Discussing Fintech and Access to Financial Services in Nigeria with Abolore Salami of Riby

Interview with Abolore Salami, Founder and Managing Partner at Riby

What is your vision on the sector related to fintech? How do you assess the global market trends? What are the key points that are important to the system and the Nigerian ecosystem?

I grew up in Nigeria, the Giant of Africa, and then we lost it and we became the scum of Africa. But we are slowly getting back to being that potential Giant of Africa again now. Fintech is showing what is really possible, what Nigeria can really do. In the last two to three years, fintech and tech generally has produced more good news, bosses, global awareness and more excitement for Nigerians in Nigeria, in the diaspora, and even for Africans. A lot of Africans that used to not like Nigeria are all very excited about using Nigeria as an example. Interestingly, our music has also been a great export tool for that popularity – Davido, Wizkid, Burna Boy, Tiwa Savage or Yemi Alade. The two industries I am excited about are our tech industry and our music industry. The banking industry and the telecos build the foundation upon which all of these things have been built. But imagine what we can do now: that Paystack can now accept Apple Pay, Flutterwave is implementing PayPal, when only one bank was able to implement PayPal in Nigeria. Imagine that with PAPs and with several other things coming up, we can increase inter-African trades. I had a project and a partner once in Kenya where they were supposed to get $100,000. The project was in Naira. This was during the days of 100 and something Naira to $1 and then it went to 200. By the time the payment was ready, the amount they were getting was not $50,000. I did not reduce their money, Naira dollar did. Imagine if we did not have to rely so much on the dollar. Fintech, tech and where Nigeria is, right now is making all of this possible so that young graduates can aspire to increase their income by 5 times in 2 years by just joining the tech industry. I have seen people go from a $250 per month salary to a $3,000, $4,000, $5,000 per month salary in a couple of years. Even in our company, and not just in tech, one of our finance people recently got a job in New York working from here in Lagos and she is very smart. She has been doing a lot of ad work so we are very excited about that. There is a lot of opportunity coming up. Technology is a big leveler. Technology does not care where your address is. It just cares that you can get the job done and you can do it well, and it rewards you well. The better you can do it, the more you can do it, in Nigeria, across Nigeria, beyond Nigeria, and around the world, the better rewarded you are. Technology is going to create 10 times the kind of impact that the new banking industry created in Nigeria.

What are your key competitive advantages and how do you distinguish yourself from the competition? What do you bring to the market?

What helps us stand out is really the mission of the business. Our name, RIBY, actually means “Riches in Babylon For You” and we are driven by the idea of enabling collective growth, building a system where everybody can prosper – not just a few people who already have money – but how do we go a little bit further and help people who do not have money, those who have not created a system of wealth? It is a longer term vision. It is more painful. It is not as easy as just helping people do savings. I am not belittling that work. It is a lot of hard work, but there is a lot more to be done. There are 90 million people that cannot save, 90 million people that will not qualify for credit. There is porosity in the system and that is what sets us apart in terms of the vision that we carry and that is what guides the kind of products that we work on or the kind of business that we support. We have been more B2B in the past few years than B2C. That might not change drastically. We are going to continue to be B2B, but we are going to also eventually improve how much of B2C we do because we know that B2C is where we control what is happening in the last mile. That is what sets us apart – the vision that we carry. I am willing to spend the long term to execute that vision of how we can help 10 million people, maybe more, build a sustainable system of wealth creation and wealth preservation. A product we are working on right now, for example, is purely for small businesses and how can we make it easier for small businesses to run and be successful. There is more that needs to be done to help people create wealth and to help people preserve that wealth that is created, wealth creation, wealth preservation, and fundamentally a vision around people owning homes. It has taken us a long time to build the foundation upon which we now want to build the rest of our business.

What products do you bring to the industry?

Riby is Nigeria’s foremost digital platform for cooperatives and trade groups. We help members of these groups access financial services like savings and loans through our platform. Our aim is to help millions of Africans achieve better financial access and stability.

