The technology and innovation shaping cross-border payments in Africa
This article was contributed by Paschal Okeke, Head of Ops & Expansion at CrissCross, and Gwera Kiwana – Expansion & Partnerships, Avian Labs as part of the Emerging Trends in Cross-Border Payments: A Growth Guide for Stakeholders report authored by Aroghene Favour Ndulu and Paschal Okeke. What technologies are currently underutilised in Africa’s cross-border payment systems? The two answers that come to mind are blockchain and multi-currency account APls. Blockchain adoption has been slow partly due to regulatory and compliance challenges and the volatility of cryptocurrencies. Governments and financial institutions are still developing frameworks to regulate and monitor blockchain payments. Stablecoins have majorly solved the problem of volatility. Blockchain makes cross-border payments cheaper, faster, and more secure. Unlike traditional payment options, blockchain payments do not require intermediaries, and no single “organisation” is in charge. Every transaction is encrypted with a public record. Multi-currency account APls allow fintechs to create bank accounts for their merchants or end-users through partnerships with other financial institutions. These accounts will increase borderless payments’ ease through increased liquidity access. Sadly, this infrastructure is only present or mature in a few African markets- Nigeria, Ghana, and Kenya. If businesses had access to multicurrency accounts across Africa, currency exchange would be cheaper, settlements would be faster, and reconciliation would be easier. The entire FX operations will be smoother, and by extension, borderless trade will benefit it. Leveraging AI to combat fraud One everyday familiar use case is using Al for transaction monitoring. Machine Learning (ML) algorithms can monitor spending patterns and flag suspicious behaviours. These algorithms can help prevent identity theft, card theft, and phishing attacks. Al can also be used to build risk profiles, verify documents’ authenticity and improve due diligence. APIs and integrating cross-border payment solutions APls help to singularise operations. If a company provides settlements in 100 countries, it needs liquidity partners, brokers, and some sort of operation in those countries. APls make this easy. With APls, a business can easily offer multiple payment options, currencies, and geographies- balance and reconcile its treasury. APls mean you don’t need to start from scratch. One use case is using APls to access real-time exchange rates. This access protects transactions against the risk of fluctuations. APls also help with interoperability because most multi-currency desks have to connect with multiple brokers underneath the hood. Stablecoins and cross-border payments in Africa Stablecoins make remittance faster and cheaper. Stablecoins offer a seamless user experience for currency transfers. Imagine you travel to the Maldives; with one straightforward exchange, you can convert your naira to USDC and then to Rufiyaa (Rf) to pay for food, hotel, or transportation without needing to source Rf or access bureau de change locally. It is fast and efficient. Stablecoins provide an avenue to get real value for the dollar in emerging countries Interoperability in payment systems Interoperability in Africa is a mirage. You need to build your product to suit your audience and resources. Imagine trying to build solutions for WhatsApp (OTC) transactions. There is no global standard. As an organisation, you must create interoperable solutions based on the market’s needs, especially emerging markets. The organisations that can hack interoperability are the traditional banks. They have the assets, data, and resources to provide an integrated borderless payment service. Some banks are already working towards this, and it will be interesting to see how they perform in the future. You can read the full report here. __________________ Paschal Okeke– Head of Operations at CrissCross- a cross-border payments company leveraging modern blockchain and fiat technologies. He has over nine years of experience leading global operations at companies like Binance and Bolt. Gwera Kiwana– Expansion & Partnerships, Avian Labs. Gwera is a fintech and web3 expert who focuses on where both intersect. With years of experience building and scaling global fintech companies, she’s now driving global expansion and partnerships at Avian Labs for Sling Money.
