- September 4 2023
Exclusive: mPharma lays off 150 employees due to tightening macroenomic conditions
mPharma is parting ways with some of its workforce as it doubles down on its Mutti product. mPharma, the Ghanaian startup that manages prescription drug inventory for pharmacies and their suppliers, has laid off some members of its workforce. “We took the difficult decision to right-size the team,” said Gregory Rockson, the company’s CEO; “[the layoffs are] in light of the current macroeconomic conditions driven by the devaluation of the Naira.” About 150 employees—40 in Nigeria—were affected by the layoffs, and severance packages were provided to the affected employees.”We allowed affected employees to keep their health insurance, and we extended the period for them to exercise their stock options from 90 days to 3 years,” Rockson said. mPharma has raised $90 million, including a $35 million series D last year. In September 2022, the startup bought a majority stake in HealthPlus, a leading pharmacy chain in Nigeria, for an undisclosed amount. A year before, it also bought a 55% stake in Uganda’s Vine Pharmacy— the second country in East Africa after buying Halton’s Pharmacy in Kenya for $5 million in 2019. The startup operates in nine African countries: Ghana, Nigeria, Kenya, Zambia, Malawi, Rwanda, Uganda, Gabon and Ethiopia. mPharma will now be focusing primarily on its main healthcare business, Mutti. Mutti is mPharma’s online pharmacy and according to their impact report, they are looking to have a Mutti pharmacy in every community on the continent. According to Rockson, “This decision will allow us to continue to serve the over 200,000 patients who rely on our Mutti services for their healthcare needs each month.” mPharma, which was launched in 2013, started as a way to provide prescription drug inventory for pharmacies and their suppliers, manage retail pharmacy operations and to provide market intelligence to hospitals, pharmacies and patients. In 2021, they added telehealth services because of the high demand for telemedicine after the COVID-19 pandemic. They also helped the Ghanaian government procure vaccines for in 2020. Since then, mPharma has rolled out several projects and services, including a $3 million molecular diagnostic fund to facilitate investments in private hospitals in Ghana and Nigeria.
Read More- September 4 2023
Anchor closes $2.4 million to scale banking-as-a-service for African businesses
Since its public debut one year ago, Anchor has processed more than $550 million. YC-backed embedded finance fintech, Anchor, has raised $2.4 million in a seed round led by Goat Capital with participation from FoundersX, Rebel Fund, Pioneer Fund, Y Combinator, Byld Ventures and Future Africa among others. Anchor’s partnership with regulated financial institutions enables fintechs and SMEs to create and embed financial services in their core products. Using Anchor’s APIs, fintechs and even regular businesses can generate bank accounts, issue cards, make and receive payments seamlessly, and offer savings and investment products without needing to acquire expensive licences. Anchor was publicly launched in August 2022 on the back of a $1 million pre-seed round and its selection for the summer cohort of Y Combinator. The company says it has now hit over $550 million in annualized total transaction volume (TTV), with revenue growing 30% month-on-month. “We’ve been fortunate to have been able to just grow the platform very quickly, which we believe confirms that there was actually a problem to be solved. And there is a there’s a need, and we just want to double down with this new funding,” Segun Adeyemi, CEO and co-founder of Anchor told TechCabal. In a press statement shared with TechCabal, Anchor says it recently the company signed a partnership with the fintech arm of Africa’s largest telecom in Nigeria, MTN MoMo PSB which it hopes will dwarf its previous growth numbers. Anchor charges users for accessing the platform, but also takes a cut of every billable transaction, according to Adeyemi. It counts SeamlessHR, LifeBank, Penne, Zit and 56 other companies as customers and is hoping to grow its customer base beyond fintechs to also target other businesses. Embedded finance is the latest current in the world of financial technology companies that broadly follows the spirit of fintech-enabling reforms like Open Banking, to allow non-financial providers to offer payment, savings, insurance and other financial services to their consumers, users, or businesses. Fintech Focus: Why is embedded finance becoming popular By adding financial services to their core product offerings, companies can enable their customers to access financial services as part of a user journey their customers are already familiar with. As more parts of African businesses become digital, fintechs are in a race to capture the growing market segment of newly digitising business sectors. Anchor thinks there is a $7 billion opportunity locally for the taking. Globally that market is expected to surpass $622 billion in a decade. This current of embedded finance is interesting because it represents a switch from the previous two decades of consumer fintech to fintech that enables financial services for other sectors. Justin Kan, Partner at Goat Capital, says, “The embedded finance market in Africa is nascent but growing fast at over 30% CAGR. Anchor’s growth rate is impressive and showing signs of becoming the category leader which is something we look out for in our portfolio companies.
