The demand for blockchain-based services is on the increase globally, while the technology powering these services is growing at a rapid pace. The potential applications for blockchain technology are almost without limit. However, in Nigeria, there are still lots of misconceptions, doubts, and fears surrounding this technology.
A blockchain is a secure, shared distributed ledger. The deployment of blockchain technology ranges from digital wallets, identity management, cross-border trades, to remittances and supply chain finance.
Recently, foremost integrated digital payment and commerce company, Interswitch Group, in partnership with Microsoft Corporation, announced the launch of its innovative blockchain-based supply chain financing module. The Interswitch Blockchain Service (Supply Chain Financing Module) is built and hosted using Microsoft’s Azure blockchain technology which provides a proven security, compliance and scalable cloud platform that accelerates and supports the next generation of blockchain applications.
On this week’s edition of Product Review, we feature Top 7 Facts about this revolutionary new service, one of only four of its kind worldwide:
What Problem the Interswitch Blockchain Service Is Designed To Solve
This innovative platform was conceived to create a framework that allows for the speedy execution of contracts requiring bank guarantees, in a secure and transparent manner, for SMEs.
Prior to the launch of the Interswitch Blockchain Service, small businesses seeking financing to execute supply contracts, would usually spend an average of three months to secure bank guarantee and even get turned down eventually due to the lack of available verifiable funding history.
To solve this problem, the new platform digitizes the process between corporates and banks in providing trade financing to entrepreneurs and business owners in the supply chain sector. The service allows only the intended parties access to a supply chain transaction process with the different stages involved – from the bank guarantee request to approval, up to tracking the repayment by the customer.
The service also helps in streamlining the internal processes within the corporates and banks, which amount to the lag time responsible for the delay in processing these financial instruments. The platform will provide visibility for the different stages of a transaction to the repayment by the customer, reflecting the customer’s credibility by showing history and
performance of the business. This means that a credible customer will have easy access to financing based on his credibility.
The Unique Value Proposition Of The Platform
- The blockchain supply chain financing platform is different from existing corporate financing infrastructure in the following ways:
- The service using blockchain technology provides visibility and a distributed data infrastructure among all parties involved in the transaction.
- It effectively distributes data amongst the participating entities, while providing increased security, owing to its immutable attribute, which makes data hacking very difficult.
- For transactions among different entities that need to share data, it provides some level of trust among entities that would normally not trust one another. The service ensures that the parties in a transaction have the same version of the truth.
- Although blockchain technology is useful in solving problems of transparency and trust between entities, this provides a more secure infrastructure for storing data and is well suited to solve problems of ownership, as the owner of any asset can be traced and authenticated.
The Relationship Between Blockchain and Cryptocurrency
People often confuse these two terms. Cryptocurrencies are digital currencies that make use of blockchain technology to record transactions and are used to pay for digital goods and services, while blockchain is the underlying technology that enables recording of the transactions among different connected entities.
A good analogy is likening the blockchain technology to the Internet. While blockchain is the Internet whose technology enables functions such as Whatsapp, email, browsing etc, cryptocurrency will be seen as the Whatsapp functionality. What this then means is that blockchain is the overarching technology that enables these functions, while cryptocurrency is just one of the functions enabled by blockchain. So the Interswitch Blockchain Service is not a form of cryptocurrency!
How Business Owners And MSMEs Can Use The Platform
The small or medium sized business owner can access the technology through his/her bank (account officer). However, the small business owner is required to have an email address to which notifications and progress of operations updates are sent. Although this is not a mandatory requirement, it allows for easily monitoring by for the small businesses involved.
Benefits to Business Owners and MSMEs
- As against waiting for two or three months processing period, the business owners can now have quicker access to finance from participating banks such as United Bank for Africa Plc (UBA), Guaranty Trust Bank Plc (GTB) and Zenith Bank Plc, because of the streamlined process.
- They can also enjoy increased sales cycles from participating corporations such as the Dangote Group.
- It also builds one’s credit rating, as the history is visible to all other partner banks which might also jostle to provide the supplier with the financing required because they can see the supplier as a more credible customer. Hence, one enjoys a better service and possibly lower fees, because the supplier can negotiate the best rates based on the number of banks willing to provide him/her with the finance.