Read MoreMoniepoint mirrors Jack-Dorsey’s Square with new POS
Moniepoint is testing an all-in-one point-of-sale (POS) terminal that combines payment processing, inventory management, and transaction reconciliation. The product is a result of Moniepoint’s December 2023 acquisition of Grocel, a fintech company that focused on inventory management solutions. The acquisition allowed Moniepoint to retain Grocel’s team, which has been working on integrating business management capabilities into Moniepoint’s POS terminals. Many physical stores commonly use POS devices for card payments and money transfers. However, Moniepoint’s new POS will manage the entire gamut of business processes for enterprises of all sizes and aims to replace the existing approach. Currently, businesses use separate methods or technologies for bookkeeping and inventory management, creating a theft and error-prone analogue nightmare. “It is pretty much like the roadmap of Square,[ a payment company in the U.S. that provides retail management POS devices],” said one Moniepoint executive who asked not to be named discussing a product under development. The only difference is that it is “more rugged,” the person said, adding that roadside vendors can use the device. Moniepoint will use distribution as its competitive advantage in a space where startups like Mira already provide all-in-one POS devices and terminals to retailers. The fintech unicorn has over 800,000 POS terminals in circulation and 2 million enterprise users to whom it will market the new device before the end of the quarter. Despite a billion-dollar valuation, success in new product lines isn’t always guaranteed. The CEO of Mira, Ted Oladele, suggests that fintechs entering the space might be limited by their focus on payments. “Businesses have peculiarities and established fintech startups may not have the appetite to build individual modules to meet unique business needs,” Oladele added. Furthermore, all-in-one POS solutions must be adaptable to cater to the diverse needs of complex businesses, especially in industries like retail and food service, where each business has peculiar needs. For example, while handheld POS terminals offer convenience for tableside ordering in restaurants, many establishments also require kitchen display systems (KDS) for a centralised overview of orders, tables, and operations. An established fintech may find the work required to meet these unique needs a distraction to its main business. It’s exciting to see more startups entering the market, as this creates new opportunities,” Oladele said. The idea of an all-in-one solution for enterprise users is not new. In 2023, fintech startup Nomba launched Nomba MAX, a POS device that combined payment processing with inventory management for restaurants—features that enable them to connect their transactions to payments directly. There are also global examples: Stripe, the parent company of Paystack, provides restaurants with POS solutions that go beyond basic payment processing. These solutions enable businesses to document sales, automate reconciliation, manage both dine-in and online orders, integrate with logistics companies, and more. Customising point-of-sale hardware to meet specific business needs is a powerful retention strategy. It gives enterprise customers compelling reasons to stay with a fintech company and attracts new users who were previously underserved by existing solutions. By empowering businesses to grow their businesses by streamlining operations and enhancing customer experiences, Moniepoint can increase payment processing volume on their platforms, which translates to increased revenue through transaction fees.
Read MoreMoniepoint, OPay, PalmPay responded to 2024 ban with better data collection and compliance
In 2024, Nigerian fintechs faced significant regulatory pressure, including fines and a six-week ban on onboarding new users due to compliance issues with anti-money laundering (AML) and fraud prevention standards. In response, leading fintechs revamped their operations, strengthening compliance measures and increasing data collection efforts to regain regulatory trust. Their efforts coincided with the CBN retiring 18 directors in May 2024, including a director of other financial institutions, causing a shift in regulatory stance. “Once the new guys came in, they didn’t have such strong feelings (for Nigeria’s fintech industry),” said a fintech executive who asked not to be named so they could speak freely. The new directors have been more open to collaborating with the fintech sector than predecessors, allowing leading fintechs to improve their lobbying efforts, two fintech executives said. The fintechs have made progress with some of the compliance issues the CBN flagged in 2024. They have significantly enhanced their data collection practices and send detailed reporting to the Nigerian Financial Intelligence Unit (NFIU) on politically exposed persons, suspicious transactions, fraud cases, and geo-tagged transaction data. They have also broadened the definition of suspicious transactions. PalmPay, which has over 30 million customers, has introduced software to flag large and frequent transactions that appear suspicious. This allows its compliance team to review the transactions before filing a report with NFIU. Moniepoint, a major Nigerian fintech, has also expanded its definition of suspicious activities as it now blocks accounts that log in from certain countries