Read More- September 4 2023
AltSchool Africa introduces new schools in creative and business industries
AltSchool Africa has expanded its faculty and hopes to leverage the growing interest in Africa’s creative economy. Nigerian ed-tech startup AltSchool Africa has expanded its facilities to include creative economy and business schools. AltSchool Africa, which traditionally offered tech-related courses, has now included content creation, sales, and music business (using Afrobeats) to its existing nine courses. The edtech startup claims it had a 40% completion rate in its first year. According to a statement shared with TechCabal, the new programs are designed to provide a comprehensive and experiential upskilling platform for aspiring learners looking to forge careers in other growing sectors. AltSchool Africa is hoping to leverage the growing interest in Africa’s creative economy that has created a new wave of nonconformist career paths such as music management, content creation, and influencer marketing. Speaking on the launch of the new schools and call for applications, co-founder and CEO of AltSchool Africa, Adewale Yusuf, said, “We are excited to announce the addition of these two new faculties, with qualified experts leading the courses. These industries were specifically chosen for their rapid growth, and we want to help people quickly enhance their careers in these fields.” Co-founded by Yusuf, Akintunde Sultan, and Opeyemi Awoyemi in 2021, AltSchool Africa has successfully enrolled more than 20,000 learners. The programmes offered have no educational requirements and can be completed in as little as six weeks with course fees starting from $100. Per the statement, Nigerian artist Falzthebahdguy (Folarin Falana) and content creator and actor Mr. Macaroni (Adebowale Adedayo) will be joining the creative economy school as facilitators, while media personality Do2dtun (Oladotun Ojuolape Kayode) was recently named as the school’s Creator Relations Director. Other facilitators joining AltSchool Africa’s business faculty include Nigerian film director and cinematographer Nora Awolowo, multi-award-winning music journalist Joey Akan, and content creator Aproko Doctor (Chinonso Egemba). Dr. Ademola Akinrinola, Director of Curriculum and Learning Experience Design at AltSchool Africa added, “The AltSchool curriculum is designed to cater to learners of all levels, from beginners to experts, who possess a natural curiosity and a drive to solve problems.” AltSchool prides itself on creating internship opportunities for its graduates. But this won’t apply to the new schools, according to Yusuf. “When learners enroll in any of the 6-week courses, they will learn directly from industry experts and leaders who will supervise their capstone projects and provide comprehensive feedback at the end of the course,” he told TechCabal.
