Key Investments Are Strengthening Fintech Startup Market in Nigeria
Nigeria is fertile ground for financial technology entrepreneurs. The majority of Nigeria’s consumer base continues to be underbanked, a reality that has created a $5.5 billion market for cooperatives. According to Efina Access to Financial Services, the total cooperative and trade group savings market across Sub-Saharan Africa is roughly $10 billion. With such potential, it only makes sense that forward-thinking investment firms would get in on the game, which is exactly what Microtraction is doing. In late October 2018, they made an early stage investment in Riby, a fintech firm that is developing software for cooperatives, credit unions and trade groups in Africa. Riby is delivering fintech products for Nigeria’s underbanked consumers and it will play a significant role in building a sustainable economy for another country in sub-Sarahan Africa.
Microtraction’s Goal is to Strengthen the Economic Foundation of Nigeria
The investment in Riby is part of Microtraction’s long-term strategy to bolster the cooperatives marketplace. Dayo Koleowo who is the principal investment officer at Microtraction said that even though thousands of cooperatives have existed in Nigeria and across Africa for decades, the industry remains stifled and unstable. Cooperatives fail to make use of the latest technologies, still conducting business on paper, with very little use of banking platforms. He added that if the cooperatives industry is to weather the tides of worsening economies, they must improve their management, be more transparent and use technology, chiefly digital banking platforms. The investment in Riby is intended to address these deficiencies.
The Riby Banking App is Highly Successful
Riby has designed a cloud-based core banking app that cooperatives can utilize to automate their entire operation. Launched in 2016, banking partners have already originated more than 100,000 small loans of around $150 each. Riby’s app and basket of cutting-edge tools such as a credit scoring algorithm and data analytics are making them increasingly attractive to corporate partners, resulting in millions of new users this year. Microtraction executives say that their long-term mission is to fast-track Africa’s emergence among the developed nations. By investing in financial technology platforms such as Riby, Microtraction is helping to develop a sustainable economy that is entrepreneurial, technology-driven and financially leveraged for the benefit of all of Africa’s consumers.