that are commonly linked to fraudulent activity. “We do not want to be a conduit for fraud,” one fintech executive stated, echoing a shared sentiment in the industry. Beyond tightening transaction monitoring, fintechs have restructured their teams to improve efficiency and accountability. Compliance teams are now integrated with customer onboarding and retention teams, allowing for better identification of potential threats. In addition to internal changes, fintechs have employed ethical hackers—cybersecurity professionals paid to test their systems for vulnerabilities. These ethical hackers aim to identify security weaknesses before malicious actors can exploit them, giving fintechs an added layer of protection. “These hackers help us stay one step ahead of criminals by exposing potential flaws in our systems,” a fintech executive explained. Minor improvements to the startups’ apps have also been a central focus. PalmPay and OPay have introduced facial recognition for first-time users, large transactions, and transfers to new beneficiaries. These tools are designed to enhance security and prevent fraudulent activities from slipping through the cracks. Both companies also launched a “night guard” feature for an extra layer of protection for transactions conducted after 6 p.m., a period traditionally more vulnerable to fraud. However, some of the fintechs’ improvements have impacted user experience with several customers sharing complaints of having accounts blocked after performing large transactions, requiring an explanation of the transactions before regaining access. But executives argue that this has been necessary to prevent fraud. Ultimately, the fintechs efforts have been met positively with regulators softening their hardline stance. Industry insiders have noted that regulatory agencies, including the CBN and NFIU, have become more receptive to fintechs’ security measures and reporting practices. This will only continue as long as Nigerian fintechs improve their compliance efforts, and like banks, present a unified front to regulators, for easier and more transparent regulatory supervision. “They just show up and look at our books,”fintech executives reveal stricter CBN compliance checks Nigerian fintechs ramp up compliance hiring months after customer onboarding ban
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TechCabal Daily – Bento Unboxed
In partnership with Lire en Français اقرأ هذا باللغة العربية TGIF Our sister publication Zikoko is looking for people who are passionate (or just curious) about personal finance to join a fun, open conversation about money. Here’s what’s in it for you: the chance to shape better money content…and a food voucher as a thank you. Interested? Fill out this form and the team will reach out to schedule a quick chat! Bento’s CEO resigns Nigeria’s labour union threatens to protest over telecom tariff hike SARB lowers borrowing costs Funding tracker World Wide Web 3 Events Startups Bento’s CEO resigns Ebun Okubanjo In Monday’s edition of the newsletter, we wrote about Bento Africa, the Nigeria HR-tech startup embroiled in allegations of failing to remit taxes and pensions on behalf of its clients. The company was also being investigated by the Lagos Inland Revenue Service (LIRS) and the Economic and Financial Crimes Commission (EFCC). The company’s CEO, Ebun Okubanjo maintained that the issue only affected a few percentage of its customers and chalked the issue to the inherent limitations of Nigeria’s complex and outdated tax and pension systems. Okubanjo also said the startup was working with the LIRS to come up with a plan to repay owed taxes. Yesterday, Okubanjo resigned from his position as CEO of the startup. In his letter to the company’s board of directors, Okubanjo attributed his decision to the difficulty of scaling HR and payroll systems in Africa. The move marks the CEO’s second attempt at moving away from the startup this year. Okubanjo had earlier sent a resignation letter to the company’s board of directors on January 11, 2025, asking the board to begin searching for his replacement. Ebun’s resignation came as a shock to some of Bento’s investors, some of whom only learned about his resignation in the news. While you might wonder what’s next for Bento, Okubanjo already figured out what’s next for himself. He is launching a new AI startup, Ada AI, an AI-powered sales assistant. Afincran Connect: A Fintech Mixer by Fincra Fincra is hosting an exclusive fintech mixer on 12th February 2025 in Nairobi, bringing together industry leaders for networking, conversations, and connections. Nairobi | 18:00 – 21:00 EAT Limited spots—RSVP now. Telecoms Nigeria’s labour union threatens to protest over telecom tariff hike Image Source: Wunmi Eunice/TechCabal Stakeholders with different interests—in and outside the telecom industry—won’t see eye to eye on the rationale of the recently approved 50% telecom tariff hike. Those invested in the sector’s stability—telco operators and the Nigerian Communications Commission (NCC), acting as a proxy for the government—reached a compromise to prevent further financial haemorrhaging in an industry that is one of Nigeria’s top GDP contributors. However, another group, including the Nigeria Labour Congress (NLC), a member union of millions of Nigerian workers, has announced that it will not stand for the hike. The union has made its strong opinions known about the decision, strongly describing it as “insensitive, unjustifiable, and a direct assault” on Nigerians. As a result, the labour union has threatened a nationwide protest on February 4. If we learned anything from NLC negotiations in the past, protests often lead to strike actions. A telecom-wide strike could cut off millions of Nigerians from telecom services. Worse, if fibre cuts or other network disruptions occur, striking workers and engineers who typically respond to restore service won’t be available, leading to prolonged outages. Still, telecoms—who have spent over a decade lobbying regulators for this tariff adjustment—are unlikely to back down. They argue the hike was long overdue, though critics point out that rural Nigerians already struggle with poor service, and the country’s high inflation makes the timing especially painful. Many consumers will either stretch their budgets to afford telecom services or cut back on usage. Yet, one thing is certain: while the timing of the hike is debatable, the rationale behind it is not. Change, especially sudden change, triggers strong reactions based on interests and incentives. The NCC appears unwilling to reverse its decision, and while a labour strike could shake up the telcos, the real question is whether workers can sustain the pressure. Economy South African Reserve Bank lowers borrowing costs Image source: South Africa Reserve Bank The South African Reserve Bank (SARB) has cut its benchmark rate by 25 basis points to 7.5%, marking the third consecutive easing. This move was widely expected, but the apex bank’s governor Lesetja Kganyago says he remains cautious, warning that future cuts may not come as easily. The decision, supported by four out of six Monetary Policy Committee (MPC) members, brings the prime lending rate for commercial banks down to 11%. Inflation in South Africa remains within the central bank’s target range (3.0%)—despite quickening by 10 basis points in December 2024—lower than the SARB’s 3.2% preceding forecast. This gave the apex bank some room to ease monetary policy, but uncontrollable global risks still remain the elephant in the room. Kganyago pointed to growing uncertainty in the US, particularly President Donald Trump’s trade policies. If the US imposes higher tariffs, it could push up global inflation and weaken the rand. The SARB has even modelled a worst-case scenario where the rand falls to R21 per dollar, domestic inflation rises to 5%, and interest rates are forced higher instead of lower. Despite these risks, economists believe another rate cut is likely in the first half of 2025. However, if inflation quickens later in the year, the window for further cuts could close. For now, the SARB has taken a step toward easing borrowing costs, but its hawkish stance suggests it won’t hesitate to reverse course if inflation or global shocks demand it. Never miss an update from Paystack Subscribe to Paystack for a curated dose of product updates, insights, event invites and more. Subscribe here → Insights Funding Tracker Funding Tracker This week, Rwandan-based Pula Foundation, an agriculture insurtech company, secured a $10.4 million grant from Bayer Foundation. (January 29) Here are other deals for the week: NjiaPay, a
Read MoreDespite streaming boom, Nigerians still prefer watching movies in cinemas
Despite the growing adoption of streaming platforms, cinemas remain the most preferred choice for Nigerians to watch movies, according to the Nigerian Box Office report by Filmone Group. 66% of 500 cinema-goers surveyed in the report prefer cinemas over streaming platforms, suggesting theatrical releases still hold strong appeal and remain a critical part of the Nigerian film industry. Streaming giant Netflix is the second most preferred choice at 27%, while YouTube which has seen a surge in Nollywood movies came third at 4%. Showmax and and Amazon Prime Video got 2% each. In December 2024, Netflix denied it was exiting Nigeria after media speculations. Amazon Prime, another streaming platform, exited Nigeria in January 2024—one year after investing in several Nigerian productions. Despite the strong appeal of cinemas, infrastructural gaps exist. According to the report, Nigeria has 102 cinemas, accounting for 92.9% of Anglophone West Africa box office. Lagos dominates with 36 cinemas, reflecting the consumer spending in Nigeria’s economic capital. 2024 shows growth in the cinema ecosystem with the emergence of 24 new cinemas with Silverbird Cinemas opening the first cinema in Kaduna. The report found that cinema admissions in Nigeria increased by 2% in 2024. “This resurgence underscores the enduring appeal of the big screen experience in Nigeria, even as ticket prices soared by 95% in nominal terms between 2021 and 2023,” the report said. Filmhouse Cinemas maintained the highest market share in West Africa for the seventh consecutive year with 28% grossing ₦3.2 billion in box office revenue. Silverbird Cinemas and Genesis Cinemas earned ₦2.2 billion each, with Silverbird holding a 19% market share and Genesis Cinemas capturing 18%. EbonyLife Cinemas had the highest-grossing cinema location in the country contributing 7% and making over ₦838 million in ticket sales, with more than 138,000 people buying tickets to watch movies at EbonyLife cinema. Filmhouse Group remains hopeful, saying ‘The opportunities for more cinema infrastructure, abound, especially as despite the macroeconomic headwinds hitting disposable income negatively, the subsector has remained resilient.’’
