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Jack Ma’s fintech firm is set for IPO, signalling prospects for Nigerian fintechs

Ant Group now operates Alipay which millions of shoppers use across Alibaba’s e-commerce networks.

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Jack Ma’s fintech firm is set for IPO, signalling prospects for Nigerian fintechs,

Ant Financial Services Group, the fintech subsidiary of Jack Ma’s Alibaba Group, is set for an Initial Public Offering (IPO) on both the Hong Kong Stock Exchange and Shanghai Stock Exchange’s STAR board.

The details

Announcing the development early Monday morning through a press statement that was published on its website, Ant Group said the concurrent IPO will “accelerate” its main goal of ensuring that China’s service industry eventually becomes digitised.

In the same vein, the IPO is also expected to help Ant Group to expand investments in technology and innovation, whilst partnering with investors to develop global markets.

READ ALSO: Fintechs to Drive CBN’s Financial Inclusion Target

Part of the press statement quoted Ant Group’s Executive Chairman, Eric Jing, to have said:

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“The innovative measures implemented by SSE STAR market and the SEHK have opened the doors for global investors to access leading edge technology companies from the most dynamic economies in the world and for those companies to have greater access to the capital markets. We are thrilled to have the opportunity to play a part in this development.

“Becoming a public company will enhance transparency to our stakeholders, including customers, business partners, employees, shareholders and regulators. Through our commitment to serving the under-served, we make it possible for the whole of society to share our growth.”

READ ALSO: Financial Inclusion: Fintech firms got $400 million investment in 2019 – Emefiele 

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What we know

Nairametrics understands that the planned IPO has long been eagerly anticipated by industry insiders. Ant Group now operates Alipay which millions of shoppers use across Alibaba’s e-commerce networks for payment purposes. With this IPO, investors stand a chance to co-own what is, undoubtedly, one of the biggest fintech firms in the entire world.

The backstory

In October 2014, Alipay was restructured/rebranded in such a way that it became overseen by Ant Financial Services Group. The following year, the company (i.e., Ant Group) raised a whopping $4.5 billion during a funding round that was backed by the likes of China Development Bank Capital, Primavera Capital Group, and China Investment Corp, etc.

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Since then, the company has made a number of acquisitions, including EyeVerify Inc which it bought in 2016. It has also successfully positioned itself as a major payment gateway in China’s e-commerce ecosystem, with Credit Suisse estimating that as much as 58% of the country’s massive online payment transactions go through the platform.

With this planned IPO, Ant Group will better position itself for greater exploits in the Chinese (and most likely) global fintech space.

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This presents prospects for African and specifically Nigerian fintechs

Although relatively small when compared to Ant Group, Nigerian fintech firms are increasingly building capacity and positioning themselves as major players in the country’s financial services sector. Interestingly, these fintech firms are also quite good at raising capital. In 2019 alone, African fintechs were responsible for an estimated $2 billion in VC fundings. A bulk of those funds come into Nigeria, which has arguably become Africa’s fintech capital.

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READ MORE: Explained: CBN’s powers to seize bank account of criminals

In view of the foregoing, therefore, perhaps an IPO is something Nigerian fintechs may want to consider taking advantage of. This will not only benefit them but also present new investment opportunities for Nigerian investors who are constantly on the lookout for viable investment opportunities.

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.

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Financial Services

CBN grants Mortgage Refinancing Companies approval to refinance Non-member banks

The CBN has expanded access to mortgage financing by removing restrictions on refinancing mortgages earlier imposed.

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The Central Bank of Nigeria (CBN), has granted approval to Mortgage Refinancing Companies (MRC), to re-finance non-member banks.

This is contained in a circular referenced FPR/DIR/GEN/CIR/07/056 and signed by Ibrahim Tukur, the Director of Financial Policy and Regulation Department, CBN.

The circular improved on the earlier provisions contained in section 7.3.1.5 which states that “A mortgage refinance company (MRC) shall not, without the prior approval of the CBN, extend total outstanding credit to any single borrower, which is equal to or more than twenty times the value of the borrower’s shares with the MRC or 25 percent of its shareholders’ funds unimpaired by losses.”

READ MORE: Unity bank wants to be seen, but time is running low

READ: NFF receives $1 million from FIFA as COVID-19 palliative

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What this means

Based on the provisions contained in the latest circular, MRCs are now free and legally permitted to refinance the qualifying mortgages of banks and all other non-members ( that do not hold equity), subject to meeting all other relevant requirements specified in the framework.

In a nutshell, the restriction on non-member mortgage lenders from refinancing their mortgages with MRCs has been removed.

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READ: MFBs, DMBs, others get new lending limit directive from CBN

Why this matters

Prior to the provisions contained in the latest circular, CBN had expressed fears that provisions of section 7.3.1.5 negatively impacts the mortgages sub-sector, as it constrains the MRCS from refinancing the mortgages of non-shareholder banks. Therefore, the new order will help to remove the restrictions already highlighted.

In lieu of this, the latest circular stated that the provision of section 7.3.1 5 is hereby revised to “the MRC shall not, without prior approval of the CBN, extend total outstanding credit to any single borrower, which is equal to or more than 25 percent of its shareholders’ funds unimpaired by losses,” the circular reads.

