Latest JAMB CBT mock updates 2024
In recent developments, it has been gathered from Joint Admissions and Matriculation Board (JAMB) candidates that all available slots for the JAMB CBT mock exams in Lagos for the year 2024 have been filled. We spoke to a couple of candidates currently trying to register for the Unified Tertiary Matriculation Examination (UTME) who narrated the challenge they face in not being able to choose Lagos as their preferred location. The limited capacity issue arises from the fact that only one day has been designated for the mock exams, and admission for it is granted on a first-come, first-served basis. This means that candidates resident in Lagos and who want to sit for the mock exam but have missed out on securing a slot in Lagos may need to consider travelling to neighbouring states where availability still exists. The exclusivity of slots in Lagos has created a challenging situation for local candidates, adding an unexpected hurdle to their preparation for the upcoming JAMB exams. This emphasises the need for a more robust JAMB infrastructure in densely populated states like Lagos. Notes to draw from the Lagos JAMB mock 2024 development 1. Alternative Locations Since JAMB mock slots are full in Lagos, candidates can consider exploring neighbouring states like Ogun and Oyo before theirs get filled too 2. Prompt registration If you are in neighbouring states like Oyo and Ogun, or in other states too, ensure timely registration for the JAMB mock exam to increase your chances of securing a slot, given the limited availability. 3. Use the JAMB Syllabus to study If you won’t eventually get to sit for the JAMB CBT mock exams, simply dedicate sufficient time to practising past JAMB exam questions and especially use the JAMB syllabus to familiarise yourself with likely questions. 4. Time Management skills Hone your time management skills during mock exams if you’ll be taking it or while practicing by yourself at home. Time yourself less than the potential time you’ll be allotted on the exam day and try to answer questions as efficiently as possible. these will help optimise your performance on the designated day. Final thoughts on JAMB CBT mock updates 2024 As candidates adapt to these unforeseen circumstances, staying informed and proactive in their approach will be essential for a successful JAMB mock exam experience in 2024.
Read MoreBreaking: Bolt launches in Zimbabwe with zero driver commission for six months
Bolt, an Estonian e-taxi company with operations across Europe and Africa, has launched its services in Harare, Zimbabwe. Bolt will not receive any commission from drivers for a minimum of six months. This same no-commission incentive was used during the platform’s launch of operations in Zambia. In countries like Kenya, Bolt applies a standard 18% commission, and no longer requires a booking fee. The Zimbabwe entry marks Bolt’s presence in its twelfth country, with its first launch in South Africa in 2016. Before this expansion, Bolt had conducted pilot operations in Zambia in October 2023. According to a statement seen by TechCabal, the platform will initially undergo a pilot test, which has onboarded 300 driver partners. Zimbabwe is now Bolt’s third station in the southern Africa region and will offer ride-hailing services to both corporates and individuals. Laurent Koerge, Head of Expansion at Bolt, said, “We are excited to be piloting our services in Zimbabwe. Our goal is not only to offer our drivers higher revenues per hire but also to ensure a high demand due to competitive prices. Accordingly, our commission is significantly lower than that of our competitors.” In early 2023, Bolt announced its plan to invest over €500 million in the African market. One of its initiatives was to job offer opportunities for over 300,000 driver partners. Currently, the company operates in 45 countries globally, serving more than 150 million customers and working with over 3 million drivers. The platform has worked towards enhancing the safety of its services for both riders and drivers. Addressing various safety concerns, it took the step of suspending over 10,000 drivers in Nigeria and Kenya during the last six months of 2023. Bolt has also implemented safety features, including an SOS button, rider and driver verification, and the ability for users to notify Bolt if a driver opts to go offline during a trip.
