WorldStage Newsonline– Toju, a Nigerian fintech startup which is digitizing the bank for the un-banked through alternative credit-scoring is making an headway at preventing banks, microfinance firms from risk of lending to indebted clients.
Olaide Oladipupo, the CEO/Co-Founder of Toju in an interview with WorldStage Television for the Startups on WorldStage (SoW) series said the record management platform for local savings clubs, thrift collectors, microfinance institutions and cooperatives has been widely accepted pretty by both the clients and financial institutions.
Oladipupo, a hardware inventor and problem solver said the company was founded with the goal of bringing traditional savings clubs into the modern era and helping their members access financial services.
Oladipupo said that they had partnered Zenith Bank and did some awareness in the market for thrift collectors and that with that the market had been able to trust what we do.
He stated that at a point they had a lot of data coming from banks that wanted to know the turnover of respective market women and sellers on daily basis and every month, “because we’re not a lending company, but these agents are on our platform and we have access to their records.
“We are able to share the records with other financial institutions like the banks. So they are able to lend to their agents and their customers. They lend to agents. Before now agents didn’t collect loan from banks, they didn’t have access to liquidity from banks. There’s no way banks will lend to most of them.”
But with Teju platform, he said they were able to connect with commercial banks, micro finance banks etc that are lending to the agents, leading to some agents telling themselves about Toju.
“And that’s how we actually started growing in Akure,” he disclosed.
“We started from Akure and were able to partner with Association of Thrift Collectors in Akure which has about 150 members. When we started we told them they had a default which is lack of knowledge of whether loan seekers have already collected loan from another person or persons and perhaps he/she is collecting yours to settle the one they have collected elsewhere.
“But that if there’s a collector that let you know if the person seeking loan has collected from other agents through credit search, then it’s really going to help you because a lot of the customers don’t know what it means to be over-indebted. What they do when they see opportunity to collect loan is just to collect, not minding whether it will serve them or not.
“You now find out that the more they collect loans the more the wares/goods in their shops keep reducing because they’ve owed a lot of people. So what we did was to start with Akure and we were able to on-board different agents on our platform. By so doing we formed agents in a particular area into a whatSapp group.
“That is the manual process before we digitized it. What this method helps do is that when you want to give a particular customer loan you send her details to the Whatsapp group for other agents banking the customer to know she wants to take loan and for whoever she is owing to flag her down so that they will know she is still indebted to some financiers.
“So it makes it easy for the institution that wants to give the loan to know if to move ahead or wait for some time for the customers to clear other loans first. So this gives financial agents/institutions a lot of knowledge and insight into how they lend to market women.”
THE TOJU JOURNEY
Recounting his journey into the fintech business that he co-founded with one Adeola, Oladipupo said he was formerly an executive officer of a micro-finance outlet that collected savings from market women and gave loans to them in retun.
But observing the problem associated with manual handling of records which made operations usually difficult for the outlet to trace accounts of clients by having to go through sheet of books, he co-founded Toju with Adeola to begin the digitalization of banks for the unbanked.
Oladipupo said of his experience in the financial technology business thus: “Before I started Toju, I was actually a CEO of a micro finance which gave out loan to market women and also collected savings from them. We had agents that go to markets everyday collecting deposits from the market people. But there’s the problem of all the records being manual, using pen and paper. Most of the time it’s usually very difficult for us tracing their accounts having had to open sheet of books and trying to find their records and all those stuff.
“In 2019 I was among the twelve people that were selected by Accion Venture Lab. It’s like an incubator; a six-stage three months incubator. So I was among the 12 entrepreneurs actually selected. They asked us to peer with each other to form a company to incubate us in the programme. At the end of the day, I co-founded Toju with Adeola to digitalize the bank for the unbanked.
“There are many micro finances, cooperatives, thrift collectors/agents and the funny aspect is that they still do manual records even up till now, something they’ve been doing for three hundred years ago. You find out that most of their transaction is still manual.
“What we’ve done is to digitize those processes. Toju is actually a record management platform for thrift collectors, cooperatives, micro finance institution and the rest. After digitizing the records we’re able to get some insights.
“For example we’re able to know how much a particular pepper seller at a particular market in Akure is saving on daily basis with a micro finance. We were able to know the total number of barbers in a particular location in Akure. With that we’re able to get a lot of data and based on the data we’re able to know, for example, how many agents a particular pepper seller is saving with everyday, how much is she saving, how much is she making daily, how much is the loan she’s collecting from other agents everyday etc.
