In 2020, payment companies raised the bar with bold innovations and products to help bridge financial inclusion and the bottlenecks in payment across developing countries. This is an indication that there are more potentials and opportunities in the space.
In this interview with Nairametrics, Femi Oshinlaja COO, Cassava Fintech, disclosed that the company is also open to embracing digital currencies as long as there’s a use case that benefits people and businesses across the continent.
Oshinlaja, who is formerly a member of Airtel Africa Group Limited where he oversaw the entire operations of Western Nigeria, also observed that traditional brick and mortar channels of sending money still remain as the dominant or preferred way of remitting money home. Excerpts:
What is Cassava Fintech and the services it provides in the market?
Cassava is a diversified and integrated pan-African Fintech Group that partners mostly with Telcos, Banks and Merchants to enable digital financial services for Africa’s mobile consumers. Our Services include Mobile Money, Mobile Micro Insurance, Digital Banking, Remittances and Payments with a presence in Zimbabwe, South Africa, Burundi, Lesotho and UK and partnerships in other African countries.
We envision a socially and financially inclusive future that leaves no African behind.
With financial inclusion in South Africa, and other countries in southern Africa skewed to high income earners, what role will you be playing in deepening financial inclusion among households in the lower income gap?
Strategically, we have made migrants our primary target market. Most are in the lower group, marginalised and excluded from the mainstream financial services market due to various factors such as documentation, accessibility and affordability. Cassava seeks to provide the migrants with financial use cases such as cross border and domestic remittances; digital wallets and mobile micro insurance services.
How well has Cassava Fintech fared with online money transfers – transaction volume and value?
The traditional brick and mortar channels of sending money still remains as the dominant or preferred way of remitting money home. This is undergirded by the confidence, trust and limited risk the customers associate with walk-in outlets to send money. Customer behaviour and habits take time to change and educating them on the value of the online channels is key.
However, with the growth in smartphone penetration and greater pervasiveness of the internet we see the convergence of the online channels with more consumers opting to use digital channels to send money home as they see the convenience of doing so from the comfort of their homes and not having to queue to make the transaction in addition to the affordability of the online option.
Cassava Fintech is amongst the few cross border money operators which has adopted a hybrid model or approach for sending money home, providing access via the walk-in channels as well as online via the mobile app. Some of our source markets e.g. UK and EU are 100% online and others like South Africa are still predominantly offline but with online growing significantly. We project as a business that in the next three to four years more than 80% of our money transfers will be done through online.
How do you intend to position Cassava Fintech in the Digital Banking industry considering the presence of competitors who are majorly startups and traditional banks?
Cassava is primarily focused on providing solutions that solve customer needs as opposed to finding niche segments of the Fintech value chain to play in. Our integrated value proposition is focused on bringing financial inclusion to all and in the process redefining the concept of banking for all Africans. Our approach and position is one of co-opetition with our competitors and as the African proverb says, “if you want to go fast, go alone but if you want to go far, go together.” Consistent with our “integrated platform play”, we are bringing all the players together on one platform.
There are other applications like Chippercash that provide similar services with Cassava Fintech, what stands Cassava Fintech out in terms of its unique value proposition to its end users?
While we have seen a plethora of Fintech companies in Africa launching various services in the past 1-2 years, most of these have positioned themselves within specific segments of the market, playing to their key strengths. So from a competition perspective, it is turning out to be a congested space, with most players focusing on their specific area of strength, for example, remittances, online payments, insurance, digital banking solutions, and so forth. While Cassava plays across most of these individual areas, what truly sets us apart is our integrated model, that has allowed us to uniquely combine all these services, and to deliver unified value propositions offering unparalleled customer value.
Share more about this and your long term plans as you drive the financial inclusion agenda?
You will be aware of our recently launched integrated social payments platform, branded Sasai, which is really the pivot of our strategy going forward. Through the Sasai super-app, we are able to offer users the ability to pay, chat and consume a diverse range of online services, all within a seamless digital environment.
What are the plans for Cassava Fintech to expand to other African countries aside Zimbabwe and South Africa?
Firstly, l would like to point out that as we speak, we already have presence in at least 10 African markets. These include our key markets where we have a significant in-country presence, namely Zimbabwe, South Africa, Burundi, Lesotho and the UK, while in the rest we have maintained indirect presence through strategic partners. Going forward, we will maintain this hybrid-model, but placing a lot more emphasis on establishing direct presence in a number of key targeted markets. In this regard, our focus over the past year has been on building the necessary rails that would see us spread our tentacles across Africa. Over time, we plan to have significant presence in most of Africa’s largest and fast-growing markets, but more immediately, our focus is on markets such as Nigeria, Ghana, Kenya, Tanzania, Ethiopia, Zambia, Botswana, Rwanda and Uganda.
