Thread by @asemota

Very Unpopular Opinion and likely to be stoned for this:

Fintech founders MUST have some experience in banking or financial services background first before they are funded.

Many fintech neophytes destroy so much value not out of deliberate actions but just pure ignorance.

I am on the advisory board of a friend's company that he runs with his son. The father is an accountant who has run the largest leasing company in West Africa. I see the difference between what they do and others I also chat with. I see it in founder updates as well.

Again, any founder selling to investors in updates has lost the plot and is covering up. Updates are for letting everyone know the reality and not a marketing document. Lack of experience causes this. Bankers in credit/business master presentations because they live and die by it

When an ex-banker does updates, you see the difference. They also understand markets better and know precisely where opportunities lie. I give bankers a lot of heat here because as an institution they are useless. As individuals, some really excel.

When my friend Deji was in banking, he never chased targets, he doubled them. He was a star. When he decided to do something tech-related and niche in investments, he became a millionaire practically overnight. Bankers also know where the bodies are buried and avoid them.

Being an African banker in credit was what made my uncle a great entrepreneur. If I have any regret at all, it is not working from the trenches in banking. I kept seeing it all from the top. They bottom is where the brutal truth is found. Many fintech founders are delusional.

Especially those giving out money to strangers based on some stupid score. NPLs were going to come. I told a founder once that they were giving credit to those the market had rejected and competing with zero-percent interest loans within informal supply chains. He didn't get it.

In Africa, efficiency is not the problem. Quality is the problem in fintech and financial services. Solve for quality and efficiency will follow.

This thread is about Africa. Other places where there is already a foundation have the luxury of building efficiency on it.

I believe that the quality problem has been solved crudely by markets. If you look closely enough, those are where the true local fintech opportunities lie.

Many are bleeding money but a few who get it thrive. Why? They built on that quality the market has found.

We have an aggregation of quality customers problem and NOT a financial inclusion problem. Those you think are excluded need something different. Quality traders and business people in Africa don't struggle because they are supported by communities of other high-quality people.

Bring out this quality and the rest of the market will aspire to it.

That is what African banking has been doing. For fintech to win, it must use the same playbook for markets and look out for those who are on an upwardly mobile trajectory. Fintech isn't a saviour platform.

Bankers do business in Africa. Many fintech founders do playing to the gallery.

Ignore the noise. Be like bankers today.

*The bottom.