Read MoreAbuja airport internet outage exposes risks to Nigeria’s telecom infrastructure
On Tuesday, January 21, 2025, hundreds of passengers at Abuja International Airport arriving or leaving the country could not access the internet services they needed to access taxis or their flight schedules. The cause? A severed fiber optic cable disrupted the airport’s connectivity. The cable, owned by MTN Nigeria, was accidentally cut by road construction workers in a nearby community. When engineers arrived to repair the damage, local community members blocked access, demanding payment before allowing work to proceed. Faced with the urgency of restoring services, MTN Nigeria had to comply, escalating the cost of the disruption. Once repairs were completed, normal operations resumed, but for MTN, it was yet another costly incident of infrastructure vandalism. The disruption disruption highlights a growing crisis in Nigeria’s telecom sector. As the country’s largest telecom operator with the largest network of fibre cables (40,000km), MTN Nigeria faces an average of 37 fiber cuts daily—amounting to over 1,000 incidents per month. Airtel Nigeria reports similar problems with around 43 cuts per day and 7,742 incidents in the first half of 2024. cuts. Yahaya Ibrahim, MTN Nigeria’s Chief Technical Officer (CTO), told TechCabal that the rate of the cuts is not slowing down in 2025. The telco recorded over 860 damages to its fibre infrastructure in the first three weeks of January 2025. “Four weeks ago, at Park View estate, we had people throwing fire into the manholes (where fibre cables were laid). We lost traffic,” Ibrahim said. MTN also lost connection in Abuja and Lagos in February 2024 due to cuts affecting thousands of fibre cables from road construction and bush-burning. Road construction is responsible for 60% of the cuts; 20% is caused by vandalism, bush burning, farming activities, and pipe-borne water digging, and the remaining 20% is from theft of the cables. These frequent disruptions affect businesses and essential services and impose significant financial losses on telecom providers, exacerbating Nigeria’s connectivity challenges. According to Yahaya Ibrahim, one fibre cut in a location can impact 500 base stations, or a cut in a location in Ikoyi can impact services to Ikeja. In 2024, the government issued an executive order, designating telecom and other industry infrastructure as national assets and criminalizing intentional damage. However, implementation has not begun. Industry stakeholders are engaging with the government to develop an enforcement strategy. Their approach involves educating Nigerians on the importance of the CNI order; second, fostering inter-ministerial collaboration to align government agencies; and, enforcing the order through a joint effort between the NCC and the Office of the National Security Adviser (ONSA). Implementation is expected to begin in February 2025. In the interim, operators are exploring alternative fiber deployment methods such as using aerial cables along powerlines. While this approach reduces the risk of cuts and enhances security, it presents logistical challenges. Many base stations are located far from powerlines, requiring a transition from aerial to underground cables, and increasing costs. “So yes, aerial cables are less susceptible to cuts and are safer, but they are also more expensive,” Ibrahim told TechCabal.
Read MoreBento CEO’s resignation leaves investors in the dark amid EFCC, LIRS probe
Investors in Nigerian HR-tech startup Bento Africa were shocked at CEO Ebun Okubanjo‘s abrupt resignation, relinquishing his stake in the company without prior notice. His sudden departure comes amid allegations that Bento failed to remit millions of dollars in taxes and pension contributions for its clients, raising concerns about financial mismanagement and poor governance. Three investors who asked not to be named so they could speak freely revealed that investor relations at Bento have long been opaque. Unlike most venture-backed startups, which regularly share structured reports and financial updates, Bento rarely communicated with its investors, that person claimed. “Bento has never been known for transparency,” one early investor told TechCabal. “We weren’t getting quarterly reports, and when we asked for updates, responses were vague at best. Now, the CEO is gone, and we have no real clarity on what happens next.” Okubanjo’s resignation was initially communicated via a brief email to the company’s board of directors and at least two investors said they only learned about his departure when TechCabal reached out for comments. It is unclear how the unresolved financial obligations will be resolved and who will immediately be responsible after allegations that Bento failed to remit statutory deductions such as taxes and pensions on behalf of its clients. Okubanjo insists those incidents affected only a handful of clients and blamed the issues on Nigeria’s manual tax system. Bento raised at least $2.3 million in disclosed funding from Africa-focused venture capital firms including Zrosk, Berrywood Capital, and Kinfolk Venture Capital, according to Crunchbase. The startup positioned itself as a game-changer in payroll and HR management, expanding into Kenya, Ghana, and Rwanda with ambitions to dominate Africa’s employment benefits space. With its CEO gone, Bento now faces the difficult task of rebuilding trust with investors, clients, and regulators. The company’s lack of structured governance has become more apparent, and the absence of a clear successor to Okubanjo raises questions about whether Bento can weather the storm.