Read MoreIn 2023, 1 in every $3 invested into startups in Africa went into climate tech
Climate tech startups bucked the trend in Africa’s venture capital space, actively notching up an impressive $1 billion amidst a broader funding fall-off in 2023. Data tracker, Africa: The Big Deal notes that around 1 in 3 dollars invested into startups on the continent in the forecast period went to climate tech startups. The strength of the sector according to the Deal, illustrates “both the potential of ‘green’ investments in Africa and the increased focus of investors in this space.” “While energy and water start-ups took the lion’s share, agtech dominates the early-stage pipeline, also pointing to the need for greater innovation across diversified sectors that will need to adapt to climate impacts.” Rising investor interest in regional climate tech mirrors findings from the 2023 Africa Climate Awareness Report, published by bird story agency, which showed a growing preference for cleaner solutions among the populace. Africans showed a strong inclination towards green solutions such as solar-PV and electric vehicles, which are slowly entering the market, especially in Kenya, Nigeria, South Africa, Egypt and some Maghreb states. Partech Africa trackers showed that African tech startups hauled in $3.5 billion in total funding (equity and debt combined), a 46% dip from the previous year, spread across 547 deals. Despite a 22% drop in the overall amount raised by the climate tech sector between 2022 and 2023 (falling from $1.6 billion to $1.2billion), the sector still managed a modest increase in the number of debt deals – from 71 in 2022 to 74 in 2023. Part of the sector’s resilience is the availability and diversification of funding sources, such as impact investors, development finance institutions, corporate venture capitalists, and philanthropic organisations keen to support climate tech startups. The emergence and innovation of new business models and technologies such as pay-as-you-go have also made these startups more bankable, while artificial intelligence and the Internet of Things have enabled them to scale and reach more customers. Late last year, several climate tech startups from Africa were featured in the inaugural Google for Startups Accelerator. They offered solutions for energy, agriculture, and transportation using data, AI, and clean energy. These included NeedEnergy, a Zimbabwean startup that uses data intelligence to provide smart and clean energy solutions and Octavia Carbon, a Kenyan startup that designs, builds and is set to deploy machines that can directly capture CO2 from the atmosphere in the Kenyan Rift. Others were Seabex, a Tunisian startup that offers an AI-driven sensorless precision irrigation solution that empowers farmers with actionable insights for water-efficient crop growth and SolarTaxi, a Ghanaian startup that provides locally assembled electric vehicles to advance the growth and adoption of sustainable transportation. Support for climate tech companies in Africa has been growing internationally, too. At COP27, several UN agencies launched a programme to drive new capital flow in climate tech to help African states harness and build renewable energy systems to power their economies. Climate tech is seen as an important ingredient in fast-tracking Africa’s transition from high-pollution industries to adopting clean sources and promoting an energy transition in line with the 1.5-degree goal
Read MoreNigeria’s broadband penetration drops 10.7% on adjusted population figure
Nigeria’s broadband penetration declined by 10.7% after Nigeria’s Population Commission adjusted the country’s population figures. Per the adjustment, only 40.48% of 216.7 million Nigerians had internet access by September 2023. The adjustment caused a five-month delay in sharing the data. Aminu Maida, Executive Vice Chairman of the NCC, said the adjustments are appropriate to maintain the integrity of the telecom industry‘s data. The adjusted figures show Nigeria still has some way to go in reaching a recent broadband penetration target of 70% by 2025 set in the Strategic Blueprint presented by Bosun Tijani, Minister of Communications, Innovation, and Digital Economy. Broadband penetration refers to the amount of the internet access market that high-speed or broadband internet has captured. The Nigerian Communications Commission (NCC) said the previous calculation of the industry statistics was based on a 2017 projection of 190 million people. To align with international best practices, the NCC used the NPC’s 2022 projection of Nigeria’s population at 216.7 million to calculate the latest figures for September. The adjusted calculation also led to a decline in Nigeria’s teledensity from 115.63% to 102.30% in September. Teledensity measures telephone penetration in a population. However, active voice subscriptions witnessed a slight growth of 0.63% from 220.3 million to 221.7 million as of September 2023. Internet subscriptions grew slowly by 0.71%, from 159 million in August to 160.1 million in September. On Saturday, Karl Toriola, CEO of MTN Nigeria, said that the rising cost of smartphones and other connectivity devices is primarily responsible for the continued digital inclusion gap in the country.
