Nigeria stays one largely Cash dominated country. There are over 100 million adult Nigerians of whom More than half have little or no access to financial services.
Today, Bankly, a Nigerian fintech startup that digitizes cash for non-banks, announced that it has completed a $ 2 million startup round. Founded in 2018 by Tomilola Adejana and Fredrick Adams, Bankly digitizes the informal thrift system known in Nigeria under different names such as esusu or ajo.
In the absence of a banking system close by or without considering such a system, the non-banks resort to these traditional systems as they operate entirely offline. The system allows them to raise funds and save with a thrift collector who is responsible for withdrawing funds when due.
howeverThere are problems with this system. First, the security problems that arise when the thrift collector goes missing with the money or is feared dead, leaving no idea where the savings are being kept. There is also restricted access where members cannot consequent Save when absent in a specific location. The third is the lack of customer data as most of them do not have an online banking presence.
What Bankly has set itself the task of digitizing the entire process of collecting money and enabling these people without bank details to save using online and offline methods.
In the past 18 months, the company has expanded its sales and agent networks. Here customers can deposit and withdraw cash with a cash Bankly Agent anytime. This solves the problem of access as there are thousands of agents in these cash dependent communities.
When the information of this new customer group is collected and Rescued on his platform, Bankly begins to build engaging communities in which these people can together Save your income with the agent. Slowly, an online banking presence is build for her.
With most of their money in a bank and little or no cash to buy airtime or make payments, they often chose to access these services online from their mobile phones.
Credit: Bankly
By integrating this new group of customers, they can save more and conduct transactions over time. This opens up access to credit and with more added value there is a new group of bankers, which in the long run leads to financial inclusion.
“The first phase is building agent networks, which is good, but that’s not the goal,” CEO Adejana told TechCrunch. “Straight In the same way that mobile integration happened, you need to focus on attracting customers who use it to purchase airtime or make payments after transferring cash to their mobile accounts. We call this the three-phase process. After this complete digitization, distribution takes place first and then the consumer. This is how we achieve financial inclusion. “
With his insights into customer behavior and transactions, Bankly also offers other service providers “Data-as-a-Service” in order to offer tailor-made products and services to Nigeria’s informal sector.
Bankly works like a traditional bank, but with fewer assets, revenues, customers and operating costs. However, since it doesn’t spend a lot of money acquiring customers and building a physical presence, it can pass these cost savings on to customers as interests and still generate reasonable margins.
Agents on the platform also receive commissions for every transaction a customer makes through them. Around this time last year, the company had just over 2,000 agents across the country. Now, has this number grown to 15,000.
The company continues to plan to add more agents with the newly received investment. To Increase customer base by 35,000 in cash-dependent communities, Bankly will also deliver products directly to consumers in the coming months.
LR: Fredrick Adams (CPO) and Tomilola Adejana (CEO)
In Bankly’s three year tenure, Adejana cites the search for the right partners, talents and most of the others important is, the right investors as challenges that the company has faced. Due to the nature of Bankly’s business, Adejana did not accept some of the investments offered to the company and only allowed in investors who agreed with the company’s plans for non-banks.
“We had to be patient to make sure we spoke to people who deep understand the problem and are passionate about solving it and not getting a return as soon as possible,” She said.
These investors include co-leads Vault, the holding company of VANSO, a fintech company that was sold to Interswitch in 2016. and African payments company Flutterwave. While both companies pioneered the technology banks enjoy in building payment rails, they did little to move the needle for the non-banks. With BanklyThere is a chance.
“Given our over twenty years of experience in the Nigerian fintech industry and previous exits, we have strong believe that Bankly understands the differentiated needs of this market – not to mention the team, strategy, and technology – to provide affordable financial services to non-banks. We are excited to participate in this financing round as Bankly goes into the next phase of growth, ”said Idris Alubankudi Saliu, partner at Vault.
This is Flutterwave’s first disclosed investment in another company. When CEO Olugbenga Agboola raised a $ 170 million Series C last month, he mentioned to TechCrunch that Flutterwave could look into some partnerships with smaller companies and potential acquisitions in the coming years. While the investment comes as a surprise, it’s not uncommon for startups to invest in other startups, especially those who might want to acquire them in the future – Stripe and Paystack, for example.
Other investors who participated in the round are Plug and Play Ventures, Rising Tide Africa and Chrysalis Capital.
Bankly The aim is to increase the customer base to 2 million Nigerians without bank details in the next three years. The aim is to support the Central Bank of Nigeria’s national financial inclusion strategy to increase the number of Nigerian bankers from 60% to 80% by 2020. A year later, this strategy still has to be implemented. But Bankly is working with these regulators on a more realistic target for 2025, according to Adejana.
“We are very pleased to have completed this milestone fundraising campaign and that such experienced fintech investors who understand the market are accompanying us on our way to the bank without bank details in Nigeria. Now we have set up the agent network and are ready to serve customers directly via offline and online channels. Partnerships, collaboration and a deep understanding of the needs of non-banks will be critical to our success, ”said Adejana.
In front BanklyThe managing director was an investment banker, but entered the world of fintech during her Masters degree in Sydney. Upon returning to Nigeria, Adejana worked on a product that offered small business loans He later joined the Accion Venture Lab, a program that focuses on products that promote financial inclusivity. It was there Bankly started.
The product has established itself well. And during tThere are many fintech products on the Nigerian market here that aim to reach the non-banks. Bankly remains one of the few who can bold make a claim on it.
In order to achieve real financial inclusion in Nigeria, Adejana believes that fintechs are required to have long-term views straight like the telecommunications and fast-moving customer goods in the past. This increases the number of customers that fintechs can serve rather than take a slice of it existing one. “For financial services to reach the last mile, this has to be the case be distributed in the same way fast moving consumer goods are distributed, “She added.