With cassava Fintech indicating strength and presence in vast segments or sectors of the digital economy such as Mobile money, social payments services, Digital Banking, international remittances, mobile micro insurance, social networking and digital media services, where do you see Sasai in five years, and what role do you see the company playing in the global digital economy?
Our view is that Sasai is Africa’s beacon of hope for creating true value designed by Africans for Africa. Our hope is to help facilitate payments and commerce for small to medium sized businesses, provide a platform for African content creators to tell African stories, and be the overall one stop shop for the ambitious African entrepreneur and business person looking to make impactful lasting change in their communities. Being a platform that facilitates financial liberation for all Africans is key to achieving this. However, we have been guided and informed by consumer insights which says that in the course of conducting business people feel the need to combine this with the social aspects of day to day life and this is an important aspect of Sasai.
Sasai has over 100k+ downloads on play store, and it’s number 24 on the rank of the top social networking app on apple store, how do you intend to add value to the Social Payment and the Chat aspects of Sasai leveraging your expertise and the uniqueness of the app which uses a peer to peer network?
Despite the 100k downloads reflected on the app stores, we are cognizant of the fact that there remains an established phenomenon across Africa were, to avoid the cost associated with downloading Apps from the different app stores, users will prefer to use the APK files and these represent a significant number of customers on the App which are not recorded on the stores and therefore the actual app downloads and usage is significantly higher. Today Sasai has been downloaded in more than 180 unique countries, and is being used in more than 25 different languages on the app.
Sasai is more than a social networking app, the social elements were to address the needs of the attention economy and mine data to enable development of RIGHT products and merchants sell RIGHT services informed by big data, this also creates VAS such as customer profiling based on non-traditional financial data sources such as payments history and more flexible credit support.
With the demand for video conference service at all time high, and with the huge prospect for growth projected into the future, how do you intend to grow the user/customer base of Sasai teamtalk, given it was launched this year?
One of the biggest opportunity for Sasai TeamTalk (voice and video calling, including conferencing) in terms of growing the client base is based on building the enabling rails, digital and social inclusion is key, especially in Africa where data costs is average 8% of income (compared to developed countries under 2%), we are building these rails through Sasai Wi-Fi Finder (affordable and accessible) and believe this will make TeamTalk more attractive that competitors such as Zoom.
What other products and services are in the pipeline from Cassava Fintech from 2021 and beyond?
We will continue to leverage our main delivery channel, which is the Sasai social payments platform, to offer innovative, relevant and accessible digital solutions across Africa. To our customers, this means a bigger, better and feature-rich Sasai super-app, and they can look out for enhanced digital payments and financial use cases, e-commerce, remittances, and so forth, as well as integrated value-added services with a special mention of digital media. Furthermore, we are aware of the data requirements associated with digital apps nowadays, made worse by the high cost of mobile data in Africa. For this reason, we will continue to focus on our WiFi offerings (Sasai WiFi Finder), extending it to many new markets as a way of addressing these issues. We call this initiative the “Africa Missing Network”, which is a partnership between Cassava Fintech and Liquid Telecom, one of the largest providers of fixed broadband connectivity in Africa.
What role do you think cryptocurrency will play in transactional exchange in Africa – Is Cassava Fintech looking to adopt digital currencies?
Cassava is absolutely open to embracing digital currencies. As long as there’s a use case that benefits people and businesses across the continent, Cassava will be there. We have some exciting partnerships and we are working on this space and look forward to introducing these into our key markets in due course.
Crypto may suffer setbacks, remain trading within speculative confines except … – DLM Capital CEO
A domestic investor should focus on companies that have either better endured or increased their sales channels beyond the pre-pandemic levels.
Several Nigerians, including Vice President Yemi Osinbajo, have called on the apex regulators of the banking and Financial market sectors, the Central Bank of Nigeria and the Securities and Exchange Commission (SEC) to implement a regulatory framework for Cryptocurrency transactions in the country.
In this interview with Nairametrics, Sonnie Ayere, the Group Chief Executive Officer of DLM Capital Group, a firm that has been at the forefront of creating alternative financing solutions for businesses and providing bespoke innovative ideas to access funds for growth, bared his mind on the subject.
To him, without a status of cryptocurrency as a medium of financial exchange by the majority, it could suffer setbacks and remain trading within speculative confines related to commodities, like gold.
What growth trajectory do you predict for the Nigerian economy in 2021 after recovery from recession?
