Fintech companies have emerged as the new disruptive market force, challenging the traditional means of providing financial services in Nigeria. Fintech refers to technological innovation in the financial sector, including anything and everything from mobile banking and peer-to-peer payments to distributed ledger technologies and digital currencies.

They are firms/startups or products that are currently taking opportunities and leveraging tech to tackle financial problems all over the world and quite indeed, in Nigeria.

Seating on the hot seat of Nairametrics’ Business Half Hour is Yinka Adewale, co-founder and CEO of Kudi, a digital payment and collection platform. From what started out as a chatbot, Adewale and his partner and co-founder, Pelumi Aboluwarin have successfully grown Kudi to become a household name when it comes to providing access to electronic banking and financial services.

Adewale said Kudi provides basic financial services for largely underbanked and underserved communities in Nigeria. Speaking further, he said the banking population in Nigeria is high and is about 30 to 40 million while the bank branches in Nigeria are less than 5,000 branches. He continued by saying that what Kudi does is to partner with local stores in the community called agents to provide financial services to areas that have low availability of banking services.

He also stated that Kudi has 50,000 of these agents across the country. Also, they are in partnership with Commercial banks.

Adewale emphasized what instigated his idea of creating Kudi, narrating, “I grew up in a remote area and one thing is that there was just one bank in my locality which usually had an insane queue, especially at the ATM stands. So, having access to your fund every month especially for civil servants becomes an issue. Some of them must travel miles just to have access to their funds. However, when they finally get to the bank, the ATM machine might be unable to dispense cash. With all these findings I decided to create a platform to help curb some of the challenges these communities were facing when it comes to accessing their funds.”

Speaking further, Adewale said that banking in Nigeria remains an attractive sector, with over $9 billion in value pools, but despite high levels of competition, most consumers are underserved. Lack of access to services, issues of affordability, and poor user experience, all contribute to the frustration customers experience. All these have created the opportunity for him to create Kudi to enable easy access to the banking system.

Talking about how Kudi operates, he said they have about 50,000 agent locations in Nigeria that provide fast access to banking services. The agents are more of retailers who are already in business and have people patronising their shops to buy things. In the agents’ shops, Kudi customers can easily make digital payments, top-up airtime, send and even withdraw money.

Today, agency banking is fast gaining popularity due to various reasons like product availability, risk management, improvement in financial inclusion, and others. Adewale says a key challenge for people in this type of business is funding. He also said that when it comes to competition in the fintech space, “the key thing is to focus on your business, keep making progress and keep growing your business year on year. If you have sustainable growth over the year, you will be able to scale through irrespective of the competition.”

The Fintech industry in Nigeria is growing quite fast and has even become large enough to cover different areas including asset tech, wealth tech, credit tech and even cryptos.

“The most important thing is to be exceptional in your chosen area,” Adewale says.

Touching on the future of fintech in Nigeria, Adewale says, “90% of transactions still happen in cash respective of CBN cashless policy. With that, you will note that many of them have not scratched the potential of what is possible over the 4 to 5years.

“There is a lot of acceleration of digital payment in Nigeria and people are gradually moving from cash to digital payment.”