Read MoreFlutterwave, Yellow Card, OmniRetail named finalists for inaugural Africa Tech Summit Awards
Leading African startups Flutterwave, Sabi, Yellowcard, and Omniretail are among the finalists for the inaugural Africa Tech Summit Awards. From over 300 entries, the judges selected 5 finalists in each of the 11 categories, for a total of 55 finalists. The Africa Tech Summit Awards is a platform created to celebrate the most impactful tech innovations driving the continent’s digital future. The award celebrates excellence across multiple sectors, including fintech, healthtech, Web3, and climate tech. Winners will be announced at the awards ceremony as part of the seventh edition of the two-day Africa Tech Summit in Nairobi on February 13. The event is expected to gather over 2,000 industry leaders, corporates, investors, and international delegations. The summit will include fireside chats, panel discussions, keynote speeches, masterclasses, the Africa Tech Summit Awards, and the Investment Showcase providing opportunities for learning and networking. “All the finalists are transforming their sectors and driving growth across the continent, and we look forward to celebrating their achievements in Nairobi next month,” Lauren Adair, Director of Africa Tech Summit said. See the full list of the finalists below: Agritech: AFEX (Nigeria), ChipChip (Ethiopia), Mazao AgClimate Limited (Tanzania), Keep it Cool (Kenya), and Winich Farms (Nigeria). Artificial Intelligence: Cassava Technologies (South Africa), Chpter (Kenya), NextAV (Tunisia), Tawi Fresh (Kenya), and ToumAI Analytics (Morocco). Climate Tech: Afrilogic Solutions (Ghana), Innovex (U) Ltd (Uganda), Instollar Technologies (Nigeria), Sabi (Nigeria), and Takazuri (Kenya). Cross-Border Payments category: Aza Finance (Kenya), Flutterwave (Nigeria), Grey (Nigeria), WeWire (Nigeria), and Yellow Card (South Africa). In Digital Commerce, the finalists are OmniRetail (Nigeria), Sendmercury (Nigeria), SwiftVEE (South Africa), Tawi Fresh (Kenya), and Tola (Ireland). In EdTech, the finalists include Cassava Technologies (South Africa), DirectEd Development (Kenya), Hermplify (Nigeria), Ikusasa Technology Solutions(South Africa), and Laboussole (Cameroon). The Enterprise category includes Andela (United States), Beacon Power Services (Nigeria), Froid Energy Ltd (Kenya), Incentro Africa (Kenya) and Smile ID (Nigeria). In FemTech the finalists are Babysteps (Kenya), Hermplify (Nigeria), Mara Scientific (Uganda), My Pregnancy Journey (South Africa), and Sanicle Digital Health (United States). In the Fintech category, the finalists are Flow (Uganda), HUB2 (Mauritius), Peach Payments (South Africa), Valu (Eqypt), and Yellow Card (South Africa). For Health Tech, the finalists are Antara Health (Kenya), ION Kenya (Kenya), OneHealth (Nigeria), Remedial Health (Nigeria), and Zuri Health (Kenya). For Web3 the finalists are ICP Hub (Kenya), Investa Farm (Kenya), MiniPay (Nigeria), Sabi (Nigeria), and Yellow Card (South Africa).