We believe that the post-recession economy for Nigeria in 2021 would reflect significant growth as the effects of the Covid-19 pandemic on the economy wanes with the resumption of vaccinations to beat back its spread. Businesses requiring customer visits were most severely affected in 2020 by lost patronage. While manufacturers, and marketers alike, carried on with stable, unthreatened production levels and supply of goods; the challenge was how to get customers to pick and purchase them. This inspired a rise in demand for delivery options, by both customers and sellers; thus, we have indications of further potential in new and existing delivery and logistic companies, online retailing, and online payments for sales beyond fixed locations or outlets.
We expect the post-recession economy to exceed its current state in economic performance as this is a state for which most movement restrictions have been eased, and the conduct of business for physical transactions has resumed. We believe that the earlier formed opinions on the Nigerian economy forecasted a more than a transient period of recession relative to other countries facing the same. We believe this was premised on significant negative expectations of anticipated weak responsiveness from the government, high infection rates and perceived challenges of financing and management of the pandemic.
The year 2021 resumed with increased activity in the global economy which has induced higher price levels for commodities following a rebound in demand. In Nigeria’s case, this is relevant to the nation’s Crude Oil exports. Nigeria is again opportune with increased revenues and a chance to increase its savings.
Despite the disruption triggered by the COVID-19 pandemic, Agriculture, ICT and Financial Services sectors have remained resilient. What do you think is responsible for this and which sectors do you see driving further growth in 2021?
For these three sectors mentioned, the most profound contributions came from the ICT services, because it largely facilitated greater levels of transactions for the financial sector particularly with regards to growth in electronic payments and online merchandising. Agriculture particularly thrived as supply chains faced little threats with movement restrictions, and unlike most other sectors, enjoys steady demand. The prize for value should go to ICT related services for easing the sales of goods and services away from physical markets where people would ordinarily transact.
The Federal Government has presented a budget estimate of 13 trillion with a historic deficit of N5 trillion. How realistic do you see the 2021 budget in line with the assumptions?
Overall, higher oil prices translate to stable expectations on financing with crude oil production and sales. The expectations of performance from that should be covered with increased global energy consumption. Higher revenue from sales also affords the country a greater capacity to service future debt financing payments, which also translates to lower borrowing costs.
What would be critical is the government’s success in increasing tax revenues in the face of depressed economic activity and its ability to raise debt and conduct asset sales if needed.
What is your assessment of the investment climate in Nigeria on the back of COVID-19?
The Investment climate in Nigeria following the Covid-19 outbreak is shaped to reflect the economic situation following the impact felt within average households, and these are lower average earnings per household, a reduction in businesses that can breakeven, and a need for preserving wealth.
For the Financial Markets, the trend is of lower yields for all fixed-income investments; these span government treasury bills and bonds, corporate debt, that is commercial papers and corporate bonds, and even rates on bank deposits. For the stock market, 2020 featured a strong rally though corporate performances were varied, clearly reflecting differences in customer patronage of underlying sectors. We believe it was a clear search for yield as many companies offered attractive dividends relative to their trading prices.
What will be the outlook for the Nigerian fixed income market in 2021 in terms of the regulatory landscape and opportunities for investors?
For the fixed income market for 2021, we anticipate an increase in corporate issues from companies familiar with the financial market and “in-pipeline” transactions from new corporate prospects. The focus would be access to the current lower market rates at different tenures and refinancing their existing debt at these lower rates. We expect to also see increased issuance of commercial paper to shore up working capital for financing inventory.
We anticipate support from our regulators as we push for the inclusion of more companies into the opportunity space for all stakeholders in our domestic financial markets. However, there appears to be a push for higher rates by the main buyside operators, hence an increase in FGN yields.
The Nigerian equity market was on a rally that triggered a circuit breaker on the NSE recently, what does this mean for the market’s outlook?
The impressive rally of equities in 2020 was triggered by investors searching for higher yields. It is only rational that some investors would reconsider their aversion for stocks and seek the upside offered by rich dividend income relative to fixed income investments at the time. Institutional investors have for a recent while favoured fixed income and backed down on taking on equities; fixed income yields in the market had sufficed for the performances of their managed portfolios. We have seen this change with the rally and we do hope for better corporate performance to sustain strong fundamentals for each component industry represented on the Nigerian Stock Exchange All-Share Index.
From an investment perspective, what investment options would you advise investors (retail and institutions) to focus on in 2021?
2021 presents opportunities for value investors as some domestic company stocks remain undervalued relative to similar companies in other foreign stock markets. A domestic investor should focus on companies that have either better endured or increased their sales channels beyond the pre-pandemic levels.
