Salami Abolore is the Founder/CEO, Riby – A finance technology company that provide simple and smart finance management platform for corperatives to manage their members and financial activities. Riby was officially launched 15 months ago, supporting over 400,000 people, working with partners and banks. Riby platform has been used to originate over N7 Billion in micro-loans. Abolore had a chat with SEYE JOSEPH on issues concerning the fintech industry.
What is your educated opinion about the Nigerian Fintech space?
I believe the fintech industry is an enabler. It is the driver of increasing growth. Fintech will not do anything to the banking industry. What it will do is to expand the pipe. With fintech industry, many people will use banking services. That is what I see in the industry. Fundamental technologies like block-chain and digital currencies will create in-depth impact, but for fintech, it is just going to be an enabler.
Will Fintech usurp the place of traditional banks in service provision?
The world started trading by barter, but now we are using banking services. Just as the way trade by barter arrangement has changed, the same way financial services have also changed. Now the bank customers have financial services on their mobile phone and other gadgets. Whoever needs financial services, the services will come to the person. Technology has now made financial services possible for people easily. However, technology has not changed the place of the bank; because bank is not a structure. The bank is a system. The bank is a process of keeping value and transacting value. Where the value is kept does not matter.
If that is the case, who do you think should regulate the Fintech industry?
If there is a need to regulate the Fintech space, let government set up a Fintech Commission and allow the Nigerian Communication Commission [NCC] and the Central Bank of Nigeria [CBN] to administer the commission. The commission should create a fund. The Asset Management Commission of Nigeria [AMCON] should come up and say 5% of its asset will go into the Commission. Let government build a Fintech City and say that if anyone is interested in Fintech, come and talk to us.
Regulation lags behind innovation. Let the Fintech Commission be the sandbox that allows Fintech to operate. We want to do many things but there is no regulation. We need to find certain ways to make sure some of those things still fit within the law. For example, many people operate online lending using one unit Microfinance Bank license because the license says that you can operate from one building. Establish the Fintech Commission to solve some of these challenges.
One of the challenges is how to bring the unbanked into the formal financial system.
Banking in its original state is not design to promote people to bank or to promote trade. Due to poor infrastructure in the country, banking is designed to help people who have made money to make more money. If I have a choice, I will keep my money under my pillow because the bank charges me for keeping my money in the bank. If you go to the other climes, interest rates are low and if interest rate is low. However, if interest rate is low in Nigeria, how the banks survive? The banks generate power, security, etc
The fundamental solution is to fix the government. The other alternative is to rely heavily on technology. The cheapest technology is Interactive Voice Response [IVR]. USSD is close to that. We should have IVR, and a universal number that is powered by the federal government. We can then do all our banking transaction by calling a number. Say your name, BVN or national identification number and you have banking services. That is it.
However, the education gap is too wide in Nigeria. Having IVR would mean working with all the telcos, create a national IVR toll free number, may be the same number as USSD number. It is as simple as that. There can be a Fintech in Nigeria. It is like opening a car wash. All the Fintech would do is to make sure Fintech services are available to everybody in the village.
How does Riby plan to bring the unbanked onto its platform?
The key thing is ability. Let us go back to the fundamentals. I want a transaction. I call my account officer that I want a transaction. Type the code from my bank. Transaction is done. I have not visited a bank. I have not signed a cheque. For the user of our system, the cooperatives, their members and the banks, the ability to be able to use the system in whatever form is convenience. That’s one of the key things we are investing in for now. We are working with the telcos. We want to make IVR services available. For us, it is still the best usability to the system. Another side to it is angel network. It is extremely important. The bank is now on the streets. Deepening all the services and using it as an avenue to create jobs.
So how would this get Riby’s services to 20 million customers in five years?
More than 20 million people are already doing this across the continent. For us, we are going to be the leader. In terms of how we think our products and how we structure our partnership that will be beneficial to everybody. We want to open a platform that will enable everyone to come together. We want to make sure that everybody in the value chain is well compensated. It is going to be a lot of work to do but it is achievable. We just have to have a value proposition that is compelling enough. The two solutions we are pushing across are access to finance, and a better finance. When we can prove that to the minimum people that have used our system and become a lot better, the testimonial is going to speak for itself.
How does Riby overcome identify fraud?
Riby is really on industry standard API. We work with the banks. It is critical for us to do BVN. Our partners have their standards that we follow. As long as the customers BVNs are correct, we know our customers. If you do not have BVN, please go get one.
So, should government seize bank accounts without the BVN?
The truth is that most of these accounts are not fraudulent. For instance, my sister lives in the UK. She has a naira account and she has not returned to register for BVN. Now government’s intention will force her to come out and claim the account. We should be ready to do what we need to do in Nigeria and move forward. Let us stop dancing on one spot for years. Government should not spend or seize the funds in the accounts without BVN. The fund can be invested to fund Fintech, Agrotech and give the money to the owners when they come to claim it.
Tell me about your partnership with Microsoft?
I met Microsoft executives in Nairobi and convinced them that we need their support. Then, we had 150,000 users. Today we have 470,000 users. I saw an indication that greater things were coming and that we needed some kind of institutional support. Then Microsoft came to support us with agents, volunteers, and innovation grants. It supported us in terms of programs we had in the states, gave us certain resources to use that for our core services without paying for it. Microsoft will pay for it for a period of time.
We are building agro database for various states based on the agro cooperatives in those states while the states receive all the agricultural produce and resources. This kind of things requires certain kind of analytics, which Microsoft will power and host on Microsoft cloud. Microsoft will also help to raise investment.