How This Service Benefits The Nigerian Economy
This new service will allow more entrepreneurs to have access to finance, hence allowing them to scale their businesses. The cumulative effect of this can lead to more jobs, thereby driving economic growth for the country.
The Commendable Partnership Between Interswitch and Microsoft
The Interswitch Group, founded in 2002, is an Africa-focused integrated digital payments and commerce company that facilitates the electronic circulation of money, as well as the exchange of value between individuals and organizations on a timely and consistent basis.
On the other hand, Microsoft is an American multinational technology company with headquarters in Redmond, Washington, where it develops, manufactures, licenses, supports and sells computer software, consumer electronics, personal computers, and related services.
Both companies share the same goal of providing infrastructure and technology to make life easier for their customers.
According to Interswitch, it intends to build a PAN African Payment network using blockchain technology to solve some of the cross-border trade and peer-to-peer money transfer challenges across Africa.
The Microsoft Azure platform provides a very secure platform and as a testimony to this, all banks and major corporates are already using Microsoft Azure today.
With this partnership, Interswitch will leverage the technologies provided by Microsoft to empower all its customers across Africa.
UACN’s major shareholder sells substantial shares
This is coming a few days after UAC Nigeria Plc announced a deal to divest 51% of its shares in UPDC.
One of the 3 major shareholders of UAC Nigeria Plc (UACN), Blakeney LLP, has substantially reduced its stakes in the conglomerate with the sale of 80 million additional shares.
This was disclosed in a notification that was sent to the Nigerian Stock Exchange (NSE) by UAC Nigeria Plc. The notification was signed by the Company Secretary/Legal Adviser, Godwin Samuel.
Note that this is coming a few days after UAC Nigeria Plc announced a deal to divest 51% of its shares in UACN Petroleum Development Company (UPDC) to Custodian Investment Plc.
An analysis of this current sales and reduction of its stake shows that Blakeney LLP reduced its shareholding in the conglomerate through a deal on August 5, at a price of N5.75 per share. A further breakdown of the transactions shows that the 80,000,000 units were sold at N5.75 amounting to N460 million in purchase consideration.
Back Story: It can be recalled that UACN had earlier sent notifications to the NSE announcing sales of 75 million shares by Blakeney between the months of April and June
- In an earlier notification sent to the Nigerian Stock Exchange and other stakeholders in February 2019, UAC of Nigeria Plc announced the emergence of three major shareholders with more than 5% stake in the company. The three major shareholders include Themis Capital Management (8.08%), Stanbic IBTC Nominees Limited (7.27%), Blakeney GP 111 Ltd (7.55%).
- Nigeria’s oldest conglomerate has gone through some major restructuring in recent times following investments by these core investors and other major shareholders. In September 2019, UACN announced the outright dissolution of its interest and restructuring of UAC Property Development Company (UPDC) with the transfer of its interest directly to the shareholders.
- Over the years, UACN has transformed from a very large conglomerate with footprints in different sectors of the economy to a leaner organization with interest in Manufacturing, Food & Beverage, Logistics, Agro-allied Industry, Paints and Chemicals.
- Blakeney Management is one of the oldest and largest institutional investors in Africa and the Middle East. They are based in London and have been managing funds since 1995 for some of the largest institutions in the world.
AXA Mansard insurance divests from AXA Mansard pension as new owner emerges
This disclosure was made in a notification that was sent to the Nigerian Stock Exchange.
AXA Mansard Insurance Plc has announced its divestment from its subsidiary, AXA Mansard Pension Limited, after agreeing to sell its stake to Eustacia Limited, a member of the Verod Group.
This is part of the insurance firm’s plan to focus on and grow its insurance businesses across all parts of the country.
This disclosure was made in a notification that was sent to the Nigerian Stock Exchange (NSE) on August 8, 2020, by AXA Mansard Insurance Plc and signed by its Company Secretary, Mrs Omowunmi Mabel Adewusi.
AXA Mansard Insurance disclosed that Eustacia Limited was selected as the preferred bidder, after the completion of a bid process. AXA Mansard along with the minority shareholder agreed to sell the entire issued ordinary share capital of AXA Mansard Pensions comprising of 60% shareholding (2,067,672,000 shares) held by AXA Mansard Insurance Plc and 40% shareholding (1,378,448,000 shares) held by the minority shareholder.
