Nigerian fintech Sycamore, initially known for its peer-to-peer lending platform, is making a significant strategic shift into asset management after securing a crucial license from the country’s Securities and Exchange Commission (SEC). The move comes as Nigeria grapples with a deepening economic crisis, prompting businesses to adapt to the challenging environment.

Sycamore, which claims over N10 billion ($6.4 million) in assets under management, announced the SEC approval alongside the appointment of Oluwagbenga Magbagbeola, a capital markets veteran with 17 years of experience, as the head of its newly established asset management arm. Magbagbeola’s resume includes leadership roles at ARM Securities, FBNQuest Securities, and Profund Securities.

According to Sycamore’s CEO, Babatunde Akin-Moses, the SEC license marks a milestone in the company’s journey. “Securing our SEC license represents the culmination of years of building institutional-grade compliance systems that protect investor interests,” he stated. He believes Magbagbeola’s expertise, combined with the regulatory foundation, positions Sycamore to offer both performance and security to investors navigating the complexities of the Nigerian market.

Co-founder and Chief Commercial Officer Onyinye Okonji emphasized the rigorous evaluation process undertaken by regulators, highlighting the scrutiny of Sycamore’s governance structures, risk management frameworks, and client protection mechanisms.

Magbagbeola himself sees the move as a timely convergence of traditional capital markets knowledge and fintech innovation. “The SEC license creates a regulatory framework for what many Nigerians are already seeking — protected pathways for investment diversification during economic uncertainty,” he said.

Sycamore is also touting its technological infrastructure as a key differentiator in the asset management space. Co-founder and Chief Operating Officer Mayowa Adeosun explained that their “proprietary investment platform” leverages artificial intelligence and machine learning to analyse market trends and optimise portfolio allocations. The company has also recently upgraded its mobile app, offering features like institutional-grade portfolio analytics and a multi-currency wallet allowing users to hold and invest in US dollars, euros, British pounds, and Nigerian naira.

Founded in 2019, Sycamore initially gained traction as a Nigerian lending fintech, even securing seed funding in 2022 to expand its operations. Its initial focus was on providing quick business loans through its web and mobile applications, and it even introduced a feature allowing users to manage loans given to friends and family.

However, the broader economic context in Nigeria presents significant headwinds. The country’s GDP per capita lags behind many African peers, and inflation soared above 30% in 2024, driven by rising costs of essential goods. Foreign investment has also dwindled, with several multinational corporations, including Pick n Pay, Microsoft, Unilever, and IBM, either exiting or significantly reducing their presence in the country. The naira has also experienced sharp depreciation, further eroding investor confidence.

Despite these challenges, the Nigerian government remains optimistic about economic recovery, setting ambitious growth targets. However, analysts remain skeptical, pointing to persistent fiscal deficits and increasing debt obligations.

For Sycamore, the pivot into asset management could be a strategic response to the evolving economic landscape. As the purchasing power of Nigerian consumers declines, the demand for lending services might face limitations. Offering regulated investment opportunities, particularly with features like multi-currency wallets, could appeal to a segment of the population seeking to preserve and grow their wealth amidst economic uncertainty.

The success of Sycamore’s new venture will likely depend on its ability to attract and retain clients in a competitive financial sector, while navigating the ongoing macroeconomic challenges in Nigeria. The appointment of an experienced capital markets professional like Magbagbeola signals a serious commitment to this new direction. Whether this fintech can successfully transform itself into a significant player in the Nigerian asset management space remains to be seen, but its strategic pivot reflects the adaptability required for businesses to survive and thrive in Nigeria’s dynamic and often challenging economic environment.