“We are able to have access to all these information and this helps inform us to make right decisions when customers request for loans. So what we’re doing in essence is connecting all these informal financial service providers. We’re able to connect them together and translate at the end of the day all the records into formal financial setting.
“So, based on the record we generated banks and other financial institutions are now partnering with us to be able to give credits to customers because based on our platform, we’re able to know mummy Ruth selling pepper at market, what she saves everyday and when she needs loan we’re able to connect her to formal financial service like banks to lend to her.”
Mr. Oladipupo disclosed that with Toju, they have been able to power a lot of loans to all the market women through the platform, clarifying that they don’t give out loans but that their platform is like a collector between market women and banks while charging some commission on those transactions.
Olaide is passionate about offering a wide population with an integrated payment solution with the 12 year experience programming web-based and android solutions behind him. In 2014, he worked with a technology team to develop a solution worth 53,000 USD for the Federal Government of Nigeria. He used to run a small business that offers embedded and software services. In 2016, he was invited by the Chinese government to speak on African tech innovation.
CHALLENGES
Oladipupo identified their major challenge as having to cope with most of their agents who are old, traditional in approach to banking operations and could not operate mobile phones or devices.
He said this became a problem to them since what they were creating was digital platform that didn’t need pen and paper work.
Hear him: “One of the major challenges we face is that most of the agents are old people and traditional in approach to banking operations, they cannot operate mobile phones or devices. And you know what we are creating is digital platform, we want them to do away with pens and papers.
“Because of that we are working with PoS agents now aside thrift collectors. PoS operators can continue doing what they have been doing; transferring and withdrawing people but we are now giving them additional source of income by collecting ‘ajo’ (periodic contribution).
“What this means is the instead of an agent going from place to place collecting cash from market women, they (market women or businesses) around the PoS can easily walk to there and store their monies with PoS agents.
“The PoS operators don’t need to move around but just put advert that they are collecting ‘ajo.’ Their mobile numbers are more or less their accounts numbers, and the beauty of this is that you can walk to another agent to access your money rather than losing it if anything happens to your first agent, because your mobile number is like your account number with Toju.
“This is what people have not been enjoying with deposit and loan transactions until our arrival. Before, if it took one month for their agents to come back to operation they would have to wait that long before they could do anything but operations have gone beyond that level now as you can still access your fund from any other agent whether your agent is available or not.”
GOVERNMENT CASHLESS POLICY
Declaring that government cashless policy has impacted their business positively, Oladipupo said the fact that many people were going to be dealing in cash transfers, which is the basis of their operation, made the policy favourable.
He explained: “Fortunately the new policy that puts limit to cash withdrawal will really favour us though we’re still studying the implications for market women. Favour us in the sense that many people are going to be dealing in cash transfers.
“The fact that one can store his money and access it at another place, which is the basis of our operation, puts Toju in a position of advantage if properly networked. You won’t have to withdraw money but used the one you’ve stored with particular agent to effect transactions (buying or selling) in the market.
“You can also do transfer even if you don’t have the knowledge, PoS operators will help out and transfer from Toju account to any bank. Besides, I thing the cashless policy will favour us also but we don’t know yet what the impact of these policies are going to be to end-users, the market women.
“Needing more that you can withdraw daily is where we come in to complement and from which we will benefit financially.”
COMPETITION
Asked if they’re the only one operating the business concept yet or they have local competitors doing same thing, Oladipupo replied they only had indirect competitors, not direct one.
“We don’t have direct competitors but indirect ones. Companies like Bankley, Ajodad are like our indirect competitors. While they create new agency network, we leverage on the existing ones.
“Right now we have access to about 200 agents on our platform yet we don’t have a single agent. We leverage on our existing agents while the other competitors create their own agents that they send to the markets collecting cash deposits and all those services but we leverage on the existing agents,” he explained.
MOTIVATION
Oladipupo said what motivated them the most was the fact that they’ve been able to change situation from traditional to digital way of banking and financing.
He said: “The motivating factor is that the practice has been interesting, considering that we’ve been able to change situations from traditional to digital/modern way.
He added that clients were much more comfortable with having people come to them for saving of their monies instead of having to go through rigour of queuing at banks after spending money on transport and waiting long to get same thing done.
“Worst still,” he added “when one considers the little money some of the market women make and the much they have to spend doing transactions directly with banks. So, this system of banking is very interesting because we’ve been able to bring into the banking pool the unreached business people with whom all transactions end in the first place.
