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Blue BRT Takeover: How Primero is transforming Nigeria’s transportation system

Three years ago, Primero came onboard with its blue BRT buses and changed the transportation game.

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Blue BRT Takeover: How Primero is transforming Nigeria’s transportation system, COVID-19

Three years ago, Primero Transport Services Limited was established and positioned to change the history of transportation in Nigeria. The company is a modern transportation outfit whose entry into the market was as forceful, as it was calculated. Just three years into the journey, a lot has already been accomplished. However, in an exclusive interview with Nairametrics, the company’s CEO, Mr. Fola Tinubu, revealed that there are still many more plans to be unveiled. Before we get into all that, let us first go back to how it all began.

The beginning of an era: Primero’s aim to revamp a megacity’s archaic road transport system

Just a few years ago, the sight of a blue BRT bus in Lagos would have been unusual. Back then, little effort was being made to change the system for the better, even as Lagosians bore the brunt of traffic issues. And then seemingly out of nowhere, the now well-known blue buses are all over Lagos, providing affordable and comfortable transport services to local commuters.

Primero was masterminded by Mr. Fola Tinubu, who founded the company and raised the investments needed to kick-start it. According to him, the vision for the company was born when, in early 2015, the Lagos State Government put out a Request for Proposals (RFP). Back then, the State Government was just completing the Ikorodu Road renovation project in conjunction with The World Bank. Therefore, proposals were sought from qualified and capable private investors who were interested in operating the Bus Rapid Transport scheme in the state.

From studying the RFP, Mr. Tinubu and his partners bought in to the government’s vision. Consequently, they submitted an expression of interest alongside a proposal. And at the end of the competitive bidding process that ensued, Primero emerged the winner.

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Partnership with Sterling Bank Plc

One of the requirements set out by the Government was that whoever won the bid to run the blue BRT scheme must start out with a specified number of busses. In specific terms, the winner must have a total of 434 buses. Therefore, after Primero Transport Services Limited won the bidding process, it had to prepare for the Government’s inspection. And to do that, the company sought Sterling Bank’s help in order to obtain the credit facilities needed to purchase the buses. In his own words-

“We went to Sterling Bank, showed them what we were trying to do, and they supported us. Their support led to us being able to secure the buses from China. And the rest is history.”

Three years down the line, Primero is a force to reckon with

Today, any resident of Lagos who has ever commuted in a Primero bus can, indeed, attest to the fact that the company makes all the difference. The buses are neat, with air conditioning, comfortable sitting arrangements, in bus wi-fi, and very well-trained and meticulous drivers. And, most importantly, the service delivered by Primero is quite affordable.

In the course of preparing this report, Nairametrics visited (twice) the company’s main depot at Majidun in Ikorodu. The first visit was for a tour of the facility. It was around mid-day, the end of the early morning rush hour. We observed as the blue buses were being washed and prepared for the afternoon/evening rush hour. Here, all the ultra-modern equipment needed to maintain the buses was readily available.

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We saw the automated washing machine which cleans the buses, and we were privy to see the mechanic workshop, alongside the auto mechanics, all of whom busied themselves fixing the possible defaults in the vehicles. There is even a filling station, which takes care of all the buses diesel needs.

We also toured the communications and control room, which is manned by young and vibrant Nigerians. Their jobs are to monitor the busses and address customers’ complaints (if any), in order to improve the overall quality of services rendered.

More than 400 buses currently in operation, and more to come

Needless to say, no transport company in Lagos has ever done it as well as Primero has. And this manifests in their numbers and expansion. Primero currently has fleet size of 434 buses, a number that is projected to rise to 800 by the end of 2019. According to the CEO,  the company has submitted yet another proposal to the Lagos State Government, indicating interest to operate the Abule-Egba to Oshodi BRT lane which is currently under construction. If the bid is won, Primero will import an additional 350 buses.

Revenue is streaming in 

In the meantime, the company is earning millions of naira on a monthly basis. Monthly income increased from an average of N50 million per month in 2015, to more than N600 million in 2017. The average income generated per month is currently estimated at N1 billion. These figures show an impressive growth trajectory. And there is still room to accomplish much more as the years go by.