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- September 4 2023
Paving the way for affordable cross-border payments in Africa
Image source: Openway Group According to the African Development Bank (AfDB), cross-border banking has emerged as a critical feature within Africa’s financial landscape. It not only facilitates transactions across regions for individuals but also plays a pivotal role in expanding markets and nurturing innovation for businesses. In Africa, Small and Medium Enterprises (SMEs) sell to and depend on imports from suppliers in other countries to meet their local production, sales or reexport goals. Sub-Saharan Africa also, saw diaspora remittances grow by an estimated 5.2% ( $53 billion) in 2022, compared with $24.3 billion in 2018. This significant trade flow between African countries and between Africa’s top trading partners globally present promising opportunities for business payment facilitation. However, for African businesses, navigating the cross-border payment landscape has proven to be a costly and complex endeavor. For instance, in 2017, Nigeria’s central bank opened a special facility to provide up to $20,000 per quarter for small and medium businesses who struggled to access the forex they needed to finance imports. Similarly, last year, small-scale importers in Kenya were hit hard by a scarcity of forex that forced banks to impose $1500 to $2000 daily limits. Currency exchange expenses, inadequate payment infrastructure, compliance costs, and limited access to financial services are major barriers to seamless payment operations for African businesses. Also, high transaction costs continue to impede progress, rendering cross-border payments expensive and inefficient. The volatility of exchange rates makes it difficult for businesses to plan ahead and hedge against inflation and this causes losses for many businesses who are reliant on cross broder transactions. More than anything else, it is now important for businesses to pay attention to getting revenue from outside their local environment as a way to gain foreign currency to facilitate foreign transactions for their businesses “Navigating cross-border payments requires a nuanced understanding of the African user base,” said Lucia Okafor, senior manager of payments & financial services strategy at Deloitte during a recent edition of TechCabal Live that gathered industry leaders to discuss the intricacies of cross-border payments in Africa and shed light on the challenges, opportunities, and future trend. The event was delivered in partnership with AZA Finance. She also advised the need for companies to reevaluate the sourcing strategy and pay attention to getting local sources for their supplies. Elizabeth Rossiello, CEO and founder of B2B fintech company, AZA Finance also emphasized the need for cross-border payment platforms that intimately understand the nuances of the African market. Her insight underscored the complexities and costliness arising from the involvement of multiple intermediaries, bank charges, and the intricacies of currency conversions, which collectively create hurdles for African businesses engaged in cross-border transactions. International trade expert Dare Fadeji believes that policies targeted at addressing the regulatory fragmentation on the continent are critical in reducing fluctuating exchange rates and streamlining international trade. This will facilitate innovations that seek to eliminate intermediaries and expedite transaction speeds for a smoother cross-border payment landscape. The private sector plays an indispensable role in shaping effective cross-border payment solutions according to Nana Yaw Owusu Banahene, regional head of Africa partnerships at AZA Finance. He advocated for governments to empower the private sector to spearhead these initiatives, thereby driving progress in the cross-border payment landscape. Drawing from her expertise, Okafor believes that ultimately, collaboration is important in driving financial inclusion in Africa and widening access to cross-border payment services. While high transaction costs and regulatory complexities remain hurdles, the future of cross-border payments is one of tremendous growth and opportunity. As the continent’s payments ecosystem evolves, cross-border payments continue to hold the key to economic growth and innovation across Africa. This edition of TechCabal Live, ‘How can businesses reduce the cost of making payments across African borders’ was brought to you by TechCabal in partnership with AZA Finance.
