Feature: China-backed fintech startup contributes to financial inclusion in Nigeria
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E-mail Xinhua, September 30, 2021
by Olatunji Saliu and Guo Jun
ABUJA, Sept. 30 (Xinhua) -- A daily practice for John Chukwuemeka, an auto spare parts dealer in Zuba area on the outskirts of Abuja, Nigeria's capital, is to make quick financial transactions at an OPay agent near his shop, given that there are no commercial banks in sight around the market where his shop is located.
"I can't remember the last time I was in the bank," said Chukwuemeka, after he took several wads of naira (Nigerian currency) notes from the agent of OPay, one of the major fintech companies in Nigeria.
For Chukwuemeka and many other traders in the market, the OPay agent here enables them to deposit, send and receive money and pay bills at a safe and convenient way.
"When we close from work, we come here and [we] pay in our money and go home. This place is more like a bank to us. We do our transactions and we do deposits here," he told Xinhua at the yellow-painted kiosk of the OPay agent.
"We enjoy using OPay here," he said. "I have done transactions of 1 million naira (about 2,440 U.S. dollars) and 1.5 million naira here in a single day. I don't risk going home with cash."
FILLING GAPS IN FINANCIAL INCLUSION
For Joshua Yau, the chief executive officer of OPay Nigeria, the fintech startup has only tapped "the tip of the iceberg" in the financial service market in Nigeria, as there is still a huge deficit in financial inclusion in the country.
According to a survey by the Enhancing Financial Innovation and Access (EFInA), a Nigeria-based financial research organisation, only 64 percent of Nigerian adults were financially included by the end of 2020, while about 51 percent of Nigerian adults used formal financial services from banks, microfinance banks, insurance, or pension accounts.
The survey cited irregular income and "banks are too far from where I live/work" as the top two obstacles denying people formal financial services.
"As the biggest economy and most populous country in Africa, Nigeria is a market with vast opportunities for fintech startups," Yau said, noting that the OPay, started by a Chinese entrepreneur in Nigeria's economic hub of Lagos in 2018, has seen quick growth through filling gaps in financial services in the country.
Most of OPay agents and partner merchants (shops using payment system of OPay) were currently situated in areas where bank services are hard to reach, Yau said.
He said OPay, now with more than 300,000 offline agents and partner merchants and more than 7 million users of its mobile app, has seen monthly transaction volumes exceeding 3 billion dollars and become one of the top fintech companies in the country.
According to media reports, OPay has secured 400 million dollars recently during a new funding round led by SoftBank Vision Fund and other Asian investors, seeing the platform's value surging to 2 billion dollars.
Aside from the market potential, Yau said, the quick growth of OPay could also be attributed to China experience and technology and the localization strategy of the company.
"China's fintech companies have for the recent years served at least 1 billion population in China, and OPay could draw on successful experiences of its Chinese counterparts, and adapt them into the reality of Nigeria," he said, adding OPay's research and development team is currently based in China.
Yau said about 90 percent of managerial staff at OPay are Nigerians in accordance with the company's localization strategy, which could guarantee a better understanding of local market.
SEAMLESS FINANCIAL SERVICE
Sani Salisu, 37, has been an OPay partner merchant for 38 months and were among the first people to start using OPay services. He runs three shops selling daily essentials in Dei-Dei, a suburb of Abuja and also an area where banks are rarely seen.
Salisu said what attracted him to the platform was the "seamless service" the mobile money firm offers its users, especially those without a bank account.
With an OPay account on a mobile phone, users can deposit or withdraw money at an OPay agent or partner merchant to their e-wallets for free within seconds, and they could buy anything they want at OPay's partner merchants, or make transfers to e-wallets of other fintech companies or any bank accounts, or pay their utility bills.
Salisu told Xinhua he trusts the OPay payment system installed at his shops as so far he did not have any unresolved issue with the system.
"Over 200 people come to my shop every day for withdrawal and deposit. Sometimes, I get transactions of up to 7 million naira a day," said Salisu, adding that he is planning to start another shop with OPay payment system in his hometown in the Kaduna state, northwest Nigeria.
For Derrick Olanrewaju, the Abuja state manager of OPay Nigeria, the seamless service means frequent "field visits" by the OPay team.
"They had to go to the field to get people to apply for POS and for people to come on board. They now stand as an account officer to them. They ensure that these agents and merchants are doing transactions. If their POS is faulty, they follow them up to ensure that they get it fixed," said Olanrewaju.
Opay has created many opportunities locally, proving to be a force to reckon within the Nigerian informal financial sector, he said, noting what the OPay has been doing in Nigeria is to create jobs as well as promoting financial inclusion.
"This is now more like an employment opportunity that we have given out to people. Everybody who does not have a business doing can come on board," Olarewaju said.
Even when COVID-19 struck in Nigeria, with the government-imposed lockdown on people and businesses and many people losing their jobs, Olanrewaju said the firm still created opportunities for many who became agents for OPay and OPay's operation in Nigeria has been successful because of the "resilient spirit" of Nigerians, who strive to make good use of every opportunity available to them.
"Nigerians know how to 'hustle' and they have talents. No matter what the situation they face in the country, they do not give up. That is the reason when a new system comes on board, they adjust to the system and find solutions from it," he said, confident in the future of the OPay in the country. Enditem
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