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But Fola Tinubu doesn’t take the credit for the recorded success

As the brainchild behind the company as well as the current CEO,  one would expect Mr. Tinubu to take all the credit for Primero’s accomplishments. But he does not. Instead, in the course of our discussion, he kept referring to, “his incredible team members”, which is comprised of about 1,500 employees. According to Mr. Tinubu, they have contributed immensely to the company’s success. Without them, the project would be a failure, he added.

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Yet, the truth remains that the man is the poster child of the company. After all, he is the Chief Executive Officer. And that is why we asked to know more about him.

Focus on the man behind the success story

Mr Tinubu was born and raised in Lagos, Nigeria in the mid-1960s. He recalled growing up as a teenager in the 1970s, when Nigeria’s economic prospect was vibrant due to the then recent discovery of crude oil in the country.

After early studies in Nigeria, he travelled to the United Kingdom where he obtained a BA in Economics and Politics from the University of East Anglia. He later graduated with an MBA from the University of Stirling.

Upon graduation, Mr. Fola worked for roughly eighteen years in the US mortgage industry; reaching top management positions. And now, he has brought home his excellent managerial and leadership experience, and channelled it into transforming the Lagos transportation system. Needless to say, he is doing an excellent job. When asked to talk about the best thing about being a CEO, Mr. Fola said the following –

“Everyone thinks being a CEO is glamorous. They don’t see the other side of it; that is the responsibilities that come with the role. With the position comes the responsibilities. It is like when you are young, you want to grow up quickly because you think you can have so much fun without being questioned. But you don’t realise that growing up comes with responsibilities.

“So, what’s the best thing about being CEO? I think for me it’s the ability to take tough decisions which sometimes can be the worst thing about the position. Also seeing your vision actualize, you can afford to dream about something and work hard until you actualize it.”

Back to primero, what are the company’s growth prospects?

Mr. Tinubu told us that Primero is currently focused on consolidating on the success that has been recorded in the past three years. According to him, the company’s dream is to have, at least, 2000 buses commuting one million Lagosians on a daily basis. By the end of 2020, the company is optimistic that this dream would be half-way accomplished. This is because as mentioned earlier, Primero is working to bring in an additional 350 new buses to operate the Abule-Egba to Oshodi BRT axis.

Therefore, on whether the company plans to expand beyond Lagos, it is a possibility that is largely dependent on its ability to first expand in Lagos. As the CEO emphasised, they are bullish on Lagos State. And it is not difficult to see why. After all, there are lots of opportunities inherent in the city of 24 million people, all of whom need comfortable and affordable means of transportation.

A potential joint venture partnership with Yutong to set up a bus assembling plant in Nigeria

In the meantime, Primero Transport Services Limited has been getting offers by people in Abuja and elsewhere, to operate similar BRT buses already existing in such places. Mr. Tinubu disclosed that there is an ongoing negotiation for Management Service Agreement with the Oyo State Government which would see the company managing the state’s Pacesetter’s bus company.

But overall, the focus remains on Lagos State. And as part of the growth plans for the State, the company is also working to offer specialised charter services-

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“Charter Services – Primero Transport is currently working on a model that would provide specialised services both during the week and weekends. Due to the numerous enquiries for that service, the business has decided to invest in more buses so that the normal bus operations are not affected. As a result of a potential a Joint Venture Agreement with Yutong (the bus manufacturer), the new buses may not be imported, but rather assembled locally. A temporary plant in Epe would happen first and then a permanent plant would be built in the Badagry area of Lagos State. The assembled buses would cater for Primero Transport requirements, and be sold to other customers within Nigeria and West Africa.

“Primero is currently negotiating a Management Services Agreement with the Oyo State Government. Once signed, this transfers the management of over 150 buses from the government to Primero Transport Services Limited for an initial 12 months. The goal for Primero is to convert the Management Service into a full Franchise right, giving the business the opportunity to acquire more buses and operate them in Oyo state (as well as the interstate concessions that currently exists).”