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- September 4 2023
TechCabal Daily – Starlink is illegal in Zimbabwe
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Good morning Last week, we published an exclusive investigation revealing how a Ghanian fintech Float lost ₦5 billion ($6.4 million) of client deposits in risky FX trades. Read about Float’s jaw-dropping gambles here. In today’s edition Starlink is illegal in Zimbabwe Telkom Towers shut down. Again! The Blockchain Association of Kenya challenges the Digital Asset Tax Can Africans save now, buy later? The World Wide Web3 Event: The Moonshot Conference Job Openings Internet Starlink is illegal in Zimbabwe Image source: Zikoko Memes Selling or using Starlink in Zimbabwe is a crime. The satelite internet provider hasn’t officially launched in Zimbabwe yet, but that hasn’t stopped some enterprising folks from getting their hands on it. Moreover, because it is a satellite-based internet service, Starlink can be used anywhere. Even the country’s national broadcaster, the Zimbabwe Broadcast Corporation, has been seen using the service. However, on Thursday, the government warned that it is illegal to use or resell the service in the southern African country. What makes it illegal? Well, it turns out that Starlink is supposed to either get a direct license from the Postal and Telecommunications Regulatory Authority of Zimbabwe, buddy up with a registered public network in the country or make their users apply for private network licenses. But it hasn’t done any of that so owning or selling a Starlink kit could land you in some hot water. Zoom out: Starlink is illegal in South Africa too. Weeks ago, the country’s telecommunication regulator banned the importation, distribution and usage of Starlink services, pending the operators satisfying licensing requirements to launch the service. Get a working card from Moniepoint With the Moniepoint personal banking app, you get reliable payments every time and a card that always works. Enjoy seamless payments powered by the infrastructure that 1.5 million businesses trust. Download the app. Telecoms Telkom Towers shut down again Image source: Zikoko Memes Telkom towers were switched off again. Last week, the American Towers Corporation (ATC) shut it down because the telecom was defaulting on the site leasing fees. This led to service disruptions on the telco’s network. This is not the first time: In June, after receiving numerous complaints from customers regarding network outages, Telkom admitted that the issue was due to the shutdown of Telkom towers. This shutdown occurred because Telkom was unable to pay its debt to ATC, which was reported to be KES3.5 billion ($23.8 million). Why can’t Telkom pay? Per Techweez, the government of Kenya fully owns Telkom, and the debt is currently sinking the company. However, it has actively been on the hunt for an investor who can take on its KES7.2 billion ($49.4 million) debt. As a Plan B, they might just reach deep into the National Treasury’s pockets and bail out Telkom with public funds. Power your startup growth Join burgeoning entrepreneurs & innovators in Ghana, Nigeria, Senegal, South Africa, & Kenya to pitch your startup and unlock funding, mentorship, & growth opportunities at the 2023 MEST Africa Challenge. Apply today! . Crypto The Blockchain Association of Kenya challenges the Digital Asset Tax Image source: Zikoko Memes The Blockchain Association of Kenya (BAK) is blocking the new Digital Asset Tax (DAT). The new tax took effect on September 1, but the case will be mentioned in court on September 28. ICYMI: The Kenyan government introduced several new taxes in the Finance Act 2023, aiming to generate extra income of up to $2 billion for the country. Since July 1, the Finance Act 2023 has been imposing a 1.5% tax on the earnings of online content creators. As for crypto, the new law mandates owners of crypto exchanges to deduct 3% of the asset’s value as DAT. The red flags: BAK believes the tax is unfair because it’s categorized as income tax, yet it’s imposed on the gross value of the asset rather than on gains and profits. This means that even individuals in a loss-making position will still have to pay the tax. Beyond the issue of fairness, they are concerned that taxing turnover might deter digital asset trading and hinder progress in the sector. Unlock new opportunities for your business Unlock new opportunities for your business with Vesicash! Seamlessly expand into emerging markets using our secure, all-in-one and cost-effective payment infrastructure. Contact Vesicash via our website www.vesicash.com or reach out to our dedicated team at info@vesicash.com TC Insights Can Africans save now, buy later? Fintech is one of the vibrant sectors in Africa’s rising tech ecosystem. The sector received $1.45 billion in funding for 2022, a 39.3% increase from the previous year, 2021, and has seen massive acquisitions. According to an EY report, consumer lending accounts for 23% of fintech businesses, surpassing consumer payments which account for 17%. Consumer lending manifests across the continent through the buy now, pay later model (BNPL), giving customers instant access to products after necessary credit checks have been in made. Despite the rapid adoption of the credit-driven BNPL on the continent, concerns exist about the sustainability of the model, as it could lead to overspending, high interest rates, and debt traps for consumers. According to data from BVA Group, African financial consumer markets have a savings-first culture. Informal savings groups, known as “susu” in West Africa and “stokvels” in South Africa are a popular way to save money to make purchases. As a result, some fintech startups on the continent are digitizing this model as an alternative to the BNPL to embed savings into the online retail experience for consumers. With the model’s success in India and other emerging markets, startups in Africa are doubling down by enabling users to save up for desired items in bits, get discounts and avoid debt. Image source: TC Insights While the SNBL sub-sector is nascent, it has the potential to grow, given the long history of installment savings schemes amongst Africans. In Kenya, more than 1 million people have used SNBL products to avoid