Read MoreBento CEO resigns, amid EFCC, LIRS probe; gives up equity
Ebun Okubanjo, CEO of Bento Africa, a Nigerian payroll and human resource management platform, has resigned amidst allegations of failing to remit taxes and pensions on behalf of its clients. Okubanjo announced his resignation in an email to Bento’s board of directors, signaling a clean break by also relinquishing his equity and debt holdings in the company. This move opens the door for a potential fresh start for both Okubanjo and Bento Africa. In his resignation email, Okubanjo hinted at launching a new company, Ada AI, an AI-powered sales assistant. Okubanjo attributed his decision to the difficulty of scaling HR and payroll systems in Africa. “If Africa adopts the Western style of taxation and remittances—these companies are gold mines. I use Gusto in the U.S. not because I want to, but because I have to. Until that happens—scale will be a challenge,” Okubanjo wrote in the mail. His resignation comes at a turbulent time for Bento Africa, with allegations of financial mismanagement, particularly regarding the withholding of employee taxes and pension contributions. These claims were brought to light on Friday by Akintunde Sultan, co-founder of edtech company AltSchool. Additionally, Fuelmetrics, a digital inventory management firm for petrol stations, alleged that Bento Africa had failed to remit up to ₦50 million ($108,000) in taxes and pension contributions for 2023 and 2024. Okubanjo earlier sent a resignation letter to the company’s board of directors onJanuary 11, 2025. His resignation follows a controversial leadership journey, which included a brief outsing and subsequent return as CEO in 2022. Okubanjo stepped down in March 2022 after allegations of verbal abuse and creating a toxic work environment. Bento’s board appointed cofounder Chidozie Okonkwo as CEO but in a surprising turn, Okubanjo returned as CEO in September 2022 after Okonkwo resigned, citing personal reasons. Okubanjo’s resignation in January 2025 may not have been a complete shock to insiders. In 2024, he had signaled his intent to step down, with one employee claiming that Okubanjo had offered his position to Lede Adeniyi, the company’s CTO. Adeniyi declined the offer and left Bento in October 2024 to pursue entrepreneurial entrepreneurial ambitions of his own. In Okubanjo’s first email to investors on January 11, Okubanjo asked the board to begin searching for his replacement, stating that he would vacate the position in six weeks. He also reflected on his leadership journey in the same email: “This was an education; it will probably take a lifetime to parse through all the lessons of this great failure but as a forever learning type. I am okay with that.” Yet, three days after Okubanjo’s first resignation announcement, TechCabal learned Bento had not told contacted investors, with a handful unaware of the CEO’s resignation. One investor who asked not to be named claimed the company rarely sent investor updates, while another claimed to know next to nothing about the company. Both investors suggested the company’s operational transparency could have been improved. Bento was founded in 2019 and raised funding from investors like Berrywood Capital, Flexcap Ventures, and angel investors. Despite the roster of investors, allegations of a toxic workplace surfaced in 2022, a time during which Okubanjo claims the company was raising funding. One former employee claimed the incident derailed those talks. Bento is a member of a class of relatively new startups offering salary automation, statutory remittances like taxes pensions, and access to loans. It counts Moniepoint, Lori Systems, Paystack and Kobo360 among its client list and claims to have processed over $40 million in payroll since 2019. Despite these claims of success, some investors are skeptical about Bento’s future. While one investor claimed that it didn’t feel like a growing company, Okubanjo has repeatedly claimed the company is profitable, processing about ₦4-5 billion ($2.6 million) in monthly salaries with around ₦24 million ($15,871) in monthly revenue.