Attention to investors: The Company plans to list on the Nigerian Stock Exchange soon

In view of the company’s expansion efforts, a potential listing on the Nigerian Stock Exchange could help to raise capital. And Mr. Tinubu seemed to agree. As a matter of fact, he laughed very excitedly when Nairametrics asked if such a plan is in the offing. And yes, there is such a plan, he said. According to him, they are in the process of raising a bond.

“Do we want to be quoted on the Nigerian Stock Market? Yes. We will be going to the Nigerian Stock Exchange probably by the end of next year. This is because the rule is that you need to have been in operation for four years before you can go to the market so that people will know your track-record and see what you’ve done and how you’ve done it. So, by the third quarter of 2019, we will be preparing to go to the market. And hopefully, by the first quarter of 2021, we will be quoted on the Nigerian Stock Exchange.”

Competition is not a problem for Primero

On competition, the CEO said there is room enough for all to play. As mentioned earlier, Lagos State has an estimated population of 24 million people. At least, half of these people move from one location to the other on a daily basis. And they also need  affordable and comfortable means of transportation. Moreover, the Lagos State Government has a strategic plan to establish fourteen BRT corridors across the state. At the moment, there is only one that is currently operational. Thirteen more are still on the way. So, there is room for everyone to operate.

In conclusion

Primero Transport Services Limited is changing the transportation paradigm in Nigeria. What they are doing and the scale at which they are doing it, has never been done before in the country. Of course, it hasn’t been smooth sailing all along. There have been challenges, as Mr Tinubu admitted. But despite all, the company is poised to accomplish more feats in the coming years. And Nairametrics will be here to share the good news as they unfold.

Emmanuel is a professional writer and business journalist, with interests covering Banking & Finance, Mergers and Acquisitions, Corporate Profiles, Brand Communication, Fintech, and MSMEs. He initially joined Nairametrics as an all-round Business Analyst, but later began focusing on and covering the financial services sector. He has also held various leadership roles, including Senior Editor, QAQC Lead, and Deputy Managing Editor. Emmanuel holds an M.Sc in International Relations from the University of Ibadan, graduating with Distinction. He also graduated with a Second Class Honours (Upper Division) from the Department of Philosophy & Logic, University of Ibadan. If you have a scoop for him, you may contact him via his email- [email protected] You may also contact him through various social media platforms, preferably LinkedIn and Twitter.

4 Comments

4 Comments

  1. Sydney

    March 28, 2019 at 5:52 pm

    Emmanu!!! I should come take some writing classes with you sha…
    Well done.

    I like the blue BRT by the way
    Its very cheap and nice

  2. Dean

    April 3, 2019 at 11:19 am

    The BRT has done well in commuting large chunk of passengers in Ikorodu-TBS Axis. However, the Company should work on diesel supplies. Sometimes, the buses won’t work because they don’t have diesel. The management should address this issue.

  3. EKEOPS

    April 11, 2019 at 11:02 am

    Do they operate the VI – Lekki – Ajah axis?

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Company Profile

MainOne Cable: A decade-old journey to bridging the digital divide in West Africa

In just a decade, MainOne has grown in leaps and bounds from its little beginnings to becoming recognized as one of Africa’s biggest cable companies.

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MainOne Cable

MainOne Cable Company Nigeria Limited recently celebrated 10 years in the business of bridging the digital divide in West Africa.

As the provider of the first privately owned, open access 7,000-kilometer undersea high capacity cable submarine connection in West Africa, MainOne continues to attract the interest of individuals, corporate bodies and government institutions across the continent.

However, the failure of the company’s management to produce its financial statements since December 2014 raises questions.

READ: MainOne named Microsoft Azure ExpressRoute Connectivity Provider for Nigeria

Unsurprisingly, MainOne was among six telecom operators recently mandated by the Nigerian Communications Commission (NCC) to submit their yearly financial statements, within 7 months after the end of their financial year.

