A fintech researcher, Vincent Edra, has identified privacy concerns, online scams and poor dispute resolution as major reasons many Nigerians remain reluctant to embrace financial technology.
Edra said on Wednesday in Abuja that some digital lending platforms illegally accessed borrowers’ personal data to recover loans, undermining public trust in digital financial services.
He said the data breaches had made some Nigerians wary of fintech platforms and reluctant to take advantage of the convenience offered by digital financial services.
According to him, the early 2020s witnessed an explosion of digital loan applications offering instant loans of between N5,000 and N10,000 to Nigerians.
He said many of the platforms demanded access to users’ contacts, SMS messages and photographs, ostensibly for risk assessment and debt recovery.
Edra said the data was sometimes weaponised against borrowers who defaulted, with lenders sending messages to their contacts to publicly shame them.
“This triggered widespread complaints and regulatory crackdowns, effectively killing the model,” he said.
He said the failure was structural because the affected platforms treated trust as something to exploit rather than something to earn.
Edra further disclosed that research showed that fear of online scams and institutional failure had strong negative relationships with fintech adoption.
He said only 40 per cent of respondents trusted fintech security measures, while 72 per cent anticipated financial losses arising from institutional failure.
“The model was built on data extraction, not user confidence,” he said.
The researcher said building trust among mass-market users required operational consistency, transparency and visible mechanisms for resolving problems when digital services failed.
He identified reliability during service failures as the defining test of trust, noting that users often judge digital platforms by how they respond when transactions go wrong.
Edra said industry leaders rated Nigeria’s digital finance trust resilience at 5.4 out of 10, with transaction failures and poor dispute resolution identified as major factors undermining trust.
He therefore urged fintech companies to demonstrate transparency through practices that enable users to see and understand how their money is handled.
Edra cited PiggyVest’s digitisation of the traditional “kolo” savings culture, including the display of daily interest earned, as an example of making digital financial outcomes tangible.
He also cited OPay’s cashback incentives, competitive fees and emphasis on ensuring funds arrived when promised as factors that helped build customer confidence.
“Trust is earned transaction by transaction, through consistent delivery and fair recourse when things go wrong,” he said.
He urged fintech companies seeking mass-market adoption to design services around the realities of users who remain heavily dependent on cash.
The researcher cited Smartsave, which allows cash-dependent Nigerians to make physical deposits through trained officers who record transactions instantly, providing users with a verifiable entry point into digital finance.
He said the broader lesson was that convenience alone could not sustain digital adoption where users lacked confidence in the systems serving them.
“In a low-trust environment, convenience without reliability accelerates distrust,” he said.
