Tola Profile picture
14 Sep, 10 tweets, 3 min read
Reading a @TechCabal’s article and intrigued with some figures, which confirm massive role Fintech & digital payments will play in Nigeria’s economic future. Let me share some:

1. Between Jan - June 2020, GTBank processed $356.4m USSD payment & added 600,000 new USSD customers.
2. Mobile & Internet Banking: Jan - June 2020, GTbank processed 95 million mobile banking transactions worth ₦5.7 trillion, and internet banking transactions grew 14% to ₦1.2 trillion.

3. Nigeria’s fintech revenues is predicted to grow to as much as $543.3 million by 2022.
4. Nigeria’s payment market is estimated to grow between $20 billion to $40 billion over the next few years.

5. In August 2020 alone, NIBSS Instant payment (NIP) transaction volume was nearly 200 million with total transaction value of almost ₦15 trillion ($38.9 billion).
Makes sense why more banks are aggressively venturing into fintech & digital products (GTbank even wants to set up a standalone payment entity), but my guess is that most players are still contending for the same market (banked, economically active and providing more convenience)
The real winner in all of these will be the product that succeeds at achieving in-roads with underbanked or unbanked

My theory is not to focus on banking them but rather on enabling and facilitating the transactions (economic activities) of underbanked or unbanked.
Given present economy, makes no sense to try to provide banking services to a person so poor they won’t want to pay any banking charges.

However, there is value in facilitating their economic activities & collecting a convenience charge (which they would have paid for transport)
So maybe we simply need to rethink how we approach/communicate financial inclusion.

Rather than penalizing cash transactions, what if we incentivized digital inclusion by communicating the economic value of digital transactions to the unbanked/underbanked. Mpesa did it in Kenya
Most important part will be designing financial products that digitize the present economic activities that underbanked/unbanked engage it, but at increased convenience & marginally lower cost.

This will involve moving from present banking activities to actually designing value
This is not an assumption that it will be easy, but simply an acknowledgment that we need to rethink our financial inclusion approach.
For those interested, this is the referenced @TechCabal article written by @IAtalkspace
techcabal.com/2020/09/14/gt-…

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More from @adetolaov

14 Sep
Regulation on crypto-asset in Nigeria

Nigeria’s SEC in a recent regulatory statement stated it classifies virtual crypto asset as securities (under s.13 of Investment securities act).

Meaning SEC has powers to regulate crypto asset investments (e.g crypto-token or crypto-coins)
The statement defines issuing crypto assets as a regulated activity & specifically lists:
⁃Initial coin offering
⁃Digital asset token offering
⁃Security token offering

Gives existing digital offering 3 months to submit documents for initial assessment or registration
Who is regulated?

1. Any person, (individual or corporate) whose activities involve any aspect of Blockchain-related and virtual digital asset services (They must register with SEC)

2. Issuers or sponsors (start-ups or existing corporations) of virtual digital assets
Read 12 tweets
17 Aug
Quick observations for fintech businesses/digital banks from financial results of Monzo, Revolut & Starling

Lesson 1: LENDING HURTS. Starling earned 2.1m from interest but has 2.2m in bad loans. Monzo has an even riskier loan portfolio.

Thread
Lesson 2: card transaction fees still makes up a large portion of the models for the 3 digital banks - about 63% of income for Revolution, 55% for Monzo & 45% for Starling.

So earnings are not so diversified as card transactions fees is main earner. This is a major income risk.
Lesson 3: The Starling model of having a marketplace for vendors to sell their services doesn’t seem to be yielding great results. Starling only got a commission of £72,000 for period.

If the model is going to survive, volumes have to go up for commission to be worth it.
Read 11 tweets
11 Aug
From August 20, Online car hailing business (Uber, Bolt etc) must pay Lagos state a fee of NGN 10 million for every 1,000 cars. Annual renewal fee is NGN 5 million.

10% of EVERY transaction paid by every passenger will be collected by Lagos state as service tax.

IT GETS WORSE!!
The Companies must give Lagos state access to your Data and their entire database (section 4.2 of Guidelines).

The companies will push the 10% service tax to customers so the price of trips will increase.

These companies must still pay company income tax by the way.
@TechCabal reports the Guidelines for online hailing business operation of taxi in Lagos state 2020 (which created this rules) has been approved by the Governor

These rules will also make it hard for new smaller entrants into the industry.

techcabal.com/2020/08/11/gui…
Read 9 tweets
7 Aug
BIGGEST REFORM IN NIGERIAN CORPORATE LAW:

Today, the amended Companies & Allied Matters Act was signed today by President Buhari.

Key reforms:
1. A company can now have only one shareholder
2. No need for company seal anymore
3. Incorporated Trustees (NGOs) can now merge

1/4
4. Prohibits anyone from serving as director in more than 5 public companies
5. Electronic filing, share transfer & e-meetings for private companies
6. Introduces Limited Liability Partnerships (LLP) & Limited Partnership
7. Small companies no longer need to appoint auditors

2/4
8. Authorized share capital replaced by minimum share capital
9. Provision for virtual Annual General Meeting
10. During incorporation, applicant can sign their statement of compliance (no need for lawyers)
11. Private companies no longer need to appoint company secretary

3/4
Read 5 tweets
28 Jul
Let me tell you a story about @OlumideAkpata, candidate for @NigBarAssoc president. In 2018, we had negotiated #AfCFTA & I was moving to Geneva to work with King & Spalding LLP to design Nigeria’s 1st trade remedies infrastructure to protect the economy. One evening, I got a call
Mr @OlumideAkpata , then chairman of the @nbasblofficial , had come into Abuja few days before I was to travel and wanted to speak with me. We met up. He told me, “Our conference this year is on the #AfCFTA & because you worked on it and know it, you should help with direction”
We sat in the Hotel lobby at 10pm and spoke for over 4 hours on conference topics, discussions areas, speakers, break-out sessions and the role of lawyers in the AfCFTA. For context, this was a partner in one of the most successful law firms in Nigeria and I was this young lawyer
Read 9 tweets
5 Jul
Congratulations to everyone who just passed the Bar exams. After 5years (more or less) + 1 year of law school, you’re now a lawyer.

Here are some pointers on how to maximize your law career. This probably also applies also to any young lawyer.

A thread.
You are only as relevant as you can solve the problems of your clients. People just want their problems to go away, they don’t want to read a 30-page opinion on the legal meaning of “shall” and “may”. Build your career around solving real problems for people & businesses.
Don’t be in a hurry to specialize. Experiment with different areas of law. You never know what you will find interesting or be extremely good at till you try. This is one advantage of a big firm, it gives you the chance to try out a lot of things early.
Read 25 tweets

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