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👨🏿🚀TechCabal Daily – Nigeria to fight PoS fraud
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning January’s finally coming to a close. As you reflect on which of your resolutions are reasonable and which are as idealistic as unlimited PTOs, please take a minute to tell us what you think about TC Daily so far. Give us a shoutout on X (Twitter), or respond to this email with your thoughts. Let’s go! In today’s edition Nigeria wants to tackle POS fraud MTN invests $215 million in Benin Will $500 million clear Nigeria’s backlog? Kenya’s Apollo receives $10 million in funding The World Wide Web3 Opportunities Cybersecurity Nigeria to tackle POS fraud Last week, financial institutions sought regulatory approval to launch their fraud-fighting mission. That mission will see two areas receive special focus: Bureau de Change operators and banking agents often serving as fraudsters’ cash-out channels. This week, the county’s apex bank is taking it a step further. In a collaborative effort to combat fraud, the Central Bank of Nigeria (CBN), through the Nigerian Electronic Fraud Forum (NeFF), has teamed up with the Association of Mobile Money and Banking Agents of Nigeria (AMMBAN) to implement a new security feature on Point of Sale (PoS) terminals. This feature will alert agents to potentially fraudulent transactions and prompt them to collect specific Know-Your-Customer (KYC) information before proceeding. If your PoS transaction is flagged, you basically have to verify your identity. Why? Reports show that in Q1 2023, Nigerian banks lost ₦472 million ($562,491) to POS and mobile fraud. BY Q2 2023, the number quadrupled with over 10,098 fraud cases worth ₦1.95 billion ($2 million) reported. Last year, Nigeria had several cash shortages that sent people running from banks to PoS agents who are available on almost every street. Per NIBSS, in March 2023, there were 1.8 million deployed PoS terminals in the country and the value of transactions over PoS terminals jumped to ₦1.1 trillion ($1.1 billion) compared to the ₦718.5 billion ($756 million) recorded in the same month in 2022. The fight against fraud isn’t a solo act: The Nigerian Interbank Settlement System (NIBSS), is the tech muscle behind the new PoS feature which is set for a Q1 launch. The Nigerian police and the Department of State Services (DSS), are also working alongside NIBSS and the association of banking agents in Nigeria to track fraudsters at agent locations. There are also hopes to mandate a common identification system for the over 1.7 million banking agents on the AMMBAN database. Access payments with Moniepoint Moniepoint has made it simple for your business to access payments while providing access to credit and other business tools. Open an account today here. Telecom MTN invests $215 million in Benin Africa’s telecom giant, MTN Group, has pledged a $215 million investment in Benin over the next three years. What’s the investment for? The investment will first see the MTN Benin subsidiary which has been in business for 25 years get a brand-new office. MTN Group has successfully tested its 5G services in Benin and sees potential in the country. The investment is a strategic move to leverage this opportunity for mutual benefit between the telecom and the host country. Additionally, MTN will partner with the government and other stakeholders, to invest in education and skills development for the youths. The announcement was made during a visit to Cotonou by an MTN Group delegation, led by President and CEO Ralph Mupita, in a meeting with Benin’s President, Patrice Talon. MTN has also made similar investments in Nigeria and Cameroon. In July 2023, the telco revealed a $3.5 billion investment plan for Nigeria’s economy over the next five years. In Cameroon, the group invested $225 million, over three years, to strengthen its operations in the country. Zoom out: MTN recently revealed its planned exit from three smaller markets—Liberia, Guinea-Bissau and Guinea-Conakry—in November 2023, with their 1.6% revenue contribution and subscriber counts below 10 million. Benin, a country with just 8 million subscribers is getting a royal treatment from MTN. Numbers tell one story, but Benin’s got something else going on—and it’s worth $215 million. Secure payment gateway for your business Fincra’s payment gateway enables you to easily collect Naira payments as a business; you can collect payments in minutes through bank transfers, cards, virtual accounts and mobile money. Create a free account and start collecting NGN payments with