For decades now, one of Nigeria’s major problems is high unemployment rate. Although, Nigeria is regarded as the most populated country in Africa[1] and endowed with enormous potentials, resources and able manpower, sadly, the country is at forefront of the unemployment narrative. Statistics show that unemployment rate in Nigeria is fast growing and it estimated to reach 32.5 percent in 2021 and the figure is projected to increase further in 2022[2].

This essay seeks to discuss how fintech innovations can curb the high unemployment rate in Nigeria, the role of financing in supporting fintech innovations and recommendations.


Fintech (or financial technology) refers to the incorporation of technology into the delivery of financial services.

The advent of fintech has strongly stimulated entrepreneurship and self-employment in the significant informal sector by providing 92%[3] of jobs in a context of underemployment and unemployment. Platforms like Upwork, Fiverr and Jiji have enabled youth to harness their potentials to offer freelance services remotely. Fintech has also given room for employment opportunities through the establishment of brand likes of Flutter-wave, Pay-stack, and Piggy vest, which are some of the top fintech companies in Nigeria.[4] These companies have grown rapidly within a few years, and because of their vast involvement in the daily financial industry, they have employed more youths than many pre-existing companies, thereby reducing the rate of unemployment in Nigeria.

Today, mobile money and Point of Sale (POS) terminals are being used to deliver financial services, and this provides people and businesses with various forms of income and liquidity support,[5] solving the problems of frequent disruptions in banking networks and long queues in banking halls.

Likewise, blockchain technology has created avenues to generate income as traditional jobs steadily become outdated. Cryptocurrency helps to tackle numerous challenges faced by many Nigerians in international trade and as a result, helps the unemployed facilitate small-scale international trade.[6]


Innovations put together with funds drives productivity and economic growth. Some of these financing options are highlighted below.

  1. EQUITY FINANCING[7]: This means exchanging a portion of ownership of the business for financial investment in the business.[8] Investors are issued shares in return for funds by a way of dividends in order to support the business operations and it is essentially important at the early stage of the startup. These shares can either be ordinary shares or preference shares.[9] Equity allows investors to share in the company’s profit. A company may use funds from investors when it begins its business operations to cover the startup costs and then use the cash flow from its operations to grow the company.[10] Most importantly, investors do not expect an immediate return of their shares until the company is financially healthy, this allows the company to plough back profits for its expansion.

Equity can also be gotten by startup owners by pitching of ideas through competitions to interested audience for an eventual investment. For instance, Hackathons have played an important role in the Nigeria’s fintech world; Hackathons are idea innovation contests that bring together tech talent to compete on solving business problems through technology[11]

  1. DEBT FINANCING[12]: This involves borrowing of funds from creditors with a stipulated period. A fintech company can generate funds through bonds and debentures. Debt financing provides timely assistance to businesses by providing funds when needed and can be increased according to the needs of the business. For instance, debentures allow a company to take a loan and secure it with the company’s assets. Also, interest payable in debenture can be deducted from the total profit of the company and thus, helps to reduce the tax burden of the company.[13] Similarly, when investors buy a company’s bonds, they are loaning money to the company in exchange for interest and principal at maturity.[14]
  2. CROWDFUNDING: A number of people can contribute, lend and invest in a startup company. Crowdfunding is the utilization of small amounts of capital from a large number of persons to finance a new business venture or enterprise. The goal of the crowdfunding and appropriation of funds must be clearly stated and defined.


  1. LEGAL REGULATORY FRAMEWORK: Laws and policies should be enacted to support fintech startups in Nigeria such that they will be entitled to certain benefits like loans and tax reliefs. For instance, the proposed law can mandate all commercial banks in Nigeria to ensure that all loans granted to startup companies in the fintech sector be payable for a minimum of 5 years. This will enable fintech companies to focus on their business, make profits and pay back loans conveniently. Also, fintech companies within the first three years of incorporation should be entitled to loans and tax reliefs from the Federal Government. The Government can create a fund for fintech companies, managed by the Central Bank of Nigeria, such that fintech companies can apply for loans that will be paid over a long period with lower interest rates.
  2. JOINT VENTURES: Fintech startups in Nigeria should embrace joint ventures in order to collaborate with entities with similar business ideas and attract the significant funding they require. This is because fintech companies often require huge capital and human resources to execute their ideas.
  3. MASS AWARENESS: Government and stakeholders in the fintech sector should sensitize the public on the importance of technology in finance and how it can successfully create employment opportunities. Moreover, they should ensure financial inclusion for all by putting structures in place to facilitate active participation of people in the finance sector.


Adoption of fintech is the existing trend in the financial ecosystem, it is propitious that Nigeria has joined the trend, to further ensure our involvement and ultimately decrease the rate of unemployment, it is important to provide resources, funds and enabling environment where the use of such innovations would be encouraged.

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[1] Worldometer. (2020). African Countries by population (2021). United Nations. Department of Academic and Social Affairs. Population Division. accessed on August 17th, 2021

[2] Varella. S.V. (2021). Forecasted unemployment rate in Nigeria 2021-2022. Statista. accessed on 17th August, 2021


[3] (2021). Africa’s Development Dynamics 2021: Digital Transformation for Quality jobs. OCEDiLibrary.  accessed 17th August, 2021; it was further stated that the mobile ecosystem already employs 200 000 people formally and 800 000 informally and contributes 3.5% to the gross domestic product (GDP)


[4] Emeh. (2021). Top 10 best FinTech companies in Nigeria. Clacified. for example, Software Developers, Project Managers. accessed on 17th August, 2021; for example, Software Developers, Project Managers.

[5] Sahay. R.S., Lahreche. A.L., Khera. P.K., Ogawa. S.O., Bazarbash. M.B., Allmen, U.E.V. and Beaton. K.M. (2020). The Promise of Fintech Financial Inclusion in the Post COVID-19 Era. NO. 20/09. International Monetary Fund, Publication Services, Washington DC, USA. accessed on 18th August, 2021

[6] Adesina. O.A. (2021). How Crypto can curb Nigeria’s high unemployment rate. Nairametrics. accessed on 17thAugust, 2021

[7] An example of equity financing is USD $170 million secured by flutter wave on 10th March to finance its operations last accessed 19th August, 2021

[8] Ag Decision Maker. (2013). Types and Sources of Fintech for Start-up Businesses. File C5-92, Iowa State University Extension and Outreach. Washinton, DC accessed on 19th August, 2021


[9] Ordinary Shares have ownership with the company based on the number of shares they owned while Preference Shares have a priority claim over the company’s assets and earning. Preference Shares enjoy priority before Ordinary Shares in the payment of profits and dividends.

[10] Fong. S.F. Equity Financing and Debt Financing; Typical Uses for Debt and Equity Financing. accessed 19th August, 2021


[11]Fintech and Financial Development in Nigeria. (2020). Proshare Intelligent Investing.  accessed on 19th August, 2021

[12] Nigeria Fintech startup Aella credit raised US $10 million debt financing round to launch new products and expand into additional market accessed on 19th August, 2021

[13] Sources of Financing. Debentures. Advantages of Debentures. accessed on 17th August, 2021

[14] McCamish. B.M. (2021). Bond. accessed on 21st August, 2021