service; this implies that a FinTech company can either be one of the three subcategories of electronic banking; a Digital Bank, a Payment Service Provider, or a Payment Service Bank.
The desired category must be stated on the application. In addition, the Submission of the application to CBN warrants an application fee of five hundred thousand Naira and a final license application fee of two million Naira.
The following must be provided to the CBN on demand as part of the registration requirement;
- A proposed name for the company (an alternative name must be included)
- The physical location of the company
- The maximum share capital authorized for the company
- Official documents of the company’s board members and shareholders
- Detailed information about the shareholding structure
- The objectives, goals, and aspirations of the company
- A valid means of identification of the board members and shareholders
Starting up a FinTech company may be capital intensive, but the pool of customers and financial service demand decrease the payback period with a relatively high turnover, making the FinTech company a viable and lucrative business to start up.
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Photo by Edi Kurniawan