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TechCabal Daily – M-KOPA wins trademark case
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning Let’s dive right in. M-KOPA wins trademark case against former agent Lemfi acquires Irish company Bureau Buttercrane Kenyan banks lower lending rates World Wide Web 3 Events Companies M-KOPA wins trademark case against former agent GIF Source: Netflix M-KOPA, a Kenyan asset financing company, has won a trademark case against a former agent who copied its brand identity. The High Court ruled on January 23 that John Waweru Njenga’s business, “MKopo Kastomer Care and Accessories,” had violated M-KOPA’s trademark rights. The case, initially filed in August 2023, centred on Njenga’s deliberate use of a nearly identical name and logo to M-KOPA’s, which the court determined could easily mislead consumers into believing the two businesses were affiliated, thus helping “MKopo” to siphon off customers and revenue pipeline from M-KOPA. Here’s Adonijah Ndege reporting for TechCabal: “In M-KOPA’s case, the company’s legal battle was costly but necessary to protect its reputation. Court filings showed that Njenga’s business was riding on M-KOPA’s success, leveraging its established brand to drive sales of phones and accessories.” This case exposes a common problem in Kenya’s informal markets, where businesses often copy established brands to attract customers. Poor enforcement of intellectual property (IP) laws has allowed this practice to continue. However, the M-KOPA case will set a precedent for big brands to follow to protect their business IP. It teaches smaller brands the lesson of both protecting their intellectual property and conducting thorough trademark searches before launching new businesses to avoid costly legal battles like this one. Afincran Connect: A Fintech Mixer by Fincra Fincra is hosting an exclusive fintech mixer on 12th February 2025 in Nairobi, bringing together industry leaders for networking, conversations, and connections. Nairobi | 18:00 – 21:00 EAT Limited spots—RSVP now. Fintech Lemfi acquires Irish company Bureau Buttercrane for an undisclosed amount Ridwan Olalere and Rian Cochran, co-founders of LemFi. Image Source: LemFi After announcing a $53 million Series B funding round two weeks ago, LemFi, the migrant-focused remittance startup, has acquired Bureau Buttercrane, an Irish remittance company, as it begins its European expansion independently. The acquisition will allow Lemfi to operate across the European Economic Area (EEA) using its Irish licence through a system called passporting, which allows companies to operate across the EEA using a single licence. The acquisition was purely for regulatory cover and is similar to when fintechs in Nigeria buy MFB (Microfinance Bank) licences—they’re not looking for profitability or the technology in the acquired company but for regulatory cover. Lemfi told its customers it could operate in Europe 22 days ago after partnering with Modulr Finance, a Dutch company. But, CEO Ridwan Olalere told TechCabal that his startup partnered with Modulr while pushing for approval from the Central Bank of Ireland. That approval came quickly because Lemfi had “the right team and followed the correct processes.” Its previous acquisition of RightCard in 2021 made the Change in Control (CIC) process with Ireland’s Central Bank “straightforward.” Operating in multiple markets is necessary for remittance startups to grow as they serve more corridors (US to India, Europe to Africa) and increase their revenue base. More corridors mean a broader and stickier user base, as customers will likely remain loyal if they see the company as a one-stop solution for sending money to different places. Lemfi’s growth in the past year when it grew from $2 billion processed in 2023 to over $10 billion in 2024 was attributed to its expansion into Asia in 2024. The company also doubled users, revenue, and transactions over the past two years. Now, it will look at Europe’s $64 billion remittance market as the next market to drive its growth. With the deal completed, Lemfi plans to make Dublin its European headquarters, hire local staff, and deepen its relationship with regulators as part of its long-term strategy. Banking 23 Kenyan banks lower their lending rates GIF source: Tenor Twenty-three Kenyan banks have lowered their interest rates for the first time in six months since the Central Bank of Kenya (CBK) started easing benchmark rates. While lending rates have declined slightly, the shift has been uneven, with some banks reducing rates while others remain cautious. Fourteen banks opted to hike their lending rates despite CBK’s plea for a downward adjustment. Only Equity Bank, Kenya’s second-largest commercial bank, retained its November 2024 rates. Banks have been wary of the persistently high rate of non-performing loans (NPLs) which remained at 16.5% in October 2024, accelerating from 14.8% on a year-on-year basis. The surging NPL ratio points to the ongoing challenges in loan repayment among borrowers. This has made lenders hesitant to lower rates too aggressively, as they must balance CBK’s policy direction with staying solvent. By June 2024, customer deposits at commercial banks were down 7.4%—likely due to economic challenges—forcing banks to charge higher interest rates to cover the risk of bad loans and lower profits. However, following the CBK’s plea for a downward adjustment of their lending rates, Kenyan banks, through the Kenya Bankers Association (KBA) in December, said lending rates would drop “progressively” because banks depend on customer deposits to issue loans. With 23 of its 43 member banks now on board, the adjustment could ease borrowing costs. But only one bank—Access Bank Kenya—offers a rate below 15% (11.46%), while the average remains high at an average of 16.89% even after the adjustment. During the last Monetary Policy Committee (MPC) committee, the CBK eased the benchmark rate by 75 basis points from 12% to 11.25% in December 2024. With another CBK policy meeting set for February 8, 2025, banks will likely continue adjusting their rates cautiously, keeping a close eye on economic stability and loan performance in the coming months. Never miss an update from Paystack Subscribe to Paystack for a curated dose of product updates, insights, event invites and more. 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