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Agency Banking Startups Moving To Upset Banking Giants

 

Agency banking is making a foray into the finance scene in Nigeria and it is beginning to take traditional banking by surprise.


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There is perhaps a note of jealousy when the banks declare their annual cash flow and the figures are much below what the likes of Opay, TeamApt’s Moniepoint, and Paga declare as their flow. With the exception of FirstMonie run by First Bank, the banks have not been able to successfully innovate on solutions that will improve financial access to the unbanked population in the economy.

None of Nigeria’s banking giants such as Zenith Bank, First Bank, GTBank is yet to reach the level of valuation seen by the FinTech unicorns in terms of transaction volume, in so little time.

TeamApt is fast rising into a $1 billion startup in the coming months as it prepares for another round of funding. Since TeamApt launched Moniepoint, a platform for agent banking, it has gone ahead to power thousands of Point of Sales (POS) kiosks where typical banking transactions – deposits, withdrawals, account opening etc are now performed in Nigeria using POS devices.

Founded in 2015 and Headquartered in Lagos Nigeria, the company has been building finance applications for banks. As of year-end 2018, the outfit announced it has processed about $160 million worth of transactions monthly by providing tech support for the financial operations of 26 banks.

TeamApt introducing the Moniepoint product into Nigeria’s agency banking ecosystem was a masterstroke that is currently fostering healthy competition in that sector.

To show CBN’s seriousness in Agency banking growth and regulation in the country, the apex bank created SANEF to oversee agent banking in Nigeria. Moniepoint being one of the licensed ‘Super Agents’ currently accounts for about 74% of the agent banking industry based on monthly transactions volume.


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In March 2021, TeamApt processed over N1trillion ($2.4 billion) for the first time, according to the CEO. The value for May was N1.4 trillion ($3.5 billion) from a base of 68 million transactions. The total value of transactions TeamApt has processed between April 2020 and April 2021 is $16 billion.

Tosin Eniolorunda, TeamApt’s founder and CEO, disclosed that Moniepoint’s transactions consist of 14 million unique customers monthly mainly gotten from deposit, withdrawal, and bill payments airtime.

Numbers for Opay from 2020 shows that the Opera-backed company declared processing $1.4 billion in October and upgraded to $2 billion by December.

Paga also experienced a spike in its numbers recently when its CEO, Tayo Oviosu, declared in June that they processed $2.3 billion in 2020 and 15 months to process a total N1 Trillion.

In comparison, Flutterwave, the first indigenous unicorn in Nigerian Fintech after Interswitch said in March that it had processed 140m transactions amounting to over $9bn since the company was founded in 2015. Flutterwave does not operate in the agency banking sector and this may have contributed to its lower transaction volume.

The imminent data from the agent banking sector shows that these startups are finding innovative ways to reach the unbanked population who are either in more remote areas of the country or have no BVN to conduct transactions in banking halls.

One thing is sure: the gargantuan numbers that these agent banking platforms are doing is a testimony that even if their transactions have not surpassed the average Nigerian bank yet, they will soon outshine the performance of traditional banks.

Featured Image Source: Youtap


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Macaddy is mostly a farmer in the day who also dabbles into technology at night, in search of other cutting edge intersections. He's on Twitter @i_fix_you

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