There are three major products that we already have in the market today that have served millions of people. These products put us in a unique position in the market. One of those products is designed to help multiple people in various groups effectively run their own bank. You can jump on our product today and you can start managing your savings, start running loans for yourself, start making your own investments without the need to spend a lot of money on technology. One of the employee banks that use our products is the CFAO Group. Their Nigeria business has an employee group that has done hundreds of thousands of dollars in savings and loans to their own employees, run by themselves. Before they started using our product, some of the employees had a problem tracking their savings or applying for loans. But now, you just bring out your mobile phone and with a few button clicks, you see your savings, you can make a request for a loan, and the process is extremely easy. They have not spent more than $3,000 in four years on annual subscription fees. There is a mobile app, a web app, USSD, banking payment services – all of that without having to build a single line of code for less than $5,000. You cannot get that anywhere in the world. One million of those groups can exist. Each of them does not have to worry about the cost of building technology, integrating to telecommunications companies, integrating to multiple services, AWS, email servers, SMS servers, etc. Imagine the sheer amount of work that each of those groups will have to do if they are to create their own technology or digitize their own bank. I will digitize that bank for them in 10 minutes and they can be up and running. Another product that we have created that is really distinct is a product that has helped the likes of the Bank of Industry in Nigeria and now we are working with Sterling Bank and the World Bank to automate microcredit to all of Kaduna State micro businesses or small businesses. This type of product has served 3 to 4 million people now on the continent. It is very scalable. If, for example, the World Bank, African Development Bank, United Nations, the Nigerian government, or anybody with capital says they want to help 10 million people on the continent, first, they do not have the last mile operations for that. They are not a bank. They do not have the technology for it because they are not a technology company. We have built up all of that capacity or that capability and in a couple of days, they can plug into that and they can reach millions of people in the country. We plan to replicate this across the continent. Those unique products we build make it easy to do things like this.

Do your clients come directly to you or do you find them through a company or association?

I shifted focus to 80% to 90% of our work in the past couple of years because we added a lot more requests from that side of our business in the past years and it required less capital to build. We thought that it made more sense to focus on that for a few years, get that right – which we have now done – and then be in a position where it is easy to scale that before refocusing or reintroducing our retail business. Late last year, we started our retail agency banking platform and we were already doing a few million dollars in transactions there in less than a year. We also introduced our individual products which individuals can then join directly. Currently, they are either being served by us through a company or development finance division or a government agency or by us to your group. In the coming months, we will do a lot more direct to consumer services.

What are your projects and plans for the short term, the next few months?

In the short term, one of the things we have done is structure our business correctly. We used to be just one entity doing everything but we are now separated into two very clear units. We have our enterprise business, the RDS, and our enterprise business, which is now going to be called Radeus Business and is coming out soon. That will be focused very squarely on large and small businesses. We are not serving customers there at all. We are going to be serving businesses, working with Development Finance Divisions, the World Bank, Bank of Industry, the Development Bank of Nigeria, government agencies at the state, federal, local level hopefully across the continent. On the other side, we are working on a product for small businesses where with all the relationships we have built in the past 3 to 5 years we will be bringing into this space. We are very confident we will do a lot of good for small businesses helping them access credit and helping them run their business better. If the World Bank wants to help 10 million small businesses, we will be the first place they will come to because we already have that. Our retail business primarily has two products. For our group banking, we are going to continue to expand and we will be introducing individuals into that mix. Our agency banking business we want to also expand on. There are two different teams with very experienced executives and managers running the two businesses which are poised for growth. Now, in the broader sense, we partner with a few other fintechs to expand the range of services that we are able to do and to be able to attract much more capital. We are doubling down on where we are for our enterprise business and for our retail business. We will be launching in Ghana and Kenya within the next six to twelve months. With the particular small business bureau we are launching, we want it to be a truly African product so we are going to be launching in all three markets at the same time.

Are you open to partnerships? If so, what kind?

