Banking BPYR

By pjain      Published July 16, 2021, 9:55 p.m. in blog Startups   

BPYR

--- Banking for the Unbanked

Nigeria remains a largely cash-dominated country. There are more than 100 million adult Nigerians, of which more than half have little or no access to financial services.

esusu Africa

Bankly is digitizing the informal thrift collections system known with different names such as esusu or ajo in Nigeria. In the absence of a banking system nearby or a disregard for one, the unbanked resort to these traditional systems because they work completely offline. The system allows them to collate and save cash with a thrift collector responsible for disbursing funds when due.

Technology Enabled EZ Mobile Access and Onboarding

With most of their money in a bank and little or no cash to buy airtime or make payments, they would frequently opt to access these services online via their mobile phones.

EZ Onboarding these new set of customers means they get to save and transact more over time. This opens up access to credit and with more value created, there’s a new set of banked people, which leads to financial inclusion in the long run.

Giveaways of Tiny Money to gain an edge - PayTm Recharges

Security Issue

However, there are issues around this system. First is the security issues that arise when the thrift collector goes missing with the money or is feared dead, leaving no clue where the savings are kept.

Access, Distribution

There’s also limited access where members cannot consistently save if absent from a particular location.

B ankly is building out its distribution and agent networks. Here, customers can deposit and withdraw cash with an agent any time. This solves the issue of access as there are thousands of agents in these cash-dependent communities.

No Credit Data needed to Build a Credit Ecosystem and allow Loans to a BM$

Lack of customer data since most don’t have an online banking presence.

What Bankly has done is to digitize their whole process of collating money, allowing these unbanked people to save using online and offline methods.

When the information of this new set of customers is collected and saved on its platform, Bankly starts to build engaging communities where these people can collectively save their income with the agents. Slowly, an online banking presence is built for them.

With its insights into customer behaviour and transactions, Bankly also provides “data-as-a-service” to other service providers to offer tailored products and services to Nigeria’s informal sector.

BM$ Monetize by Full-Cycle Transactions

You need to then focus on acquiring customers who, after transferring cash to their mobile accounts, use it to buy airtime or make payments. We call that the three-phase process. The distribution first, then focusing on the consumer, after that full digitization. This is how we reach financial inclusion. -- Bankly

Refs

Africa banking

Bankly $2m VC

Bankly, a Nigerian fintech startup digitizing cash for the unbanked,

Nigerian fintech of the unbanked Bankly raises $2M led by Vault

Founded by Tomilola Adejana and Fredrick Adams in 2018, Bankly is digitizing the informal thrift collections system known with different names such as esusu or ajo in Nigeria.

Before Bankly, the CEO was an investment banker, but it was during her masters’ program in Sydney she got into the world of fintech. After returning to Nigeria, Adejana worked on a product that offered loans to small businesses, then later joined Accion Venture Lab, a program focused on products that foster financial inclusivity. It was there Bankly started. The product has caught on well. And while there are lots of fintech products in the Nigerian market pitching to reach the unbanked, Bankly remains one of the very few that can boldly stake a claim to that. Due to the nature of Bankly’s business, Adejana didn’t accept some of the investments offered to the company and only let in investors who aligned with the company’s plans for the unbanked.

These investors include lead Vault, the holding company of VANSO (a fintech that was sold to Interswitch in 2016), Plug and Play Ventures, Rising Tide Africa and Chrysalis Capital. “Given our over 20 years of experience in Nigeria’s fintech industry and previous exits, we strongly believe that Bankly understands the nuanced needs of this market — not to mention the team, strategy, and technology — to succeed in bringing affordable financial services to the unbanked. We are delighted to participate in this financing round as Bankly moves into its next growth stage,” Idris Alubankudi Saliu, partner at Vault said.

Bankly aims to grow its customer base to 2 million unbanked Nigerians over the next three years. The goal is to support the Central Bank of Nigeria’s National Financial Inclusion Strategy of increasing the number of banked Nigerians from 60% to 80% by 2020. A year on, that strategy is yet to be actualized. But Adejana says Bankly is working with these regulators toward a more realistic target of 2025.


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