In the fixed-income space, it is important to note that upcoming deals will seek to capitalise on current market offered rates as some sectors of the Nigerian economy ease back into profitability under rising economic activity. Current traded debt securities would be more attractive and priced to yield lower based on improvement in economic conditions.
The theme for investment should be the location of the business front. Many location-based businesses that an individual would traditionally visit to view and purchase merchandised products have had to step up on selling efforts by expanding sales channels beyond their physical location by way of promoting brands and products via social media, their e-commerce sites and offering online options of delivery and payment.
The frontier for distribution has been stretched to include mobile devices with online payments; investors must seek where revenues are secured with a focus on distribution costs.
What is the future of crypto regulation in Nigeria, and what are the gains of Nigeria adopting a digital currency?
Ultimately on admission as an acceptable medium of exchange; some form of regulation under the ambit of the monetary authority and the securities exchange commission would be handed down to manage its effects on the economy as currencies do. The adoption of cryptocurrency as an acceptable medium of transactions included in monetary resources across more countries would most likely precede its adoption in Nigeria; we do feel these would be soon addressed by individual countries and the International Monetary Union as full adoption of cryptocurrencies quite literarily portend some displacement of currently accepted international currencies in international trade, a development member countries which own the major currencies would most likely resist; and of course, countries with currencies out of this group, would most likely support.
Without a status of cryptocurrency as a medium of financial exchange by the majority, it could suffer setbacks and remain trading within speculative confines related to commodities, like gold.
Some critics have argued that there are other ways for the CBN to curb illegal transactions instead of placing a ban on crypto transactions. What is your take on this?
There is no argument that there are other ways to curb illicit flows, but with an unregulated status, it would be natural for the apex bank to view some transactions as ‘rogue’; that is, operating without oversight, controls or data on source and destination of transactions. Until the monetary authority props its infrastructure to monitor and regulate this, cryptocurrencies would be seen to support parallel transaction ecosystems.
Smallholder farmers need to deploy technology to tackle wastage – Farmforte CEO
Farmforte CEO discusses how Nigerian can utilize technology to create the most efficient and affordable methods to produce crops.
With increased worldwide awareness of food security and sustainable food production, agriculture is rapidly growing as one of the key industries on both a global and local level.
In Nigeria, there is a renewed focus on growing the non-oil sector of the economy and the Agro-industry is experiencing a renaissance with dedicated government policies geared towards encouraging farmers and investors and increasing the contribution of the sector to the GDP.
In this interview with Osazuwa Osayi, Co-Chief Executive Officer (CEO), Farmforte Limited, he buttressed the need for the nation to sustainably increase export earnings and how to increase earnings for smallholder farmers. Farmforte’s roots lie in an end-to-end agricultural solution and mechanized farming system.
What influenced your choice of Agribusiness?
Farmforte is an agricultural – value chain development firm, we play along the entire Agri value chain of specific crop types in Nigeria, Africa, and across the world. Our mission is to utilize technology and innovative models to create the most efficient and affordable methods to produce crops, add value and create access to markets locally and globally.
When we launched our operations, we were a mainly export-focused business and the challenge we had in mind was how to sustainably increase export earnings and how to increase earnings for smallholder farmers. Our business has, however, now evolved and we work to solve challenges across the value chain from farm to fork.
How exactly do you play across the value chain?
Our solutions cut across sustainable agriculture, value addition, and market creation. A large part of our farming and processing activities are housed at the Farmforte Food Valley (FFV), an agro-industrial park located in the Evbolekpen community of Benin-City, Edo State where we have a collective landbank.
Some smallholder farmers still find it difficult to source and aggregate produce like sesame seeds, cowpea among others. What do you proffer to address this?
Smallholder farmers are the key to food security in Africa. Not only do they hold large swaths of arable land, but they also constitute about 70% of the workforce on the continent. Through our out-grower programs, we work with smallholder farmers (about 110,000 of them in our network) to source and aggregate produce such as sesame seeds, cowpea, cocoa, and cashew both for export and for local consumption.
What are the challenges the smallholder farmers are facing?
They are bedevilled by a myriad of challenges ranging from low yields, post-harvest losses, lack of finance, low mechanization, and poor access to markets. We provide them with credit, training, input, and harvest support. Another major challenge farmers on the continent face are access to markets and guaranteed access is vital for profitable success.
What are the solutions needed to drive growth in Agri-business?
