Industry executives said at the Virtual Couch Session during the just concluded Lagos Startup Week that access to financial services is a sign of development in Nigeria.
Dayo Ademola, Managing Director, Branch Nigeria, participated in a discussion about “What next for Fintechs in Africa” with other leaders in the fintech sector. The discussion was hosted via Twitter Spaces by Benjamin Dada, the Nigerian Country Manager for Stitch.
When talking about the importance of financial services in society, Ademola stated that access to financial services has been a symbol of development in underdeveloped countries. The rise of fintech has been aided by the Central Bank and the expansion of mobile usage, according to Celestine Omim, CEO of Klump.
The lack of access to financial institutions that many Nigerians experience created an opening for fintech growth, according to Olusola Amusan, co-founder of Vesti.
According to Nubi Kay, Startup Program Lead at Paystack, 60–70% of funding for tech startups flows to the fintech sector, which has produced the majority of high-value businesses and unicorns in Nigeria, fintech is the backbone of commerce.
Ademola made the claim that the need to cover enormous gaps, such as the availability of credit and the capacity to provide small, quick loans without the burden associated with the traditional banking system, can be credited to the expansion of the fintech sector. She claimed that Branch International was founded in a nation like to fill this void.
This chance has, however, not been without its share of difficulties. The fundamental issues with lending in the Nigerian system, whether it be small retail loans or bigger individual and commercial loans, are underwriting and scoring.
Basically, how can lenders decide who is deserving and what models can spot clients who don’t miss payments?
Ademola described the solution Branch came up with for this issue. At Branch, we have developed a really good methodology for evaluating people that gets better every day. We must rely on other data points as we lack a readily available national credit score that can guide your financing decision.
Since it is almost perfect, we have spent a lot of effort fine-tuning the model so that we can provide small loans to people.
Branch International has provided more than six million loans to Nigerians since it was founded and also gives them access to investment opportunities. The digital finance app provides services like microloans up to N500,000 ($1200) and chances for long- and short-term investments with among of Nigeria’s greatest returns on investment.