How Fintech Companies in Nigeria Want To Navigate Covid-19
Prior to the end of 2019, the year 2020 was a year everybody looked forward to. Apart from being a New Year, the positive excitements that it was the beginning of a new decade got most people and organisations look forward to it, as the year ushered the entire universe to a new millennium that birth different technology innovations and advancements.
Ushered the New Year into a new decade were prophecies and predictions of what will happen to each industry in the New Year. As pastors were churning out both good and bad prophecies that will happen in the New Year, different projections on how the economy will fair were also coming out from different quarters.
Out of all the projections and prophecies about the New Year, none could foresee the emergence and frantic spread of the novel Coronavirus 2019 (nCoV-19), the virus responsible for the Severe Acute Respiratory Syndrome Coronavirus Disease of 2019 (CoViD-19) an epidemic that could bring the entire world to its knees.
As other industries received their predictions and projections about the New Year, the financial technology space was not left behind. In her view on what role fintech will play in the New Year, Monica Desai Weiss, an investor at Silicon Valley and venture capitalist at Kleiner Perkins, said that the fintech sector was becoming saturated.
“With fintech, acquiring customers is getting more expensive, and mindshare is getting harder to come by. We’ll see brands that already have mindshare in other ways move into fintech. People you go to for other products and services will use fintech to make their product or service easier. Some people call this embedded finance”.
In his fintech predictions for the year 2020, Chief Executive Officer, Trium Networks and Trustee at Open Banking Nigeria, Adedeji Olowe said that fintech innovation in the year 2020 will soon force account-based payments become the preferred means of payment.
Olowe envisaged that integration of APIs with payment method would affect 50% of all card payments.
Much of these predictions have not started playing in the New Year when Wuhan, Hubei, a city in China had the first outbreak of Corona Virus in December 2019.
According to Wikipaedia, the Coronavirus disease, that is also known as Covid-19 was recognized as a pandemic virus by the World Health Organization (WHO) on 11 March 2020 and as at 20 March, more than 246,000 cases of COVID-19 have been reported in at least 180 countries and territories, resulting in more than 10,000 deaths and 88,000 recoveries.
Fallout from the virus has started having huge impacts on major corporations and countries of the world with significant impact on the bottom-line of most fintech companies, posing a boon for those who can take of advantage of the period in some segments while hindering others.
Carbon, a Nigerian fintech company that provide payments and investment opportunities recently announced that the rapid spread of the COVID-19 virus globally will force them to effect slight changes in their work activities.
The company’s Chief Executive Officer, Chjioke Dozie said that the company is taking the decision based on how the virus globally, is negatively impacting the world.
In his words, “We are targeting 100% working from home for all Carbon staff to minimise the likelihood of the infection, but our support team will be available 24/7 only via emails and social media only”
Dozie also pointed that increase in loan requests will only be kept on constant renewals and, in rare cases, loans can be reduced.
“We’re adjusting our maximum loan amount from ₦1million to ₦500,000, to provide helps for as many people as possible in these trying times,
We’ll also be slowing down loan increases for repeat borrowers, so it is possible that you may get the same or a lower-than-usual increase on your next loan offer”, he said.
As a Fintech startup, the founder of Social Lender, Faith Adesemowo said that Social Lender is connecting millions of people to the formal financial services to meet their basic human needs while they stay at home or work remotely.
Adesemowo said that people must learn how to use digital devices at this critical time for all their transactions to avoid physical contact with people as they were being advised.
In her view, the femtech in fintech said that there will be spike in the number of borrowers, as people are in panic mode of the pandemic virus.
“People are borrowing to stock up what they have defined to be essential for themselves and their loved ones. This then spirals into a high demand for cash. The good news is that together with our partners, Social Lender is offering formal financial service to everyone who meets our basic criteria for accessing loan”, she said.
As employer of labour, Adesemowo further explained that the company is complying with existing labour laws and directives from government as they were being advised to take caution on the pandemic virus.
“Because we have systems that are automated and supported from any location, we are observing flexible work from home policies for members of staff,
We have also provided the necessary health kits to ensure that our staffs perform their duties in a healthy and safe environment”, she said.
On the other hand, the Co-Founder/COO of Kiakia, Chiemeziem Anyadike, a fintech company with headquarters in Abuja, which uses artificial intelligence powered platform to perform credit scoring to enable individuals and businesses access consumer and business loans, said that they have not implemented a work-from-home policy for their staff because no cases had been reported yet in Abuja and the outbreak had not in anyway affected their operations.
“Loan applications are increasing on daily basis on KiaKia, the virus has not in any way reduced the number of people that apply for loans. People keep submitting loan applications daily. We have had substantial increase in loan application and sign ups even at this period”, Chiemeziem explained.
He further explained that they will follow any directives on Covid-19 from the Federal Capital Authority if they were told to observe the social distance as it is being observe in most places.
“We are currently monitoring the situation as it progresses and would decisively implement a stay-at-home policy once we observe any deterioration in the current situation of things”, he said.
This article was written by and published on Enterprise CEO on March 23, 2020.