The statement from AXA Mansard Insurance reads, ‘’AXA Mansard Insurance Plc announces the divestment from its subsidiary, AXA Mansard Pensions Limited. After obtaining the Shareholder’s approval at the Company’s Extra-Ordinary General Meeting held on the 13th of February 2020, the Company commenced the process of divestment by appointing Messer Rand Merchant Bank as the Financial Advisers while Aluko & Oyebode acted as the Legal Advisers on the transaction.’’
‘’Upon completion of a bid process, Eustacia Limited (a member of the Verod Group) was selected as the preferred bidder. The Company along with the minority Shareholder entered into a sale and purchase agreement with Eustacia Limited to divest the entire issued ordinary share capital of AXA Mansard Pensions comprising of 60% shareholding (2,067,672,000 shares) held by AXA Mansard Insurance Plc and 40% shareholding (1,378,448,000 shares) held by the minority shareholder.’’
The insurance firm, also in its statement said that the divestment has received letters of no objection from the National Insurance Commission (NAICOM), National Pension Commission (PENCOM) and the Federal Competition & Consumer Protection Commission (FCCPC).
It should be noted that the completion of the divestment is, however, subject to the receipt of the final approval of the National Pension Commission.
In his reaction, the CEO of AXA Mansard Insurance Plc, Kunle Ahmed, said that this transaction marks a new step in the insurance firm’s broader strategy to focus on and grow their life, property & casualty and health businesses across all its geographies. He said that the AXA Group sees great potential in the Nigerian insurance market and believes they are ideally placed to capture these opportunities due to its market leadership position.
On his part, the CEO of AXA Mansard Pension Limited said that they are confident about Verod’s strong commitment to providing the company with the requisite support to actualize their promise to its clients and stakeholders.
A partner at Verod Group, the new owners, Eric Idiahi, said, ‘’We strongly believe that this is the ideal time to enter the market and that AXA Mansard Pensions provides an excellent beachhead from which to establish a consolidated position and gain market share.’’
Nairametrics reported early this year that AXA Mansard Insurance Plc announced that its shareholders have approved the company’s plan to sell its pension management subsidiary, AXA Mansard Pensions Ltd and some undisclosed real estate investments.
Africa’s largest telecoms firm, MTN, to divest from its Middle East operations
The MTN Group is in advanced talks to sell its stake in MTN Syria to the minority shareholder.
Africa’s largest telecoms firm, the MTN Group, has announced its plans to exit the Middle East. This is part of the wireless carrier’s strategic plan to shift focus entirely to its home continent, Africa.
The mobile operator said that as part of its medium-term strategy, it will be leaving the Middle East, starting with the sales of its 75% stake in MTN Syria. Overly reduced revenue from war-torn Syria and the complex nature of the operating environment in the country are part of the reasons MTN is divesting.
MTN’s Chief Executive Officer, Rob Shuter, noted during a conference call with reporters, that “the Middle East environment is becoming increasingly complex and it contributes less to the group’s earnings.’’
Shuter disclosed that the disposals in the Middle East region will be done in a phased manner, with its 3 consolidated subsidiaries in Yemen, Afghanistan, and Syria earmarked to be sold first. These markets only contribute about 4% to the group’s earnings before interest, depreciation, taxation, and amortization.
The MTN Group is in advanced talks to sell its stake in MTN Syria to the minority shareholder, TeleInvest, who has 25% stake in the firm, according to the CEO. He believes that the telecoms firm is better served to focus on its Pan-African strategy and simplify its portfolio by leaving the Middle East region in an orderly manner.
In the medium term, the group will also dispose of its 49% stake in MTN Irancell, one of its largest markets.
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The South African firm plans to exit the entire portfolio in time, which will then leave it with 17 subsidiaries in Africa.
Just yesterday, Nairametrics reported about MTN’s plan to sell its stake in Jumia Technologies. MTN will also be divesting from telecommunications infrastructure firm, IHS Towers. The divestments from Jumia and IHS Towers were informed by the decision to raise funds in order to reduce MTN’s debts. It will also help the company to refocus its operations.