Cowrywise, Sycamore lead fintech push into stock trading

Until recently, Eboseremen Ailenotor, 27, had never invested directly in Nigeria’s stock market. But when Cowrywise introduced a waitlist for a new app that would give users access to the Nigerian Exchange, she signed up immediately.

“I have been saving on Cowrywise since 2019, so when I saw their email about a new investment app, I gladly joined,” she said.

The savings platform, which has about 800,000 users, said over 12,000 people have already joined the waitlist for its investment product in less than a week.

After opening up access to savings, lending, and real-time payments, financial technology (fintech) companies are now shifting their focus to the capital markets. With new investment arms, they seek to challenge a sector long dominated by traditional stockbrokers.

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From Sycamore to Cowrywise, these platforms are hoping to carve out a stake in Nigeria’s capital market, which currently boasts a market capitalisation of N75.83 trillion. Already, Nigeria is recording a rise in the number of digital-first brokerage firms at the Nigerian Exchange Limited (NGX), fuelled by the increasing number of young investors.

According to a BusinessDay report, only five firms accounted for about 70 percent (105,442) of the 151,749 new accounts created as of May 2025. These firms include Bamboo (via Lambeth Capital) (with 47,988), Afrinvest Securities (34,473), Meristem Stockbrokers (9,041), FSL Securities (7,237), and Coronation Securities (6,703).

“In Nigeria, 74 percent of the population is under 24 years. This demographic requires us to digitise our processes and engage them through technology they understand, like apps and digital platforms. We must adapt to their world to bring them into the investment market,” said Emomotimi Agama, director-general, Securities and Exchange Commission (SEC).

“Our goal is to reach millions, not just a few hundred investors. Our mission is to achieve a $1 trillion economy, as mandated by President Bola Ahmed Tinubu. We all have a role to play in reaching this goal, and with this new platform, we’re on the right path.”

According to Oluwagbenga Magbagbeola, managing director of Sycamore Investment and Asset Management, the new investment arm of Sycamore, the company’s expansion into regulated asset management is a direct response to growing customer demand.

Sycamore, which has been active in the lending space since 2019 and has nearly 300,000 users, said its decision to branch out came after users expressed interest in more comprehensive ways to grow and protect their wealth.

“The market timing couldn’t be better. Nigeria’s economic landscape has undergone significant changes, with persistent inflation and currency volatility creating an urgent need for sophisticated investment solutions that preserve value while generating returns. Traditional banks aren’t adequately addressing these challenges for everyday Nigerians, creating a significant opportunity gap,” said Magbagbeola.

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For Cowrywise, the 15 percent historical average return of the NGX over the past decade presents a compelling case for investors, especially when compared to savings accounts, which typically yield between 2 and 5 percent annually, far below the average inflation rate of 18 to 22 percent.

“If you had invested in GTCO stock in June 2019 and held until June 2024, your investment would have grown by over 130 percent, excluding dividends. In contrast, money left in a regular savings account would have lost real value due to inflation,” the savings platform said in a notice to customers.

Beyond this, fintechs also scale retail investments, according to Magbagbeola. “Traditional minimum investment thresholds of N100,000 to N500,000 immediately exclude most Nigerians. Technology now enables fractional and micro-investments, allowing people to start with as little as N8,000, which significantly expands the potential investor base,” he said.

This is something management of the NGX is aware of, as they recently launched NGX Invest, an e-offering platform to improve the flow of capital between investors and financial markets. “Our digital product can distribute various services,” said Temi Popoola, group managing director, Nigerian Exchange Group Plc.

As digital platforms push new frontiers, the battle between traditional and digital investment providers will likely centre on accessibility, personalisation, and user experience, according to Magbagbeola.

According to him, traditional asset managers bring deep market expertise and robust risk frameworks but often struggle with digital transformation and remain inaccessible to most Nigerians due to high investment thresholds.

“Conversely, fintechs excel at creating intuitive user experiences and lowering barriers to entry but sometimes lack the institutional knowledge and compliance infrastructure needed for sophisticated financial services,” he said.

“The winners in this converging landscape will be those who successfully combine institutional-grade investment capabilities with fintech’s accessibility and user-centricity.”

While many of Nigeria’s over 400 fintechs already offer access to foreign stocks, attention is now shifting to the domestic market. “Technology is fundamentally transforming every dimension of asset management, shifting it from a service exclusive to a select few to a scalable platform accessible to millions,” added Magbagbeola.