We have done quite a bit of partnerships in the past in many ways from technology partnerships to deeper than that. For example, we currently support a business in the agri-technology space very closely, even putting in cash to execute some type of market penetration of products together. We are doing some work with Mexico. We have done work with a FINA UK, the studio family DFID, a B2B e-commerce company to expand how mom and pop shops get access to financial services. In some of these projects, just knowing how or where the distribution and expansion needs to move, we have put some of our own cash into the projects from a customer acquisition and onboarding standpoint. The biggest area of partnership that we are looking at in the near future as far as small business products is working with audit firms, accounting firms, law firms, digital marketing firms, regulators, tax authorities, etc., because we understand that for businesses to be financially successful, we must think of the individual and the family as an important economic unit. If you come to a country like Nigeria, or a place like Africa, the small business is also a very important economic unit. If you create 40 million MSMEs in Nigeria, if you can help 10 to 20 million be very successful using technology and access to financial services, you would have done a lot of good. We are going to do a lot of partnerships across the continent to ease the process of doing business which is very important to the process of creating wealth.

Are you selling a niche product in your area or are there competitors who also sell this product?

There is competition. One of the big things that really separates us from competition, and in terms of how we think about competition, is that we think less of the competition. We do not think less of the competitors, but we think less of competition. We think more about what value we can create and how we can position our product in the market to achieve it. In fact, we think that competition is great. We love our competitors. We love what they are doing. The reason is because of our mission. Of course, we want it to be only us on the market. It is all or nothing. We think that our competitors will serve 5 to 10 million people, but there will be 90 million more people to be served. So, there needs to be 10 successful companies serving the market. We are also finding a way to be better than competition where we need to by being more collaborative in our approach. We are more technology focused now than financial services focused. While most of our competitors are offering financial services, we are offering technology and systems integration. We tell our partners to bring their loan products and their savings and investment products. We will bring the customers and the technology to make this all work together.

What is one of your success stories that you are most proud of?

I am proud of the impacts that we have worked with our partners to achieve. No one has done more than we have from a technology standpoint in reaching millions of Nigerians. Our solution has since onboarded by 8 million Nigerians and has supported them in terms of how they access development finance and financial services. We intentionally want to stay at the back in terms of reputation and talking about us, but we build the technology that makes quite a number of those programs successful. For example, right now we are supporting over 30 states in providing financial services to small businesses. This is going to impact thousands of small businesses in the country. These are things that we have learned a lot from and they have positioned us to take the market.

What is your goal for the company in the medium term? What do you want to have achieved in three years’ time?

In 3 to 5 years, Nigeria will be bigger, the banks will be bigger, the banks will be happy, we will support them a lot more. More importantly, we would have created a new financial system that makes it possible for businesses to thrive, for access to finance to be available for everyone. A number of people are also working on that. But for us, specifically regarding business now as a single and multiple unit, you will be able to in one place get access to all the financial services that you need. We have the licensing for it. We have about 8 licenses already in infinity cloud. We have the track record for it and the reputation for it. Licensing alone has cost over $10 million in terms of capital adequacy and just getting ready. Over the next 1 to 2 years, we will be able to do every financial service you can think about. There will not be any hindrance from regulation. There will not be any hindrance for ability to get into the market, either to serve our B2B customers or B2C customers, or to just enable the fintech financial services space that we are building. More importantly, we will be doing tens of millions of dollars in revenue. We will be serving millions of customers happily. We will be able to choose who we take money from, if we need to take additional capital from investors, as opposed to right now being very stressed about trying to raise capital. We will be positioned in a way to truly compete at the maximum level and give the best service without any concerns around that cost. I have a huge advantage over commercial banks today. Their cost of capital is less than 5%, most times 1 to 3%. The cost of capital for a non-commercial bank is anywhere from 15 to 30%. Those advantages are what we need to begin to tap into. BBN is working in a huge, important space. The banking industry is cleaned up. Fraud is reduced. In three years, there will be no difference between a fintech company and a commercial bank. We will be able to do a lot more, faster, cheaper. More importantly, we will truly be able to help people create and preserve wealth. That is what will be most exciting for me.

For more information, please visit: https://riby.me.

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