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- September 2 2023
M-PESA to introduce standing orders as Safaricom strengthens its mobile money product
Standing orders are common in banking services but are very rare in mobile money products such as M-PESA. Safaricom’s M-PESA is set to introduce standing orders in an announcement revealed by the telco’s CIO George Njuguna. This will effectively make it the first mobile money platform with this feature, although standing orders are quite common in traditional banking and neo-banking products. Through X (formerly Twitter), Njuguna said, “This is the first initiative, where you will have standing orders on a mobile platform – the first in the world, and not just the first in Africa. We will use it in other areas such as health because we understand this economy to increase accessibility and affordability.” READ MORE: As M-PESA plans to enter Ethiopia, it faces a stiff rivalry from Ethio Telecom’s Telebirr Standing orders in M-PESA will be a great way to automate recurring payments or transfers. With a standing order, you can set up a regular payment to be made from your mobile money account to another person, business, or service. This can be a convenient way to pay your bills, rent, or other recurring expenses on time and without hassle. Possible implementation avenues M-PESA has grown to feature tens of products and services, covering payments, savings, and access to credit. For bill payments, M-PESA runs products such as Lipa na M-PESA and Buy Goods. This is one channel where users will likely be able to set up standing orders to pay for utility bills, rent, and other expenses automatically from their M-PESA accounts, and on specific dates. M-PESA also runs a number of credit facilities, including M-Shwari, KCB M-PESA, and Fuliza (an overdraft facility). Therefore, this is one area where standing orders will be key to ensure that loan repayments are done on time. READ MORE: In a move to support SMEs, Safaricom’s M-PESA increases daily limit to $3,400 Standing orders have traditionally been instrumental for savings and investments. Safaricom has similar products, including the aforementioned KCB M-PESA and M-Shwari for savings, as well as Mali, its investment product. It would be interesting to see how standing orders will be integrated with these services, as they can help in transferring part of a customer’s balance into investment or savings regularly. Last year, Safaricom launched a virtual card in partnership with VISA. The card is solely used for online payments. Kenyan customers can, for instance, pay for Netflix via M-PESA through this channel – and this is another application where standing orders can go a long way in settling payments without manual intervention every other time. Safaricom has not revealed when standing orders will be accessible to users. Implementation details have also not been disclosed. In the fiscal year ending in March 2023, M-PESA recorded 8.8% growth in revenue, reaching KES 117.19 billion ($816 million). These figures, however, fell short of the results reported in the prior fiscal year. Safaricom attributed this decline to macroeconomic effects. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
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- September 2 2023
Register for the X-Pitchathon 2023
African startups and MSMEs are always on the lookout for funding and opportunities that will help them scale on different levels. And thanks to several established businesses and corporations, the opportunities keep springing. The latest of the funding opportunities available to startups in Africa is the X-Pitchathon by X3M Ideas, an advertising agency headquartered in Nigeria, with branches in other African countries like South Africa, Zambia, Kenya, and Congo Brazzaville. The X-Pitchathon is an initiative by the Zambian branch of X3M Ideas to mark their fifth year in business. The X-Pitchathon aims to promote MSMEs in Zambia by fostering networks and providing scaling assistance. It’s a fantastic opportunity for budding innovators and small company owners to showcase their startups to industry leaders, gain fundamental skills, and possibly win prizes valued at over K1 million ($50,000) for their companies. Other prizes applicants stand the chance to win include a laptop equipped with Microsoft 365, MTN 5G router with three months’ data plan, and more. Terms to apply for the X-Pitchathon 2023 Do you have a start-up or business that you think is worth investing in? See the following terms to enter for the X-Pitchathon in Zambia. Only startups or early-stage businesses that have progressed beyond the ideation phase and are below 5 years old can apply. Applicant must be a Zambian citizen. Applicant must be18 years and above. How to register for the X-Pitchathon 2023 If you meet the above criteria, simply follow these steps to get started for it: Visit www.xpitchathon.com Submit a 60-second elevator pitch Provide your Zambian National ID Provide TPin certificate Provide your PACRA registration Provide a description and video of your prototype (if applicable) And that’s all. Please note that the deadline for submission of entries for the X-Pitchathon is September 29, 2023. Final thoughts In the vibrant entrepreneurial landscape of Zambia, this startup funding pitch competition stands as a beacon of opportunity, illuminating the path for budding Zambian startups and MSMEs to realise their dreams. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
