Building Wealth Through Effective Saving Culture

For many Nigerians, the concept of credit is still quite foreign. Nigerians believe you can either afford an item-pay full price outrightly–or you cannot afford the item. Credit is only for small items at the kiosk across the road from your house, on an afternoon when you suddenly run out of cash. Cash is still king in Nigeria with the majority of Nigerians choosing to pay bulk sums in cash. Only 2.6 percent out of the population of 200 million own a credit card, whereas the number of bank account holders is higher at 39 percent.

According to a report by Payfi Nigerians are not averse to modern banking solutions but rather Fintech solutions and investments are increasing on the continent.

The report explained that traditional banks now offer fintech services in collaboration with Fintech startups like the recent partnership between Payfi, FCMB, and CDL.

The report remarked that typically, Nigerians build wealth by saving, adding that the problem with that method is that it sometimes takes a long time to build the funds needed to make a purchase and sometimes emergencies arise that require immediate funds that even savings cannot cover.

The report further explained that for many salary earners, the problem is not that they do not have the resources to purchase an item, it is often just a problem of having the money in bulk and quickly.

It argued that due to predatory practices from online loan sharks and high interest rates from banks, Nigerians also shy away from loans, stating that to build wealth, Nigerians need access to purchasing power without breaking the bank every time, “this is where fintech solutions like no collateral loans and buy now, pay later (BNPL) are important.”

The report said Payfi recently announced the launch of its buy now, pay later product in partnership with First City Monument Bank (FCMB) and CDL, a product offering Nigerians a chance to build wealth while having access to a better quality of life.

It also revealed that BNPL is a financing method that lets users make purchases on credit and pay at a future date, usually in instalments, while pointing out that with PayFi’s infrastructure all a customer needs is your account number to make a purchase at checkout.

According to him, “For consumers, this product allows them to shop online when they don’t have the funds readily available. It’s a simple and flexible shopping method. Users find partnered merchants via the Payfi website, mobile app, or FCMB mobile app, add items to their cart and select Payfi as their preferred payment method. They can then choose to checkout directly on Payfi with their bank account or sign in with their Payfi ID if they are existing Payfi users.

“Once the transaction is successful, the merchant will proceed to deliver the goods or offer the service, and the customer can pay back later. This system allows consumers to get access to quality goods and services in a financially flexible way.

“For businesses, this infrastructure allows them to plug into Payfi’s online checkout solution to accept BNPL at no risk to them. Also, for Financial institutions, Payfi allows them to distribute their credits through PayFi’s platform, offering more options to their customers, increasing their retail portfolio and sales, reducing risk, improving customer loyalty, and also being able to monitor the use of credits by seeing the actual goods or services their customers have purchased.

“This infrastructure also enables financial institutions to offer BNPL as a product to customers. This concluded collaboration with FCMB is the first step towards the plan to ensure all banks in Nigeria are integrated, so all users will need to transact on Payfi’s BNPL is their bank account number. By extending its BNPL infrastructure to other financial institutions, Payfi also frees up resources for these institutions for free, so they don’t need to commit time or resources to build from scratch.

“Payfi is a fintech company that focuses on helping Africans build wealth by providing credit access to underserved salary earners. They provide customers with split payment (pay small, small) options to make payments for rent, school fees, healthcare, alternative energy, shopping, travel, bills, and more through checkout options online or offline.

“This collaboration with FCMB and CDL was inspired by the need to ensure that every Nigerian has access to credit at the point of sale. At Payfi, we have built a technology infrastructure that powers BNPL in Nigeria and the fastest way to scale our solution is to partner with institutions that have strong credit processes across different customer tiers. Through this partnership, FCMB and Credit Direct Limited can provide loan disbursement services to eligible customers. In addition to these two partners, we also have other disbursement partners like Renmoney, Zedvance and Snow MFB who are able to provide credit on our BNPL Infrastructure.

“Payfi began as Osbit computing in 2018, initially providing financing to bankers and their families and friends who wanted to purchase mobile devices. Founded by three tech bankers–Philips Akinyele (CEO) Seun Sanni (COO), and Matthew Igho (CTO)–they began with the goal of helping Africans build wealth by providing credit access to underserved salary earners. Rebranding to Payfinancial Technology Services in 2019, they’ve expanded and now offer customers split payment options. Payfi also provides white-labelling services to partners across Africa enabling them to offer BNPL to their users. They’ve also connected with offline businesses without websites and they offer them this BNPL infrastructure by providing them with payment links for their customers.

“In 2023, the company will be adding self-service credit scores from the mobile and web app to help users check their credit scores with the three credit bureaus. There will also be a new web app that eliminates the need to download an app from an app store, bill payment services, a no-credit check product backed by your savings on Investyield and a Save to Own product.

“Payfi has gone from a dream shared by three individuals to a thriving start-up with $1 million in pre-seed investment, 50,000+ users nationwide, and N800m+ in GMV in 2022.” Philips Akinyele says “In 2022, we onboarded over 3000 new merchants that provided you with an option of over 100,000 products and services to shop from, and we also rolled out a new mobile app with an incredible interface.”

“With the launch of this product, Payfi has identified the pain point of all parties involved in financial purchases and has built a solution to address these points. With a product like this wealth creation becomes easier for Nigerians from individuals to businesses.”