Nigerian Stocks Fintech Success

Two Nigerian stocks that transformed into fintech providers are among the hottest in the market this year. Chams has surged over 800%, topping Nigeria’s 151-member all-share index, while Computer Warehouse Group has rallied nearly sevenfold, claiming the number-four spot. Their success highlights the potential within a country with low bank branch densities and a sizable unbanked population. These companies, now popular among young Nigerian investors, are capitalizing on this shift in focus.

Chams, established in 1985, was previously recognized for identity verification products. However, since 2020, it’s shifted to fintech, obtaining licenses and focusing on mobile payment platforms and smartcards for banks. According to CEO Mayowa Olaniyan, the business model has completely transformed.

Similarly, Computer Warehouse Group, in operation since 1992, launched Fifthlab in 2022. This unit specializes in mobile money, billing, and payment platforms, experiencing rapid growth, according to CEO Adewale Adeyipo.

Nigeria, with a large unbanked population (about 45% of adults), has seen a surge in fintech interest, particularly due to smartphone popularity and the pandemic-induced bank branch closures. Fintechs like Interswitch, Flutterwave, and Jumia Technologies have achieved billion-dollar valuations, reflecting the enthusiasm in the African mobile money space.

However, despite their market success, Chams and Computer Warehouse, valued at about $11 million and $19 million respectively on the Lagos bourse, remain relatively small. Analysts caution that while their tech appeal attracts investors, sustained growth will ultimately hinge on their earnings and dividend payouts, shaping investor reactions in the long term.