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The company, though celebrated, is not without its challenges, which its financial statements would make clearer. However as we await the submission of the statement, Nairametrics looks into MainOne in this week’s Company Profile to understand what makes it tick.

READ: Facebook is building $1 billion high speed internet across Africa

How it started

Funke Opeke returned to Nigeria in 2008, where she was faced with ridiculously poor internet connectivity, so she decided to do something about it.

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She started Mainstreet Technologies, the developers of MainOne Cable in the same year, to serve as a service and network solutions provider, not only in Nigeria but in West Africa.

What is now recognized as one of Africa’s biggest cable companies started with all of Opeke’s savings as start-up capital. She encountered stiff challenges related to raising more capital to take care of the foundational works, feasibility studies, business plans, and technical plans. However, the company was able to pull through.

READ: MainOne commences construction of cable landing station in Abidjan

On April 28, 2008, Main Street Technologies awarded a turnkey supply contract for the MainOne Cable System to Tyco Telecommunications. After completing and commissioning the project, MainOne went live on July 22, 2010.

The company has since grown in leaps and bounds from its little beginnings. Its connections extend from Portugal to West Africa, with Cable Landings Stations along the route in Accra (Ghana) and later to other countries in Africa like Dakar (Senegal), Abidjan (Côte d’Ivoire), and Lagos (Nigeria).

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READ: Rack Centre to create West Africa’s largest data centre in $100m expansion

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The Phase1 cable system spans 6,900 kilometres. Additional connectivity extending to Angola and South Africa occurred in the Phase2 of the project.

In 2015, the company started operations of MDXi, said to be Nigeria’s largest Tier III Data Center, and extended a submarine cable from Lagos to Cameroon.

READ: Facebook, MainOne romance to birth high speed internet for Ogun and Edo

Operations and unprecedented glitch

MainOne is in the business of providing telecommunication services and offers wholesale broadband services through a system of cable networks and fiber optic infrastructures.

With its services acclaimed to come at fair charges, MainOne Cable has in its clientele, telecommunication operators and providers, governments, large enterprises, and schools across 10 West African countries.

The company claims that its decision to provide its services at rates that are less than the current international bandwidth prices in the region is to encourage local content development via skills transfer of critical networking technologies and job creation, with the location of the network operational center (NOC) in Nigeria.

READ: Africa’s internet economy has the potential to reach 5.2% of the continent’s GDP by 2025 – Goggle/IFC

Main Street Technologies is also backed by influential investors such as the Africa Finance Corporation, the Pan-African Infrastructure Development Fund (PAIDF), and a couple of Nigerian banks.

In 2018, the company recorded a 74-minute glitch during a network upgrade that caused some Google global traffic to be misrouted through China. This temporary disruption attracted immediate reactions from critics, but the company assured that stringent processes had been put in place to prevent a repeat of such outage in the future. To its credit, there has been no other record of such.

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READ: Nigerian passport holders have access to just 2.1% of the world’s GDP – Forbes

Financials

In an interview with Nairametrics in 2017, Opeke stated that the company was yet to attain profitability, but was making strategic investments that would pay off in the future. However, with the last publicly available statement being that of 2014, there is no way to ascertain what level of progress has been made in the last 6 years.

The 2014 financial statement was audited by KPMG Professional Services at the time when Babatunde Dada was still CFO. The report showed progressive growth in the company’s fortunes from 2011 to 2014. However, all of the company’s expenses went up, despite the various cost optimization programs implemented.

READ: N1.5trillion accumulated losses of NNPC, a serious going-concern risk – PWC, SIAO Partners

Profit before tax grew from N146.8 million in 2013 to N189.6 million in 2014, while total revenue grew from N1.1 billion in 2013 to N1.7 billion in 2014.

In 2020, the COVID-19 pandemic and other incidents also took their toll on the company’s finances. During the company’s 10 years celebration recently, Opeke pointed out that the cost of the company’s services had become slightly expensive due to power challenges and the currency volatility in the country.

However, she said that the company was working towards deploying smarter policies to further realise its vision. She also noted that the company was in the process of winding down its foreign debt obligations and increasing exposure to Naira loans, to shield itself from the impact of the fluctuating exchange rates, since its customers paid for services in naira.