We have developed several solutions to process and package agricultural goods into world-class products for local and global markets. From our sweet potatoes grown in Nigeria, we produce a sweet potato beer product for the European market in our facilities in the Netherlands, we also produce sweet potato puree, french fries, and chips.
At FFV, we have a 10 ton per hour integrated rice mill, a fully automated poultry centre with 2,500 birds per hour processing capacity and we are setting up a 50 cattle per hour automated slaughterhouse. We also have a 20 metric tons per day capacity cashew processing facility in Lagos State.
Storage and logistics are key challenges facing farmers. How do you address these?
We eliminated wastage by deploying world-class technology to tackle storage and logistics challenges to ensure that traders in open markets across Nigeria can gain easier access to produce sourced directly from farmers.
On retail, we recently launched our retail flagship store in Lekki where we give consumers a complete farm to fork experience. They are able to purchase produce sourced from our farms and from other farmers across Nigeria.
On export, we understand that guaranteed market access is vital for the profitable success of smallholder farmers. At Farmforte, we provide reliable access to local and global markets for smallholder farmers. We buy up all our smallholders’ produce and add value, thereby giving them a guaranteed income and greater potential for profit. A lot of our export activities are coordinated by our sales office in the Netherlands.
What is Farmforte’s value proposition?
Our Value Proposition is ‘Adding Value, Creating Wealth.’ It is based on the premise that Agriculture goes beyond just farming and the true substance lies in adding value to what is farmed, to maximize its potential. We recognize sustainable agriculture as a strong instrument of economic growth and shared prosperity.
We are an impact-oriented firm focused on creating novel solutions to existing problems in the African agriculture landscape and transforming them into economic opportunities.
How have your operations evolved over the last few years?
We started our operations in 2014 and we were focused on creating global markets for local produce, by exporting very specific crops such as sweet potatoes, sesame seeds, cocoa, cowpea, and so on. Since then, we have expanded our activities to play across the entire agricultural value chain, from production to retail.
What strategic partnerships have you embarked on to aid growth and expansion on the domestic and international front?
Our strategic partners have been instrumental in helping us achieve some of our set goals. For example, we have partnered with HYBR, a Pan-African innovation firm and growth platform for the implementation of scalable solutions on some of our projects.
Matter Innovation, a UK-based innovation firm has also been working with us on a syndicated innovation program, centred around unlocking opportunities in the agricultural value chain in Nigeria. We have also worked with Technoserve, an international non-profit organization, for some of our activities with smallholder farmers.
How would you describe your organisation’s work culture?
Our work culture can be described in three words: Authentic, innovative, and entrepreneurial. We work in a dynamic, rapidly evolving sector that requires us to constantly take intelligent risks in order to stay ahead.
What are the lessons learned from the COVID-19 pandemic?
The pandemic has taught us to be nimble and ready to adapt to situations, even on short notice. Despite the pandemic, we have been able to maintain a seamless flow of our operations across over 8 locations, leveraging virtual office platforms and using bespoke project/task management and tracking technologies.
Is adopting corporate social responsibility in line with Farmforte’s core values? If so, what are your CSR objectives?
Corporate Social Responsibility is not just something we adopt; it is embedded into all our business operations from sustainable farming to community relations, to employee welfare, and so on. We aim to ensure that all our activities are socially responsible and also take steps to maximize our positive social impact. We are dedicated to improving the quality of life and wellbeing of the people living and working on the farms in the communities we operate in because sustainable agriculture and social development go hand in hand. We are aligned with the United Nations Sustainable Development Goals (SDGs) which has guided our commitment to social innovation in the following areas: Water, Energy, Healthcare, and Education.
What CSR activities have you taken on?
We have several projects in the works but most notably, we recently renovated a school in the Evbolekpen community in Edo State (where our farm and industrial centre are based) and both the enrollment and attendance at the school have increased significantly. We also created a 5KM road in the same community to improve mobility and access to the community from Benin City.
What are your priorities for 2021?
There are several exciting projects in the works, but over the next few months we plan on increasing our cashew processing capacity to 13,200 tons per annum by expanding to a new location, we also plan to have completed our fully automated rice mill with a capacity of 73,000 tons per annum at the Farmforte Food Valley (FFV) to name a few.
What would you say is Farmforte’s vision for the next 5-10 years? And what strategy is the company employing to make these goals a success?
Ultimately, our vision is to feed the world but we hope to partner with at least 1,000,000 smallholder farmers by 2025 and beyond that, we aim to be the largest and most valuable global sustainable agri-business by 2050. Our strategy is to constantly innovate and to remain relentless in our approach to tackling challenges and achieving our goals.
Nairametrics | Company Earnings
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