Paylater, a Nigerian money-lending app to turn into a full-fledged bank

Sachin Bansal might open his own bank to explore a fintech idea

Africa is a continent where a lot of investments are taking place. It is an emerging market and people are looking at it as a gold mine. Businessmen are flying to countries and it is right now the hottest place to invest. Africa is a market which might help businessmen invest and earn in millions. It is something which will provide greater opportunities in the near future.

That being said, out of all the countries in Africa, Nigeria is one of the most technologically advanced countries. It has people working on technology and there are certain companies which have some brilliant concepts. One such company which works relentlessly on the growth of the country and its own is OneFi. OneFi has a subsidy known as Paylater which is a lending platform which lends money for people to buy anything sold in retail.

The company has received a $5 million funding from Lendable another Nairobi-based funding provider to the African startups. Paylater was shot to fame when it was launched in 2016. It has till now over 1 million users and the company has disbursed loans up to 13 billion Naira which is around $36 million. That said, the company, with that funding is going to turn into a full-time digital bank. This was not possible some time ago because over 60% of the Nigerian population does not have a bank account. This is true for almost all of Africa.

The company, however, is looking to change that. This decision also comes in line with the decision of the Nigerian government to introduce BVN which stands for bank verification number. BVN is nothing but Nigeria’s Aadhar Card number. This is the first ever biometric security service enabled by the Nigerian government that links all the bank accounts of the people in Nigeria. Using this number, Paylater and all the similar services can easily loan people money without any documentation.

The banks in Nigeria have a very poor reputation when it comes to providing loans. That is because of the extensive documentation. Previously, Paylater also needed physical documentation and because over 60% of adults in Nigeria were without a bank account, this was failing. The digital bank of Paylater would disburse loans to more people and would risk money over loans it would reject if not for the bank. “As we are pushing on with our web and digital platforms, we also want to reach out to a segment in the economy that is always talked about but not really catered to,” co-founder of OneFi, Chijoke Dozie said.

OneFi is also going to launch feature phones with smartphone-like features so that people would be able to enjoy features of expensive smartphones. The company will use its reputation as loan providers to market these phones.

-Unmesh Phule

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