READ: Tizeti, MainOne extend partnership to expand highspeed WiFi services in Africa 

Management  

A decade after its establishment, Opeke still runs MainOne Cable as the Chief Executive Officer, while Anil Verma serves as the Chief Technical Officer.

Others are:

Solanke Abimbola, Chief Finance Officer; Tinuola Ipadeola, Head of Corporate Services and Development; Gbenga Adegbiji, Chief Operations Officer MDXi; Abayomi Adebanjo, General Counsel; and Olawale Fayose, Company Secretary.

READ: 28 million merchants to be granted crypto usage on PayPal

Heading the Board of Directors is Fola Adeola as Chairman, while Dapo Oshinusi, Taiwo Okeowo, Bennedikter Molokwu, Innocent Ike, Souleymane Keita, Banji Fehintola, Sipho Makhubela, George Olaka, Sandeep Fakun, and Praveen Beeharry, are all Directors.

With this calibre of talents and seasoned professionals on its management team, the mystery shrouding its financials becomes worrisome.

READ: SAHCO acquires eco-friendly electric tractors for its ramp operations

Recognitions

The over $400 million infrastructural investments in West Africa have made noticeable impacts across the economy and earned MainOne a number of recognitions and awards.

In 2019, MainOne was awarded the Datacloud Africa Award for Excellence in Data Center (Africa) and Africa Cloud Service Provider of the Year, Nigeria Business Leadership Award for Connectivity and Data Centre Service Provider of the Year, and BoICT Award for Best Tier III Data Centre in Nigeria – MDXi.

READ: Huawei ranks No.1 in 2019 Data Center Interconnect Market Share outside of North America

Others are NTITA Telecoms Wholesale Provider of the Year (2017), Lagos Chamber of Commerce and Industry Award for Excellence in Broadband Infrastructure (2016), Frost & Sullivan Best Practices winner for the Nigerian Data Center Customer Value Leaderships Award (2014), Ghana Telecoms Awards: Telecom Wholesale Carrier of the Year (2013), and Nigerian Telecoms Awards: Broadband Company of the Year (2011), African Telecom Hall of fame – Best Telecoms project of the year (2010), amongst others.

READ: Elon Musk surpasses Bill Gates’ wealth, now worth $128 billion

Bottom line

Besides acting in line with the new NCC policy, the Management of MainOne will have to do something about making the financial reports available to the public. Not only will this satisfy stakeholders’ curiosity, but it will also keep interested and potential investors abreast with the progress made so far and help them determine where assistance is required.

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Company Profile

Kuda Bank: Changing the face of banking for the millennial

Kuda Bank’s model saves conventional banks the heavy cost of running network branches, further translating into free banking services for customers.

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The now-frequent presence of agitated customers in long queues in the banking hall emphasizes the need for a wholly digital bank.

Kuda Bank is the first institution that comes close to meeting this need, where customers can carry out all their banking transactions without having to visit a physical branch.

Kuda Bank, founded by Babs Ogundeyi and Mustapha Musty, started out in 2016 as Kudimoney (“the bank of the free”), online-only savings, and lending platform, and had gone through a couple of funding rounds before transitioning into Nigeria’s first actual digital-only bank without a physical location.

Speaking after Kudimoney got its full banking license from the Central Bank of Nigeria and transitioned into Kuda Bank, Babs Ogundeyi said: “We’re excited to usher in a new era in consumer banking and serve the many Africans, who we believe are frustrated with traditional banks Starting with Nigeria, we’ll launch a new kind of bank with a continued focus on improving our members’ financial lives rather than trying to burden them with hidden fees and excessive charges”

(READ MORE: Customers’ data: Coinbase received 1,914 requests from FBI, SEC)

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This move made it clear that Kuda bank is not just another savings app or mobile wallet but an actual bank. The bank’s deposits are insured by the Nigerian deposit insurance corporation (NDIC).

