Oluwatobi Boshoro, CEO of Renmoney, a leading fintech lending company in Nigeria, in this interview with Mary Nnah, bares her mind on the recent launch of the company’s new product called, Micro Business Loans, how and why it is focused on assisting budding entrepreneurs to grow their businesses. Excerpts:
Renmoney recently launched its micro-business loan product. Tell us more about this product and what differentiates it from existing loan packages?
This product was specifically created to target small business owners in order to enable them conveniently access credit quickly. The product comes with flexible repayment options and reduced documentation.
What were the factors that determined the launch of this product?
We saw the need to make financial inclusion count for an unserved segment of the market. This product was borne out of the need to cater to the challenges faced by small businesses when it comes to accessing credit and to support economic growth (over 70 per cent of the workforce are employed by SMEs). Micro- businesses are the life of any economy. These businesses are perceived as being more risky than large businesses. Also banks are not compelled to issue credit to them. This informed Renmoney’s decision to start lending to them.
You must have had formal or informal engagements with small business owners and entrepreneurs. From your discussions with them, would you say accessing loans is one of the most challenging factors they face while running their business?
Yes, SMEs have great ideas and are hard-working; however, access to funds still remains a major challenge for small businesses majorly due to the requirements.
Many small business owners say they are reluctant to take loans from commercial banks, microfinance banks, and consumer finance organisations due to factors like interest rates and the cumbersome process of accessing the loan facilities. How is Renmoney different from other financial institutions in this regard?
Our processes are automated, as customers can apply for a loan facility on our website www.renmoney.com. We have also trimmed the number of documents needed to apply to just three. Customers do not need to visit our offices, and they can get funds within 24 hours of application if they meet all requirements. We also have our mobile kiosks in Lagos which brings us close to customers.
Can you list the requirements which businesses have to fulfill before they can have access to these loans?
With just three documents, customers can apply for a loan. Documents include recent six months bank statement, valid ID (National ID, Driver’s License or Voters Card) and recent utility bill (electricity bill, water bill etc.)
Are there other finance facilities that small businesses can take advantage of at Renmoney?
Yes, there are other financial facilities that can be of benefit to small business owners. Small business owners can invest in our Fixed Deposit product and earn up to 19 per cent interest on their investment or go for our Target Savings product and earn interest of up to 10 per cent.
How many business loans do you hope to have given out by the end of 2019?
We’re working to scale this solution in the most responsible way as we already have over 10,000 loans granted.
Are there particular sectors of MSMEs that you will be giving more attention to in regards to credit?
We welcome all self-employed individuals and business owners. Renmoney has been able to understand and cater for the credit needs of the employed. However, the self-employed needs credit too.
How would Renmoney guard against the risks associated with lending to micro-businesses?
By improving our technology and refining our algorithms. With the help of data science and decision technology, we are able to make intelligent and responsible lending decisions.
Are you exploring the option of issuing credit to more women as a way of increasing financial inclusion for women?
Female representation last year was around 30 per cent and we are looking to increase the percentage of women who have access to our facilities this year.
Why did Renmoney choose to venture into the business of providing loans for individuals and small businesses?
As a business, we are passionate about driving financial inclusion and we saw the need to solve credit challenges faced by Nigerians.
Lack of access to data is a big challenge in the Nigerian environment. Yet organisations like Renmoney would probably operate better with access to accurate data. How has the organisation managed to operate despite the challenges in accessing requisite data?
With regards to gathering data, the BVN has been helpful. We also work with credit bureaus and information provided by our customers. We use these data points to refine our algorithms better.
Going by your resume, you have always worked in the financial technology space. What fascinates you about the fintech space?
I got fascinated by the drive to work with solutions that genuinely make life better for the average man/woman on the street and in the long run, contribute to the growth of the economy.