"Two prominent players in the Point-of-Sale market are strategically broadening their presence in the financial services sector to strengthen their position following the challenges posed by the scarcity of cash. Moniepoint is venturing into the credit market by introducing loans aimed at supporting merchants. Concurrently, Opay has unveiled a corporate rebranding initiative. Moniepoint has also secured the role of headline sponsor for the BBNaija All Stars show.

Moniepoint has recently launched Working Capital Loans, a solution specifically designed to assist merchants in overcoming capital-related obstacles and sustaining the growth of their businesses. This announcement comes as more merchants are entering the realm of digital payments."

"According to experts, the surge in merchant adoption can be attributed to the Central Bank of Nigeria's (CBN) naira redesign policy. This policy led to a scarcity of physical currency across the nation, prompting mobile money and bank agents to raise their transaction fees. As a result, consumers shifted towards card payments, a service that merchants were keen to offer.

During the latter half of 2023, the number of merchants on the Moniepoint platform reached 1.3 million, constituting approximately 80 percent of the PoS businesses within the platform. Moniepoint's introduction of a credit product aims to extend merchants more comprehensive access to financial services beyond just PoS support. This credit offering, called Working Capital Loans, provides businesses with a line of credit proportionate to their capital or stake in the business.

These loans are of short to medium terms, requiring borrowers to repay within a window of 7 to 120 days, with the possibility of easy renewal in some cases.

The company stated, 'In this manner, any merchant conducting business through their Moniepoint account can access a line of credit based on the volume of business conducted through the Moniepoint account. The product has already gained significant adoption among various businesses including supermarkets and fuel stations, with no defaults reported thus far.'

In Nigeria, credit penetration, especially for small businesses, remains quite low, at around 5 percent. Fintech companies, like many other financial institutions, perceive this as an opportunity and are positioning themselves to address this gap.

With the Nigerian government's attempts to eliminate illegal lenders who exploit borrowers' vulnerabilities, there lies an opportunity for established fintech companies like Moniepoint to make a meaningful impact. Opay, on the other hand, recently announced its expansion plans.

Celebrating its fifth year anniversary, Opay unveiled a rebranding effort accompanied by a new logo. The company indicated that this transformation signifies the promise of a new phase featuring improved services, technological advancements, and a commitment to solidifying its position as Nigeria's most dependable financial platform. However, Opay has also witnessed the departure of its president, Olu Akanmu, who stepped down to pursue new endeavors.

These fintech companies are largely targeting small businesses, particularly small and medium-scale enterprises (SMEs). Traditional financial institutions often hesitate to engage with SMEs due to the perceived risks. Many small businesses still encounter difficulties in accessing finance, which is crucial for purchasing new equipment, driving product and service innovations, and expanding operations.

Tobi Amira, Vice President of Business Loans at Moniepoint, noted, 'We recognize that MSMEs are the backbone of African economies, and we continuously seek innovative ways to provide African businesses with solutions and tools that accelerate their growth.'

The company is willing to contribute a percentage of capital as a line of credit for the day-to-day operations of businesses on its platform. Amira shared, 'As of the end of June, we had disbursed $3.3 million, with a gross loan portfolio value of $2.4 million.' It is anticipated that the BBNaija All Stars show will attract thousands of new users to the platform. Fintech firms like Abeg App (now Piggyvest), which sponsored the show previously, experienced an influx of over one million new users.

The achievements of Moniepoint and Opay have made them targets for traditional banks that have been losing customers to these fintech companies. These banks are also increasing their investments in the fintech sector. Recent reports revealed that Access Bank is the largest shareholder in eTranzact, one of the initial fintech companies to be listed on the Nigerian stock market. The bank holds a 37.54 percent stake in eTranzact."