Business News

Why most Nigerian fintechs may never become profitable – Mitchell Elegbe 

The founder/Group CEO of Interswitch, Mr. Mitchell Elegbe has said that most fintech businesses in Nigeria may never become profitable because they started on the wrong footing by providing some services for free. 

Elegbe stated this on Saturday during the 4th edition of the Doing Business in Nigeria Conference (DNBC) in Lagos. According to him, the idea of using free services to win market share will be the bane of many fintechs because they would not be able to monetize the same services later.   

Highlighting the peculiarities of running a business in Nigeria during his keynote presentation at the Conference, the Interswitch MD said getting to profitability should be the most important thing for every business. Addressing the gathering of young businessmen and women from across Nigeria, Elegbe said: 

He also advised business owners to go beyond their formal education and learn from the ‘streets.’ According to him, the study of the streets would help business owners understand the behaviors of their customers.  

Elegbe said many Nigerian startups are failing because they rely heavily on fundraising without considering the peculiarities of their operating environment. According to him, startups in Nigeria are in the Tropical Savanah and should not compare themselves with those in Silicon Valley.  

While noting that the current funding slowdown is affecting a lot of companies that had hoped to continue to raise funds, Elegbe said he got wind of what was to come two years ago when he was traveling around the world looking for investors.  

This year’s edition of the Doing Business in Nigeria Conference (DNBC) was themed, ‘Sustainable Transformations: Innovating for Growth.’

According to the convener of the conference, Linda Uneze the managing partner of Maurice Xandra Solutions, the platform was created to promote experience sharing among business professionals in a bid to equip potential investors and entrepreneurs.