Fincra. Economy Nigeria makes new $500 million injection to clear FX backlog Nigeria’s Central Bank yesterday pumped $500 million to partially clear an FX backlog that has continued to pressure the country’s currency. The fresh cash injection is coming as the naira hits a new low of ₦1,421 per dollar on the official market this week. Lagos-based investment bank Chapel Hill Denham also estimates the country’s dollar liquidity at $100.97 million, indicating a 20% shortage. Despite a devaluation last year and a decision to float the Naira, the currency has witnessed even more volatility as the CBN tries to clear a backlog thought to be around $5 billion to $7 billion. This week’s sharp plunge has been the subject of social media frenzy, and many commentators have criticised the apex bank for a lack of clarity around policy and a seeming lack of urgency. Why it matters: The persistent currency depreciation as a result of the backlog fuels inflation and stifles the purchasing power of the everyday Nigerian as prices of electronics, food prices and other necessities are on a steady increase. A used iPhone XR that used to be about ₦150,000 ($167) in 2023 has doubled in price. Similarly, a carton of noodles which cost ₦4,500 ($4.73) in 202 now costs ₦7,000 ($7). Zoom out: Last week, Wale Edun, the minister of finance, shared plans to get a $1.5 billion loan facility from the World Bank and possibly tap the Eurobond market, but a continued dollar shortage in the short term has left the market unimpressed. Accept fast in-person payments, at scale Spin up a sales force with dozens
Read MoreExclusive: Nigerian PoS terminals will get fraud-flagging feature by end of Q1 2024
The Central Bank of Nigeria, through the Nigerian Electronic Fraud Forum (NeFF) is collaborating with the Association of Mobile Money and Banking Agents of Nigeria (AMMBAN) to create a new feature on PoS terminals that will flag fraudulent transactions at agents’ locations by asking for specific KYC details before processing some transactions. “We are at a very advanced stage, and we’re about to finish the technology side of it in terms of activating some features,” said Fasasi Sarafadeen Atanda, President of AMMBAN. He also noted that the Nigerian Interbank Settlement System is one of the drivers of the initiative. The collaboration effort is also driven by the Nigerian Electronic Fraud Forum, Lilian Phido, the head of Corporate Communications at NIBSS, told TechCabal. “Constant innovation within the industry underscored the necessity for the Central Bank to establish a dedicated body (named the Nigerian Electronic Fraud Forum) which consists of all key players and stakeholders to proactively work together in collaboration as an industry in ensuring the integrity of the payment systems across the nation,” said Phido. The feature will be prominently displayed on the PoS terminal agents across the country. After a meeting with NIBSS last week, AMMBAN hopes the feature will be ready for launch by the first quarter of 2024. There is also a coalition of security agencies, including the Nigerian police, Department of State Services (DSS), AMMBAN and NIBSS, to enable the easy tracking of fraudsters at agent locations. The coalition hopes to mandate a common identification system for the over 1.7 million banking agents on the AMMBAN database. There are also discussions for agents to be trained and certified, but other stakeholders take a dim view of this strategy. “The entry point of the fraud is not agent location but the fact that some accounts and wallets aren’t tied to real identities,” said Femi Omegbenigun, CEO of 3Line Card, a Nigerian payments company. “The fact that these accounts have underlying KYC issues means agents are not always aware that the money they are disbursing is proceeds of fraudulent transactions.” And while whistleblowing channels exist nationwide, agents have only sometimes used them, said the AMMBAN President. There have been occasions when banking agents raised issues with particular transactions they considered suspicious and reported to the banks, but the financial institutions failed to act. When the same issues were reported to security agents, they sometimes asked for money before taking action. “The individual agents are always discouraged from pushing that because you will end up wasting your money and resources,” Atanda said. While they wait for the new feature on the PoS terminals, Atanda says the agents have commenced the implementation of the BVN-NIN policy of the CBN. New customers must provide either a BVN or NIN or both to open an account.