A model for the Gen Z

Kuda bank is modeled for the Millennial and the Gen ‘z’ internet-savvy population, providing them the same banking services irrespective of location, but without the time and stress that comes with conventional banking.

It is an all-round improvement of the banking services. For instance, users can open a Kuda account by simply downloading the app and signing up, after which they get a free debit card delivered at no cost nationwide within two weeks.

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With these, one can easily save the time of queuing in the bank and resolve complaints from a mobile device without having to visit any bank.

To make it easy for users to resolve transaction issues that may occur while using the app, Kuda provides the 30-digit session ID for every transaction.

This isn’t an industry standard and normally, you have to call your bank to request this reference number when things go wrong.

(READ MORE: Stanbic IBTC Holdings Plc appoints Sola David-Borha as Non-Executive Director)

Anticipating user needs and providing convenient solutions, in Kuda’s thinking, should define the age of digital banking.

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Kuda Bank also has an automatic savings option where users can save automatically and earn up t0 15% annual interest.

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The bank charges, card, and account maintenance fees which have become a nightmare to Account holders, do not apply to the Bank.

As part of the launch promotion, the bank offered 25 free interbank transfers monthly for all customers who opened a Kuda account before January 1, 2020 while extra transfers to other banks cost N10 each.

Kuda has a wide branch network where customers can make deposits for free, thanks to its partnership with three of Nigeria’s biggest banks.

Debit cards are also issued by access bank, pursuant to a license from Visa International & Verve.

Speaking at the bank’s first town hall meeting at Radisson Blu Hotel, Ikeja, CEO, and founder Babs Ogundeyi explained that the model saves the bank heavy cost of running network branches, and this further translates into free banking services for customers.

(READ MORE: Protecting your money from fraudsters)

The bank also offers a high level of security to protect customers’ personal information from unauthorized use, and allows them to freeze debit cards from the app when it goes missing.

Other security features include; a validation mechanism for every user, a circuit-breaking mechanism that flags down transactions higher than the usual range. This way, if a customer that usually does ₦50, 000 transfers, suddenly attempt an N500, 000 transfer, it will be flagged to alert the customer of a potential mistake, or of a fraudulent transaction.

Partnerships and collaborations

Besides its partnerships with Access Bank, Guaranty Trust Bank, and Zenith Bank, Kuda Bank recently became the first Nigerian bank to be added as part of the Binance P2P payment options, making it possible for people carrying out Peer trading of cryptocurrency on Binance to make and receive payments with their Kuda Account.

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(READ MORE: Implementation of revised service reflective tariff by Ikeja Electric)

ItsSpend and Save’ feature is similar to what is found on other Fintech apps, and it automates the removal of 2% of every expense made from the user’s balance as savings for a rainy-day fund.

Like other competing Fintech, Kuda Bank also has to do a KYC feature that verifies user information using the Bank Verification Number (BVN).

But the absence of a physical branch means that Kuda bank services cannot be used by a first-time account holder.

There is the hope that the bank would address this issue with a BVN feature that gives it independence from other banks, but the technology with which this is to be achieved is not yet certain. It may also consider providing loans.

More players in the space means that in no time, the competition will be based on customer-friendly rates and excellent services.

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Business Half Hour

We wanted to help users pay themselves first – Piggyvest

In a chat with Nairametrics, Joshua Chibueze talked about the idea that sparked the birth of PiggyVest.

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We wanted to help users pay themselves first – Piggyvest

Imagine that you put all your money in one jar, and all your bills in another jar. Chances are that the jar of bills is the one that would never run dry.

Month after month, people spend a huge percentage of their income on living expenses from rent to food, transportation, utilities, and the likes. More often than not, they forget to set aside a little money for themselves. Simply put, they pay everyone else but themselves.

This was the concept around which Piggyvest (formerly Piggybank) was built. Speaking at the Nairametrics Business Half Hour show, Co-founder of Piggyvest, Joshua Chibueze, said that the purpose of Piggyvest was to help people create an automated system, where they could pay themselves first, by setting aside a fixed amount or percentage, before making other expenses.