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- September 1 2023
Exclusive: How Float’s lucrative but risky FX trades led to ₦5 billion in losses
When Jesse Ghansah cofounded Float in 2020, his definition of the problem his startup would solve was clear: closing the $300 billion liquidity gap for Africa’s small and medium businesses. But three years later, the company has dug itself into a hole with at least $6 million in unpaid deposits to startups. While the company’s original business model focuses on providing credit services to businesses, its recent losses stem from an unrelated venture. Float attempted to profit from Nigeria’s currency exchange arbitrage by completing trades on behalf of businesses looking to buy or trade the US dollar with the local currency, three people with knowledge of the situation told TechCabal. The company, which raised $17 million last year in a round backed by Tiger Global, sourced foreign currencies through third-party brokers who traded on the speculative currency black market and USDT, the cryptocurrency stablecoin pegged to the dollar. While Float profited from currency trading in Nigeria for the better part of the last 12 months, its fortunes turned after it became a victim of fraud in the unregulated and speculative market it attempted to profit from, the sources claimed. Two sources said that at least four startups have an estimated $6 million stuck with Float due to those trading losses. Jesse Ghansah, the cofounder of Float With co-founder Jesse Ghansah scrambling to remedy the situation, startups who used Float face a significant risk of never getting their money back. The companies involved declined to comment on the record for this story, while one startup spoke about an ongoing police investigation to resolve the issue. TechCabal made persistent efforts to contact Float’s cofounders, and while Jesse Ghansah agreed to a meeting, he did not take calls or reply to messages. An ill-fated deal In May, Float entered into a trading agreement with a firm looking to buy as much as $2.5 million of the greenback. Float agreed to make the trade using a fixed exchange rate of ₦748 to $1, according to internal documents seen by TechCabal. Float received the naira equivalent of the total sum, promising to remit the agreed dollar amount to the client’s designated bank account within two days. Float, however, was defrauded by its exchange merchant when it attempted to buy the $2.5 million worth of USDT. Sources said it successfully bought only $1.5 million of the digital currency and lost $1 million. In the unregulated currency speculation market, trust is fickle. And for large transactions, the wait time to complete a transaction could take a few hours, currency traders told TechCabal. During this window, there’s a high chance of getting conned. “No matter how many times you trade, every time you transfer naira, the wait time until the merchant releases the USDT to you is filled with anxiety,” said one trader who asked to be anonymous to allow them to speak freely. “This is a largely unregulated space; nothing will happen if the merchant doesn’t release the USDT after collecting naira.” The $1 million fraud put a hole in Float’s balance sheet, people familiar with its finances told TechCabal. Yet the company continued trading, agreeing to source US dollars for more clients. It suffered further complications in June when efforts by the newly elected Nigerian government to stabilize the exchange rate caused a 63% devaluation within a few days. Currency volatility persisted, causing the naira to slide to ₦950 to the US dollar on the black market. Float, with its promise to provide dollar liquidity to businesses within a few days at a fixed rate, became a victim of the volatility. Fast-rising rates meant it could not settle previous trades at the agreed value, people close to the company told TechCabal. Executives at two startups who requested anonymity declined to confirm how much money their transactions involved. Another executive at a startup who also requested anonymity confirmed that it held $3 million in deposits with Float. “The goal is to work with Float and get all of our money back,” he said. He added that despite the situation, his company’s operations are unaffected; “It’s important to state this hasn’t impacted our operations; we’re solid in terms of runway.” Other sources told this publication that Float is working on bridge financing and will present payment plans to its clients as it tries to salvage the situation; they also shared that Float’s investors are in the process of a forensic audit of the company’s finances. TechCabal contacted Tiger Global Management, one of Float’s investors, to understand whether it was aware of the situation but did not receive a response at the time of this report. Another investor who asked not to be mentioned confirmed