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👨🏿🚀TechCabal Daily – DStv retains rights to WWE
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Soon, you may be able to control your phone or any device just by thinking about it…and it’s all thanks to Elon Musk. Yesterday, the billionaire announced that human trials for Neuralink’s first product, Telepathy, have begun and the first human test subject is recovering quite nicely and already showing promising signs. Musk says the initial users will be amputees. As Twitter sputters under his watch, one question hangs heavy: will Neuralink receive the focus it needs to navigate the ethical and technical minefield ahead? In today’s edition Nigeria investigates 17 data breaches DStv retains rights to WWE Chaka’s CEO finds a new path Miden gets selected for YC Inside Musk’s new Trust and Safety Centre The World Wide Web3 Opportunities Regulation NDPC reports 17 data breach cases being investigated The Nigerian Data Protection Commission (NDPC)—Nigeria’s data regulatory agency—had a busy 2023. In June 2023, it began investigating Zenith, GTB, Fidelity, Leadway Insurance and Babcock University for data breaches. By October 2023, it extended its focus to Opay, DHL and Meta. According to the NDPC commissioner, Dr Vincent Olatunji, the commission has gotten over 1,000 complaints, and after careful examination, 50 have been verified with 17 cases actively being investigated. What could get a company fined? The Nigeria data protection framework empowers NDPC and NITDA to fine entities violating the Act, with penalties directly linked to the severity of data protection breaches. Fines range from ₦2million ($2,100) to ₦10 million ($11,000), or 2% of the company’s annual gross revenue of the preceding year and are imposed for violations like neglecting compliance, mishandling breaches, or obstructing investigations. According to one report, Nigeria ranks as the 32nd most breached country in the first quarter of 2023, with 82,000 leaked accounts from January to March 2023, representing a 64% increase from the previous quarter. It’s doing its job: The NDPC’s moves are also translating to increased revenue and compliance. The commission has also earned over ₦400 million ($444,197) in revenue and according to Olatunji, more companies—from 103 to 163—are now embracing data privacy standards thanks to the NDPC’s targeted awareness campaigns and capacity-building initiatives. Access payments with Moniepoint Moniepoint has made it simple for your business to access payments while providing access to credit and other business tools. Open an account today here. Streaming DStv retains rights to WWE Multichoice is back in the ring! Remember last week when Netflix inked a $5 billion deal to become the new home to WWE’s Monday night wrestling show? DStv announced today that it’s retaining the right to stream WWE events in Africa. Multichoice makes a comeback: The Netflix deal, spanning 10 years, throws all WWE content—SmackDown, NXT, WrestleMania, SummerSlam, Royal Rumble, WWE documentaries, and original series—on the streamer. Per MyBroadBand, the Netflix deal will not affect MultiChoice’s contract with the WWE. How so? The Netflix deal only covers specific territories, US, Canada, Latin America, excluding South Africa and other African countries where DStv holds the rights. This allows DStv’s existing contract to remain valid in its geographical region. Yes, and: The move could also push more subscribers to DStv as some of Netflix’s 1.2 million African users who looked forward to streaming WWE will now have to find another alternative. Secure payment gateway for your business Fincra’s payment gateway enables you to easily collect Naira payments as a business; you can collect payments in minutes through bank transfers, cards, virtual accounts and mobile money. Create a free account and start collecting NGN payments with Fincra. Startups Chaka’s CEO exits five months after Risevest merger Tosin Osibodu, the founder of Chaka—a digital trading startup—has departed the Nigerian startup five months after its acquisition by Risevest. Osibodu is now the Executive Director of Sales for Alpaca, a company working on trading stocks and crypto. Meanwhile, Eke Urum, the