Platforms Give Nigerians Access to Less Volatile Foreign Investments

African FinTech platforms that connect investors to international markets are on the rise.

Leading the charge are a handful of Nigerian startups that have built apps that allow retail investors to access stock markets and foreign asset classes in markets like the U.S. and elsewhere.

Bamboo, Chaka, Trove and Rise Vest have all emerged from the West African country in recent years, promising to help Nigerians access cross-border investment opportunities as a way to hedge against exchange rate volatility and inflation.

As Tony Odiba, Rise Vest’s co-founder and product lead, told PYMNTS in an interview, Nigeria’s macroeconomic situation has presented a challenge to investors who are limited to high-risk, Naira-based assets. And even if these performed well, “real returns were abysmal because of the inflation rate,” he explained.

Describing the firm’s vision, Odiba said that the Rise Vest platform started off helping customers invest in equity and real estate. The company has since grown to cover a range of asset classes, evolving into a digital platform that combines financial management with advisory services.

For another Nigerian investment platform, Trove, the basic model is similar to well-known investment and trading apps like Robin Hood, which allows users to access fractional shares, with Trove acting as an intermediary enabling the transactions.

Breaking away from the Robin Hood-type model, Bamboo has taken a more curatorial approach and selects only a handful of investment opportunities to present to customers, filtering out high-risk stocks.

And like Bamboo, Rise Vest’s approach is more about curation and catering to consumers who aren’t necessarily experienced investors.

As Odiba emphasized, many Rise Vest users are simply ordinary Nigerians looking for a return on their savings, which is why the firm has focused on dollar-denominated assets with relatively predictable returns.

“We weren’t looking for anything crazy, just something stable, where your money could appreciate over time,” he said.

To create such an opportunity, Rise Vest allows users to choose between stocks, real estate, or a combination of both, but the fine-tuning of the portfolio is left to investment professionals, who select the individual opportunities as well as if and when to sell.

“We do the management [and] essentially you get exposure to all these companies in different locations based on […] our own management thesis,” Odiba explained.

Challenges For Africa’s Inflationary Economies

While Nigeria is a hotbed for FinTech innovation, the challenge of depreciating currencies and limited access to dollar-based investments is one that other African countries face, too.

Pointing to similar macroeconomic environments across the continent, Odiba said that Rise Vest is currently weighing up its geographic expansion options.

“A lot of Africans would like to get some exposure to markets or to asset classes [and] investments that are consistent and have a strong underlying currency,” he said, adding that adapting the model to other African markets would have to take into account challenges on the ground, such as different payment preferences.

Opportunities in other African markets haven’t been lost on Rise Vest’s Nigerian peers either. For example, Bamboo officially launched in Ghana in September, which happens to be one of the markets Rise Vest is eying up.

Beyond regional expansion, the success of Nigeria’s investment apps will be their ability to empower users with a clear and intuitive interface.

As such, Odiba said that “right now, what we’re doing is trying to fashion a product that has less friction in getting the users from where they are to where they want to be [in] their investment journey.”

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