“This is because of the fact that everybody, regardless of class, level of wealth or saving method, is still coming back to the market to sell or buy from these grass root market men and women. Though it’s very challenging it goes a long way in bridging the gap between the formal and informal sectors if we are able to crack and make it accessible.
“Despite that these people store their monies with agents they still could not have access to loan because of the manual way of their record. Even on our platform, we discovered that there are artisans not taken to reckoning but are making good money and saving big who if not for our services won’t have access to loan with banks because banks will look down on them.
“An example is a barber who is one of our clients and saving N10,000 every day. If such a barber should approach a bank for loan he will be considered as ordinary barber but not knowing he’s making good money and saving big because there’s no record showing his savings.”
He stated that this is where their interventionist service became significant since what they’re doing was to digitize records and share with formal financial services so that banks could see the records and grant loan to someone as the barber earlier mentioned to power his business.
JAPA SYNDROME
On the raging phenomenon of exodus of Nigerians, popularly referred to as ‘japa,’ to other countries, especially the western world, Oladipupo said though he won’t blame people trooping out of the country for doing so but that if they had opened their minds they would have recognized the abundance of opportunities in the country.
“Personally I won’t blame people doing it because I’ve been opportune to represent Nigeria in some countries but if not for the problem of insecurity in the country there’s no reason fleeing because there are a lot of opportunities in the country,” he stated
Adding: “I feel there are a lot of things to do, there are a lot of things and problems to solve. These same situations have been solved years ago in some of the countries Nigerians run to.
“I think those fleeing should have instead studies how other countries resolved their problems and take a cue from it and get into action rather than running away.
“Government too has a big role to play in encouraging people to stay and take advantage of available opportunities. I have friends who also left the country but some people like me chose to stay despite that it hasn’t been easy.
“Even when you’re in those countries you will find that but for insecurity there are better things one can do here to succeed in life.
“Why I’m bullish about the phenomenon is that if you look at people like Jim Ovia, Dongote, Otedola etc you find out that they all become what they are today through their investment in Nigeria before launching out into other countries. What this means is that there are many opportunities here but only few can see it.”
PASSION FOR SUCCESS
Advising young ones aspiring to become entrepreneurs, Oladipupo said they should not make getting rich quickly or making money in little time their primary motive but rather go into what they have passion for.
According to him, everybody doesn’t need to be a designer, programmer or musician but that irrespective of whatever they want to do it should come with passion so that when things are going roughly they will always find happiness in what they do.
“Some time you may not have much to do your business but you find you’re happy and not knowing where the happiness is coming from.
“It’s because you have passion for what you’re involved in. Being an entrepreneur is not about starting a business and making profit immediately.
“It’s something that requires passion, focus and dedication. If all these attributes are there you will definitely achieve your goal, even beyond your expectation,” he stated.
According to him, if passion is the primary driving force an entrepreneur will always find happiness in what he or she does.
“Aspiring entrepreneur should not make getting rich quickly or making money in little time their primary motive but rather go into what they have passion for” he advised.
“Everybody doesn’t need to be a designer, programmer or musician but that irrespective of whatever you want to do let it come with passion so that when things are going roughly you will always find happiness in what you do” he added.
Oladipupo observed that some time an entrepreneur might not have much to do business but found happiness and not knowing where the happiness was coming from.
He said “it’s because you have passion for what you’re involved in. Being an entrepreneur is not about starting a business and making profit immediately. It’s something that requires passion, focus and dedication. If all these attributes are there you will definitely achieve your goal, even beyond your expectation.”
STARTUPS ON WORDSTAGE
Oladipupoappealed to WorldStage to priortise discussion at its summit for startups on tackling the problem of exodus of Nigerians to foreign lands as, according to him, it’s not good for the social and economic health of the country.
He said: “One of the things I will like discussed is how to tackle the issue of japa (exodus of Nigerians to foreign lands) you earlier mentioned.
“This is necessary because it’s not good for the social and economic health of the country having people who should have been helpful to the cause of Nigeria depart to other countries.
“I’m always not happy seeing people leave the country when I consider what the country is losing in terms of talents, manpower and economic prospect these people are leaving with.
“It’s not that it is bad for people to travel out or settle in other countries, but when this happens in drove and large proportion it’s not good.
“So, tackling the problem perhaps through policy formulation, provision of facilities etc should be one of the focuses of discussion at the summit.”
As parting shot he called on Nigerians to have a mind of dedication to whatever they set out to do so that challenges do not easily scare them away when they’re faced with them.