founder of Risevest—a Nigerian digital asset manager—is now the main CEO of the combined companies—Chaka and Risevest. ICYMI: TechCabal exclusively reported in September 2023, that Risevest fully acquired Chaka in a deal that saw Chaka and Risevest remain separate products. With Osibodu exiting Chaka after the merger, it is unclear if both companies will remain separate in the merger. However, even though Osibodu left Chaka, he’s still part of the team as a shareholder and advisor. Osibodu will work to deepen Alpaca’s footprint in Africa, the Middle East, and Europe. The firm currently powers over 130+ investing services for neobanks and wealthtechs. In October 2023, Alpaca secured $15 million in funding from Japanese financial conglomerate SBI to help Alpaca expand its business in Asia. Accept fast in-person payments, at scale Spin up a sales force with dozens – even hundreds – of Virtual Terminal accounts in seconds, without the headache of managing physical hardware. Learn more → Funding Nigerian startup Miden, selected for YC winter 2024 batch At a time when Y Combinator which has backed over a hundred African startups like Flutterwave and Stripe is scaling back investments from Africa, Miden—a startup that simplifies business payments with instant virtual cards (USD & Naira)—has made it into the YC winter 2024 batch. Miden joining the batch comes after Cleva, a cross-border payment service was also selected for the W2024 batch. A Kenyan travel startup is reportedly the third African startup in the batch. A significant decline in African startups: After YC’s winter 2022 batch which comprised of 24 African startups, fewer African startups have been accepted into the global accelerator. Its Summer 2022 batch had just eight African startups, a 63% decline from the previous cohort. It seems YC is now backing a maximum of three African startups, a change likely implemented since the 2023 winter batch which saw the accelerator welcome only three African startups—Vault Pay (DRC Congo), ChowCentral (Nigeria), and Eden Care (Rwanda). This isn’t YC’s first foray into supporting African fintech innovation. The 2022 winter batch saw promising startups like Grey (Nigeria), Bloom (Sudan), Plumter (Nigeria), Nash (Kenya), and Lenco
Read MoreExclusive: Chaka founder Tosin Osibodu exits company after Rise merger
Tosin Osibodu, the founder of Chaka, a Nigerian startup that allows retail investors to buy shares from the NYSE and other foreign stock exchanges, has left the business five months after Rise acquired the company. Per his LinkedIn page, Osibodu has joined Alpaca, a company that develops APIs for trading stocks and crypto. Eke Urum, the founder of Rise, is the sole CEO of the recently merged companies. “[Urum] has integrated to build a sum greater than its parts. I’m really excited about the future roadmap of both entities under his leadership,” Osibodu said in a LinkedIn post. Urum, who introduced himself to Chaka users as the new CEO a few weeks ago, told TechCabal that Osibodu is still a shareholder in the company and will continue in an advisory role. “Before he transitioned to Alpaca, we went through a process during which he gradually handed over the day-to-day decision-making of Chaka to me,” Urum told TechCabal. Urum says he is also well supported by former employees of Chaka. “One of them is primarily driving operations with me.” Both founders previously told TechCabal that while Chaka’s ownership and cap table will be updated, its products will remain separate. Osibodu’s departure raises questions regarding whether Chaka and RiseVest will continue to remain separate products or merge. Chaka was founded in 2019 to allow users to buy shares of publicly traded companies in Nigeria and the United States for as little as $2. It became the first trading startup to receive a digital sub-broker licence in March 2021. As Executive Director of Sales for Alpaca, Tosin Osibodu will be working to deepen Alpaca’s footprint in Africa, the Middle East, and Europe. The firm currently powers over 130+ investing services for neobanks and wealthtechs. “We are hoping that a three-way partnership [with Rise, Chaka, and Alpaca] will come out of this new working relationship,” Urum told TechCabal.
