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What has Fintech got to do with #EndSARS?, By Rarzack Olaegbe

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Is your club playing in the Fintech Champions League?
Rarzack Olaegbe

What has Fintech got to do with #EndSARS? Well, let us find out. But, first, let us imagine finance without technology. You would not get an automated teller machine. You would not get a bank card. You would not be able to make funds transfer. Your parents and friends and family would not get a credit alert. You would not get a debit alert either. Therefore, for every transaction, you would visit the bank branch where your account domiciled.

At your bank branch, you would meet a market scene with a beehive of customers. You would therefore be required to obtain a tally number. Then you would join a queue. If you are a trader or a businessman, your cheque would sleep for a week at the clearinghouse. If you cannot wait for a week, you would dare the consequences. That means you would travel to your destination. To make time, you would book the night bus. You would ferry your stack of cash in a Ghana-must-go-bag.

Definitely, you are not sure if trouble would be lurking on the way. Well, it is a risk you must take unless you are prepared to wait a week for your cheque to clear.  It is your choice. Meanwhile, the bank’s choice would be to close for business at 1 o’clock.  But it is not the tellers’ choice to spend several hours reconciling the books. Oh, lest I forget, you would not need a Bank Verification Number, no. The list of what you would get by activating finance without technology is endless.

But because technology has married finance, the transaction has gone haywire. Today, from your closet you can transfer fund to me and several others. You don’t need a tally number. You can receive fund from across the seas. Technology has cut through the mountains. It has permeated the oceans. It has levelled the valleys. All Goliaths have been conquered. There is no barrier to banking and finance any more. The only limitation exists in your mind.

The protestors preferred fintech as a platform to receive funding from Nigerians and Nigerians in the Diaspora.

Now, financial technology or fintech has made everything so easy. Do you think you cannot obtain a loan without collateral? Do you think you cannot transact business with PayPal? GetBarter by Flutterwave says you can do so. Some dreadlocks-wearing, laptop-clutching and beard-spotting youths have turned the world of finance on its head. They have blurred the lines between loan and credit. You now have Nano credits. The credits your bank cannot touch. The credits your bank would not touch. The banks would not touch these credits because they are too hot to handle, too risky to embrace and too spicy to swallow.

However, these credits are favoured by young executives and other Nigerians who cannot endure the end-of-month-wait before getting paid. In their millions, Nigerians are turning to the online credit companies for a salary advance. No, not so fast. You cannot join the club easily. If you are not sociable, you cannot access the loan. If your social reputation score is not on the ascendancy, you cannot access the loan. Some smart thinking, hardworking and progressive young minds are making the impossible, possible. They are making the unbelievable, credible. So, what has this story got to do with #EndSARS? That is the beginning of the story. Let us dive in.

The thesis was written by Rafiu Oyesola Salawu and Mary Kehinde Salawu, 2007, The Emergence of Internet Banking in Nigeria: an appraisal of information technology journal, the authors informed that computerization in the Nigeria banking industry came in the 1970s. Societe General Bank deployed the first automated teller machine. Before then, few banks have adopted the Local Area Network to link their branches. Others implemented the Wide Area Network to connect branches with other cities.

Since then banking activities in Nigeria have increasingly depended on the development of technology. In service organization like the banks, information flows more than physical items. As such, many banks have expanded their offerings of electronic banking products. With the deployment of technology, money is now stored in a medium such as cheques, credit cards and electronic means than in its pure cash form.

These have helped the banks to augment their distribution networks with transactional websites. The practice has allowed bank customers to open accounts, check balances, transfer funds and make and receive payment over the internet. Due to this fact, many banks have created interfaces. They have built portals and apps. It is now more of a competition and egoism rather than offering customers value-added service. All of these have made the transaction very easy for the customers.

The need to innovate and modernize banking for improved service delivery and convenience led to the adoption of internet and electronic banking. Today, you can verify your accounts online and do much more real-time. Switches have been built. Different value-adding products have been layered on the switches. Fintech has thrown up products like Paystack, Flutterwave, Paga, Paylink and similar products. Thus, you have completely forgotten the past.

To prosecute their protests, however, the organisers turned to another technology, bitcoin. That is the power of technology.

Welcome to the present. A new report by McKinsey & Company has shown the Nigerian fintech ecosystem raised more than $600 million in funding between 2014 and 2019.  The report noted fintech attracted 25 per cent at $122 million of the $491.6 million raised by African startups in 2019. That is second to Kenya. Kenya attracted $149 million. Nigerian fintech companies are primarily focused on payments and consumer lending.

The report indicated that banking in Nigeria remains an attractive sector with over $9 billion in value pools. That is why Paystack, a fintech company was acquired by Stripe for about N74 billion. Fintech experts have opined that full optimisation of fintech companies in Nigeria can stimulate economic activity. Fintech can create a multiplier effect. Fintech can drive progress towards development goals.

At a seminar organised for Finance Correspondents of media houses in Lagos recently, the Managing Director/CEO of the Nigeria Deposit Insurance Corporation (NDIC) Mr Umaru Ibrahim corroborated McKinsey & Company’s report. McKinsey said Nigeria’s youthful population, increasing smartphone penetration and a focused regulatory drive to increase financial inclusion and cashless payments have provided an enabling environment for the over 200 fintech companies to thrive.

That is why the #EndSARS eggheads turned to fintech and not the banks. The protestors preferred fintech as a platform to receive funding from Nigerians and Nigerians in the Diaspora. Flutterwave was the payment platform of choice, not a bank. However, before Flutterwave was closed, sources closed to the eggheads said about N100 million have been realised.

This fundraising attracted the attention of the authority. Therefore, Flutterwave, the payment platform and a virtual bank used to process the donations was shut. To prosecute their protests, however, the organisers turned to another technology, bitcoin. That is the power of technology. That is what fintech did with #EndSARS. Dear friend, can you imagine payment without technology?

*Olaegbe ([email protected]  Tweet @RarzackO   Skype:rarzackolaegbe)

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