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Financial Services

CBN reveals framework for the N75 billion Youth Investment Fund

The Nigerian Youth Investment Fund will be funded through the NIRSAL MFB window of the CBN.

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CBN reveals framework for the N75 billion Youth Investment Fund, Economic Growth, CBN, Governor, Emefiele, CBN releases new capital base, sanctions for Microfinance Banks, Nigerian Banks broadly positive after naira devaluation, Naira hits N465 to $1, Central Bank begins disbursing $100million to hit at currency speculators

The Central Bank of Nigeria (CBN) has revealed the implementation framework for the Nigerian Youth Investment Fund.

This was disclosed in a publication by the Development Finance Department under the auspices of the Central Bank of Nigeria.

The CBN stated that the Nigerian Youth Investment Fund (N-YIF) would be funded through NIRSAL MFB window, with an initial take-off seed capital of N12.5 billion.

READ: #EndSARS: FG creates new N25 billion Youth Fund, to increase to N75 billion in 3 years

The N-YIF aims to financially empower Nigerian youths to generate at least 500,000 jobs between 2020 and 2023.

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Objectives of the scheme:

  •  Improve access to finance for youths and youth-owned enterprises for national development.
  •  Generate much-needed employment opportunities to curb youth restiveness.
  •  Boost the managerial capacity of the youths, and develop their potentials to become the future large corporate organizations.

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What you should know
Recall that on the 22nd of July, 2020, the Federal Executive Council (FEC) approved the sum of N75 billion for the establishment of the Nigeria Youth Investment Fund for the period of 2020 – 2023.
The fund was created to support the innovative ideas, skills and talents of Nigerian youths, and to institutionally provide Nigerian youths with a special window for accessing much-needed funds, finances, business management skills and other inputs critical for sustainable enterprise development.
  • The fund targets young people between the ages of 18 and 35 years.
  • Beneficiaries of NMFB, TCF and AgSMEIS loans, and other government loan schemes that remain unpaid are also not eligible to participate.
  • Individuals (unregistered businesses) shall be determined based on activity/nature of projects subject to the maximum of N250,000.
  • Registered businesses (Business name, Limited Liability, Cooperative, Commodity Association) shall be determined by activity/nature of projects subject to the maximum of N3.0 million (including working capital).
  • The tenor of the intervention is for a Maximum of 5 years, depending on the nature of the business and the assets acquired, of which interest rate of not more than 5% under the intervention shall be charged annually.
  • The Federal Ministry of Youth and Sports Development (FMYSD) will collaborate with relevant stakeholders to identify potential training for training/mentoring.
  • The youths that are duly screened (and undergo the mandatory training where applicable) shall be advised to login to the portal provided by the NMFB to apply for the facility.

READ: CBN raises alarm over fraudulent loan offers, investment schemes with charged fees

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As a huge percentage of youths are engaged in the informal sector, the NYIF will facilitate the transition of informal enterprises owned by youths into the formal mainstream economy, where they can be supported comprehensively, build a bankable track record, and be accurately captured as active participants in economic development.

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Financial Services

CBN to drive implementation of zero balance account opening in banks

The CBN has urged the DMBs to allow zero balance for the opening of new accounts.

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The Central Bank of Nigeria (CBN) has urged the Deposit Money Banks (DMBs) to allow zero balance for the opening of new accounts, as part of the efforts to promote greater financial inclusion across the country.

In addition, the banks are also expected to simplify their account opening processes, while adhering to Know-Your-Customer (KYC) requirements in the push towards financial inclusion.

READ: This is where PSB, CBN got it all wrong

READ: CRR: Banks suffer N917.5 billion debits in latest CBN action

This disclosure was made in the Monetary, Credit, Foreign Trade and Exchange Policy Guidelines for 2020/2021 fiscal year, which was issued by the Central Bank of Nigeria (CBN).

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While stating that these measures are part of the efforts to encourage banks to intensify deposit mobilization during the 2020/2021 fiscal years, the apex bank also encouraged banks to develop new products that would provide greater access to credit.

READ: Nigeria @ 60: The Banking Sector and the Nigerian economy 

A part of the report reads, “As part of its effort towards promoting greater financial inclusion in the country, the bank shall continue to encourage banks to intensify deposit mobilization during the 2020/2021 fiscal years. Accordingly, banks shall allow zero balances for opening new bank accounts and simplify their account opening processes, while adhering to Know-Your-Customer requirements.

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READ: Lagos Rail Mass Transit: House of Assembly approves N153 billion for construction

“Banks are also encouraged to develop new products that would provide greater access to credit.”

In addition, the apex bank said that the Shared Agency Network Expansion Facility (SANEF), which was established to enhance the provision of financial services access points in under-served and unserved locations and drive financial inclusion through agent banking, would continue in the 2020/2021 fiscal years.

READ: CBN launches framework for advancing women’s financial inclusion in Nigeria

It states that banks, mobile money operators, and super-agents would continue to render returns in the prescribed formats and frequency to the CBN.

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