that a forensic audit is in the works and that “the situation is being handled.” How lucrative but risky currency trading deals backfired Nigeria’s complex FX regulations and lack of liquidity mean that individuals and companies needing US Dollars must often get creative. On Airtel Nigeria’s earnings call in 2022, for instance, the company admitted that it repatriated cash from Nigeria but didn’t disclose how it moved the money. “It is not the Central Bank rate,” said Segun Ogunsanya, the company’s CEO. “We have used many instruments and options for upstreaming the money. Unfortunately, we cannot give you the exact average rate or any specific answer.” Needing the greenback is a common problem for Nigerian companies. Startups that receive funding in dollars may be reluctant to dip into their USD reserves to pay international clients, creating a business opportunity. Float helped source FX for these transactions by taking Naira from clients and buying USDT from traders and merchants–popular Nigerian financial services companies sometimes broker these transactions. The USDT is then converted into USD and transmitted to the designated account. Since anyone can buy USDT from merchants on platforms like Binance, sources familiar with Float’s business say the company offered two unique selling propositions: it reduced the exposure of startups to the markets, escaping regulatory attention from a hawkish Central Bank. It also provided clients
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- September 1 2023
How Moniepoint wants to win the retail banking market
Moniepoint, one of Nigeria’s biggest business banks, wants to replicate its success in agency banking in retail banking by leveraging its distribution strategy. On August 17, 2023, TechCabal exclusively reported that Moniepoint, the Nigerian fintech, has expanded into retail banking. The 8-year-old startup, which provides banking services to small and medium-sized businesses across Nigeria, is hoping to reach new customers by expanding its services into the personal banking segment. At a recent media parley in Lagos, the acting managing director, Moniepoint Microfinance Bank (MFB), Babatunde Olofin disclosed that the holding company, Moniepoint Inc. now processes payment transactions worth $12 billion with an average of 400 million transactions monthly. It is an interesting number when you consider that Moniepoint said it processed 1.7 billion transactions worth over $100 billion in 2022. According to Olofin, Moniepoint, formerly called TeamApt, has an “elastic infrastructure” that allows it to process huge volumes of transactions. Moniepoint’s latest bet on retail banking means it will compete in a field crowded by large banks and well-funded fintechs including upstarts Opay and Palmpay and the likes of Kuda, Fairmoney and Carbon who have built a significant presence in the personal banking space. OPay, for instance, claims to have 35 million registered users, while Palmpay says it has over 25 million users. Moniepoint is positioning itself ahead of further boom in electronic transactions. Industry data shows Nigerian digital payments is having its best year with an average monthly volume topping 818 million for the first five months of 2023. TechCabal Insights projects real-time payments could reach 9.7 billion transactions by the end of the year, almost double the figure from 2022. For Moniepoint, distribution is everything Moniepoint wants to replicate its success in agency banking in the consumer banking vertical. It is betting that its distribution strategy, with a network of offline agents, will attract customers into its fold. “In every corner of the nation, we have our representatives known as agents,” Olofin said. “Even in areas where we don’t have a physical bank presence, we are there. We call our agents ‘man bank’ because you can actually do everything you can do in a banking hall with our agents.” With over 1.6 million onboarded businesses and over 10,000 agents across the country, the fintech hopes to leverage its solid agent network to target retail customers. Moniepoint projects it will onboard at least 4.8 million retail customers over the next three months. It is basically betting that it can pull three new retail banking users from each of its business customers., To onboard people without smartphones, Moniepoint’s agents will help them open a personal account, and issue them cards that can be used to carry out transactions, Olofin shared. “With our spread of agent network, it is easy for them [customers] to approach the agents and carry out transactions without necessarily looking for a physical structure,” he said. Gamification for financial inclusion Moniepoint’s personal banking service represents an interesting foray for the Engineering-first company. To stand out in the competitive market, the company is relying on gamification. Thousands of users could win N2,000 weekly and a grand prize of N10 million when they complete certain tasks and milestones, said Ope Adeyemi, the company’s senior vice president of channels and sales tools. “Consumers are rewarded with coins on our personal banking app after they carry out transactions, and these coins allow them to take part in exciting weekly games such as Shuffle, Spin the Wheel, he said.” Moniepoint is betting that gamification will not only enhance user experience but also encourage customers to use the app and its accompanying debit card for transactions over cash. Have you got your tickets to TechCabal’s Moonshot Conference? Click here to do so now!