READ: World’s largest oil company to pay $75 billion annual dividend, despite plunge in profits

Describing the Fintech, Joshua posed a number of questions, “Piggyvest is that place you keep money that is your own money. Beyond having multiple bank accounts, how do you pay yourself? You work month after month, and pay bills, but where do you pay yourself? Where do you keep money that belongs to you and only you? How do you plan towards those heavyweight bills.”

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How a piggybank tweet birthed PiggyVest

On the last day of December 2015, a lady posted a tweet that went viral. The tweet detailed how she had saved N365,000 by faithfully setting aside N1000 in a wooden piggy bank every day of the year. According to her, she ensured to pay herself, by setting aside the sum before making any other expense.

As people continued to share the post and comment about how they might not have the discipline to accomplish it, Joshua and his team (Odunayo Eweniyi, Somto Ifezue, and others, who were working on PushCV at the time), decided to find a way to digitize the process, so salary earners and the self-employed could also set aside money for their personal projects and financial goals. They sampled thoughts from some of their PushCV clients and found it was a concept many would really be interested in.

Three weeks later, the first version of Piggybank had been launched, although it took till April 2016, before the fully tested version was ready for use.

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“It was not all easy because we were trying to do something no one had done in Nigeria. The other companies doing something similar were outside the country, so all we had to rely on was the customer feedback.”

No member of the team had any banking experience, so building the app was a total reflection of customer feedback and user experience. Notwithstanding, they understood that people were concerned about the security of funds; hence, they gradually progressed to the use of bank-level security to ensure against hacking.

In subsequent years, the team added an extra layer of security with a two-factor authentication preventing transactions, unless the user could provide the password and the answer to the security question.

Other steps include; SMS verification instead of email verification, as e-mails are more susceptible to hacking than mobile numbers.

From 1,000 to over 1 million users

At the outset, the intention was to get to the first 1000 users. “We felt that if we could get to 1000 users, it would be worth it. We ran on our funds and did not make any money in the first year, because we were still trying to understand our users and find our feet,” he said.

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After successfully helping users save 21 million in the first year and over 70 million in the second year; the company attracted investors, and by 2018 they had secured a $ 1.1million round in seed funding. This came as a plus, because the business had grown organically at the time, and was already profitable enough to sustain its operations.

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Fintech versus Asset managers

Piggybank first partnered with a couple of Microfinance banks, before partnering with a Commercial bank. In 2018, they raised some $1.1million from investors and acquired a microfinance bank license, a money lenders license, and a cooperative license, allowing them to operate a Trustee agreement with an external asset manager.

There are products tailored for different reasons, so people trying to establish their savings culture could go for an option that allows them to save consistently, and withdraw once in a quarter. There are also options that could allow users to steadily build an investment culture, and others meant for people saving towards a project.

In April 2019, the company rebranded and became Piggyvest. It currently serves over a million users, helping them save and invest “billions of Naira every month that they would probably be tempted to badly spend.”

The more interesting part is that there are no fees for the services, but customers get to make some money, as Piggyvest splits the returns with customers; however, users may have to pay a 2.5% charge, when a customer withdraws his funds before the agreed date.

READ: Effective financial planning after taking a pay cut in Nigeria

Breaking the trust challenge

Financial institutions in Nigeria generally have to deal with the challenge of trust deficit among the customers, but this is even more for fintechs like Piggyvest. According to Joshua, despite taking added measures to secure customers’ funds, any delayed transaction tends to breed some distrust among the users, and the company has to deal with this by providing information.

“This is the reason why we don’t do more of marketing but prefer to let people sell us with their testimonies. Customers tend to believe more the testimonials from other satisfied customers, and this how we have gotten over 1.5 million users and improved customer trust,” he explained.

When the economy went into lockdown, the business showed itself to be pandemic proof, as savings improved after the initial shock. The remote working policy was introduced, so that even in the aftermath of the lockdown, operations continued unhindered.

“We are a customer-centric brand, and the feedback from customers is our motivation. We are out to give them the best experience ever,” he concluded.

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