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Business News of Sunday, 26 September 2021

Source: punchng.com

Finding capable, experienced hires in Nigeria challenging – OPay boss

Iniabasi Akpan, Managing Director and Country Manager for Opay Nigeria Iniabasi Akpan, Managing Director and Country Manager for Opay Nigeria

The Managing Director and Country Manager for Opay Nigeria, Iniabasi Akpan, in this interview with Sami Olatunji, talks about financial inclusion and the challenges of fintechs in Nigeria
What would you regard as the gap in financial coverage and inclusion for Nigerians, especially those in rural areas?

According to a 2020 financial access survey report by EFInA, about 36 per cent of the adult population in Nigeria are financially excluded and those most affected are in the rural areas.

These are people that are considered unbanked or have no access to financial services. Relative to several other African countries like Kenya, South Africa, and Rwanda, there is still so much work to be done to address gaps in financial coverage and inclusion in Nigeria.

In what ways are fintech spearheading innovations in the Nigerian market?

In the last 10 years, Fintechs have brought significant innovation to the banking and payment ecosystem in Nigeria. Before Fintechs, the potential of agent banking, apps, digital wallets, and payment gateways were only read and heard of in other markets like Kenya (mPesa) and other developed markets. Fintechs have been and are still at the forefront of bringing these innovations to Nigeria through investments in technology infrastructure, customer education, product/service innovation, creative frameworks, and business models. These efforts by Fintechs, have brought about convenience and lowered transaction fees for banking transactions being delivered to customers, which in the past were quite high and has additionally enabled access to financial services to so many people who were financially excluded or underserved.

According to a McKinsey 2020 report, there are over 200 registered Fintechs in Nigeria today driving innovation in payments, lending, savings, and many other sectors. Fintechs are already helping to boost the economy. Millions of people are gainfully employed in agent banking, software engineering, R&D, product development, and customer service. Past and recent capital raises and valuations of Nigerian Fintechs are clear indications of the impact and positive effects Fintechs can and are having on the economy.

In 2020 alone, Fintechs accounted for 44 per cent of total startup funding deals and leading experts project that the Fintech industry in Nigeria has a GDP potential of $50bn and can attract an additional investment of up to $3bn or more boosting the economy and delivering long-term economic impact.

How would you describe the Nigerian business environment?

The Nigerian business environment is full of so many opportunities but very challenging. There has been some progress over the years but Nigeria still has major challenges with network and technology infrastructure. Broadband and other network services are still not readily available or reliable in some parts of the country and are quite expensive. These have a major impact on the availability and reliability of banking and other financial services.

Government regulators like the CBN, CAC and others are doing a lot to improve the starting and ease of doing business in Nigeria but there is still some work to be done to improve our country’s ranking globally. Policy decisions by the government regulators have a significant impact on local and foreign investments.

Additionally, finding capable and experienced hires in Nigeria is quite challenging due to the state of our educational system and the brain drain Nigeria has suffered over the years. The insecurity challenges have also exacerbated the problems in the business environment, making it unsafe to travel across Nigeria as it was in the past hence it is challenging to develop and deliver access to financial services in some parts of the country.

What have been OPay’s biggest challenges and in what ways has the company adapted over time?

OPay entered the market in 2017 through an investment into PayCom Nigeria Limited, one of the early CBN Mobile Money Licensees. PayCom obtained its Mobile Money licence in 2011. Although PayCom was an innovative company and made some inroads in the B2B and B2C working with the likes of the Nigerian Bottling Company and Bet9ja in the early phases of go live, it was not able to drive scale in its agent banking, wallets, apps and cards business due to its limited financial capacity and business and technical resources.

Fortunately, OPay was interested in coming into the Nigerian market and saw the potential in PayCom and decided to acquire a major stake, rebranded, and commenced operation as OPay in August 2018.

OPay’s biggest challenge when it commenced was how to achieve scale and sustain it. In tackling the challenges, OPay brought innovation to product and service offerings, business models and pricing, strong engineering capability and resources, and finance to drive scale starting with the agent banking business where there were significant gaps in the market and saw it as the most critical building block to the delivery and growth of financial access and services in Nigeria.

The company quickly gained momentum through this. So to further drive adoption and deepen financial inclusion, OPay made efforts into ride-hailing and food services. However, due to the government ban and the COVID-19 pandemic, it had to divest from those areas and narrow its focus to payments.

OPay as a smart, intuitive, and innovative company has been able to adapt and navigate its way through the numerous challenges by understanding the needs of the market and customers and tailoring its products and services to meet them, leveraging on partnerships, technology, data, AI and social media. These efforts paid off and the company has had rapid growth and success so far in Nigeria and gradually, expanding to other African markets and the Middle East. In just 3 years, the company now has a valuation of $2bn and has some of the world’s major venture capitalists as investors.

What would you regard as OPay’s success so far?

OPay has succeeded in becoming a major catalyst for agent banking and mobile wallet services and the deepening of financial inclusion in Nigeria as CBN had envisioned. With about 400,000 registered merchants, our platform provides jobs and means of livelihood for so many families in Nigeria.

What are OPay’s expansion plans in the area of the product, tech and markets?

OPay intends to broaden its offerings to more millions of SME merchants in the Nigerian market, empowering them with the technology, business tools, and required use cases they need to accept and process payments. In addition to this, OPay plans to expand the scope of its wallet offerings by making the OPay debit card widely available to its over eight million registered wallet customers.

OPay recently launched in two new markets, Egypt and Pakistan. The immediate focus will be to develop our business activities in those markets.

What do you think the role of the government should be in the finance market?

In my opinion, the role of the government should be balanced. Government must act as both a regulator and an enabler. There must be regulation, otherwise there would be chaos which could pose systemic risks to the payment ecosystem.

At the same time, for the growth and development of the sector and economy at large, regulatory guidelines and policies should enable business innovation and foster healthy competition among operators.

I believe the efforts of regulators particularly the CBN so far are commendable. The CBN over the years has taken a positive approach to provide oversight and regulation by constantly engaging banks and payment ecosystem operators to understand the challenges and to formulate policies that sustain the progress that has been made so far.

The frameworks on the regulatory sandbox, open banking, and revised guidelines on Mobile Money Operations are recent examples of the CBN efforts to support the growth and development of the market.

How would you describe the future of the fintech industry in the light of emerging technologies?

The Fintech revolution is happening globally and is now transforming how banking and payment services are being accessed and delivered. Even regulators are not left out in the innovation, as several countries including Nigeria are at various stages of implementing digital currencies. So the future is very bright.