Read MoreBreaking: Y Combinator latest African pick is Miden, a Nigerian API-fintech startup
Miden, a Nigerian startup that allows businesses to issue virtual cards to their customers through its API, has been selected for Y Combinator’s winter 2024 batch. Miden is the latest Nigerian startup in this year’s winter batch after Cleva, the cross-border payment service. Miden, which provides both USD and Naira virtual cards for businesses, launched in 2022 to solve the operational challenges businesses face managing traditional payment methods, like high transaction fees, complex paperwork, and slow card issuance times. The company’s API-based platform allows businesses to instantly issue virtual cards (USD and Naira denominations) at scale. Per its website, Miden has issued over 100,000 cards and is present across four countries. YC seems to be backing remittance startups on the continent for this year’s winter batch. Cleva, the first disclosed startup, creates dollar accounts to help individuals and businesses receive international payments. YC made a similar bet in its 2022 winter batch, selecting Grey, a Nigeria startup providing foreign accounts for users; Bloom, a Sudanese startup; Plumter, a Nigerian API provider for cross-border payment; Nash a Kenyan fintech for borderless and Lenco, a Nigerian fintech. In 2023, the accelerator selected Vault Pay, a payments infrastructure company from DRC Congo, Nigeria’s food delivery startup ChowCentral and Rwanda’s Eden Care. *This is a developing story
Read MoreFintechs brace for competition as Nigerian banks charge into digital lending market
Nigerian traditional banks are making a push into the digital lending market in a move that will pitch them against their digital competitors. For the banks considering this move, a standalone digital lending app means they can acquire customers from smaller banks with high interest rates. Customers of other digital lenders may also be there for the taking, considering that most traditional banks have the cheapest lending rates in the market. On January 17, TechCabal reported that Access Holding Plc, the parent company of Access Bank, received approval in principle from the Central Bank to launch Oxygen X, a standalone lending product. While Access is the first holding company to make a play for standalone digital lending, other banks are in talks to spin off standalone digital lending services, a highly-placed industry source told TechCabal. “Banks may launch their apps, but they don’t have the mastery of execution that fintechs have,” said the source who asked not to be identified. “Banks will possibly drop the ball. I am not betting on any banks to win in the market.” That argument isn’t new. When traditional banks began a push into fintech, the consensus from fintech insiders was that the banks didn’t have the operational chops to mount a challenge. But Habari Pay, the fintech arm of Guaranty Trust Holding Company (GTCO), posted profits of ₦1.3 billion in the first half of 2023, according to GTCO’s financial report. It also may be premature to write off the big banks given that QuickCredit, arguably the most innovative lending product in the last few years, has come from the banks. Will banks change their approach to retail lending? While one of the core mandates of commercial banks is to lend, they don’t give out a lot of loans, especially to individuals and small businesses (retail lending). Rather than serve a mass market with a high risk of defaults, banks would instead give loans to high-quality borrowers such as salary earners with credible employers. A former bank executive argues that the entry of traditional banks into the digital lending market will only be a game-changer if the banks abandon the old lending and leverage data philosophy. “For me, the big question is, what will be different? What is the play? Is it lower rates and faster returns? One advantage banks have is that they can unlock customers’ data to make lending decisions,” he said. Nigeria’s digital lending market is dominated by startups like Carbon, FairMoney, and OPay, serving a growing mass of digital-first customers. There are about 211 licensed digital lenders in Nigeria, according to the country’s digital lending regulator, the Federal Competition and Consumer Protection Commission (FCCPC). The selling point for these startups is the simplified lending process, allowing people to get loans in a few minutes and less stringent KYC requirements. But easier means more expensive. Many digital lenders offer loans with interests as high as 30% per annum, while banks like GTBank—through its digital lending platform QuickCredit—offer around 21%. The difference in interest rates often comes down to the cost of financing. While traditional banks have trillions of Naira in customer deposits to lend from, fintech startups often draw on debt or venture funding. Beyond this, digital lenders don’t have as many data points to make loan decisions, meaning slightly more risk. These risks are baked into the interest rates. The cost of loan recovery is also one key issue lenders have to deal with. As one industry insider put it, traditional banks “can’t do the rough things,” referring to some digital lenders’ questionable loan recovery methods. One thing is clear: traditional banks offer lower interest rates to beat fintechs. Whether they can change their lending strategies remains to be seen.
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