Read More- September 1 2023
“We are bridging Nigeria’s digital finance gap”- Moniepoint’s CEO
By Tosin Eniolorunda, Group CEO, Moniepoint Inc. Picture a restaurant in Ikeja, Lagos State, where a customer needs to make a payment after a meal. To make this interaction successful, two critical parts of the digital financial experience need to happen. On one side of this are businesses, like, in this case, the restaurant. Businesses serve as an important locus, collecting payments from millions of customers. By empowering businesses to collect payments and manage their finances digitally, great transformation is possible. But on the other side are the customers who need to pay these businesses, like the person who just finished their meal at this restaurant and wants to clear the bill. While these businesses can receive digital payments, the experience on the customer’s side isn’t very seamless. As a team, I’m proud of how Moniepoint has helped lead this evolution through our reliable technology solutions. We’ve been able to work with over a million businesses across Africa to power their dreams and we are still on this path. It’s not uncommon to find disputes between businesses and their customers, primarily because the current personal banking experience doesn’t give users as much control and reliability as they need. With businesses being a touchpoint for these customers, our initial approach was to give them the full support they needed. More than 33 million unique cards are used on our terminals each month—over half of all banked Nigerians. This shows how firmly embedded digital payments are in our day-to-day lives and how much change is possible through the businesses we initially focused on. But to truly improve the experience across the board, we need to extend our reliability to customers too. We’ve built a solid and reliable infrastructure for businesses. What if we powered their customers too? That is why we launched our personal banking product as part of our expanding suite of services. People are often promised high-quality personal finance, only to be let down by unreliable service and poor results, and they deserve better. We are offering consumers the same service relied upon by many businesses they’re familiar with. Too often, idealistic promises are made to users to revolutionise consumer finance. We bring a simple offer: a banking app and card that works. With our expertise in building banking infrastructure and experience providing banking services to businesses, we’ve introduced new solutions to personal banking. Dispute resolution can now be more easily managed and monitored, putting control in the hands of the consumers who use these services, as it should have been. This, in collaboration with the millions of businesses that use our terminals and banking solutions, guarantees unmatched reliability for users everywhere. We will build this up over time with new capabilities so consumers can make the most of our industry-leading service. We have been part of this country’s digital transformation since our founding in 2015. I have witnessed firsthand how society has changed for the better through financial technology, and I’m determined to make the most of the opportunities. As digital payments become more central to the financial experience in Nigeria, fintechs form the basis on which immense change is possible, and so much more can be explored. If people can pay digitally, commerce can thrive, and the ripple effect will be felt throughout the economy to the benefit of everyone. By stepping up to provide financial solutions for individuals, we strive to be the gateway to people’s financial happiness. Together, we can help consumers and businesses across Nigeria power their dreams as part of a brighter and more prosperous future.
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