Business Director, Emerging Markets, Mr. Charles Ibonye and Product Manager, Unified Cooperative Platform, Mr. Lateef Fadeyi, both from CWG Plc, spoke to Emma Okonji on the need for government to develop cooperative societies with right technology tools for economic growth. Excerpts:
Cooperative societies, just like Small and Medium Enterprises (SMEs), are veritable platforms for economic growth. What is your view about government’s position on cooperative societies?
Cooperative societies in the country have been neglected by past governments. There is need for government’s intervention to address the challenge of neglect of the cooperative society members. There is also need for government to establish a commission that will support and regulate the cooperative sector of the Nigerian economy. Government has an obligation to develop the SMEs, especially the cooperative society members to enable them become self reliant and create more jobs. With the proposed commission, government can provide support for members and help them to scale up their businesses. Empowering cooperative societies is key to national development and government must understand this and provide the necessary support.
We have long discovered that members of cooperative societies have been neglected by government to the extent that government do not have appropriate data on them and again, majority of them do not have proper record keeping of their transactions, which makes it impossible for them to get government loan as well as foreign grants and support. In order to address the challenge, CWG developed the Unified Cooperative Platform (UCP) solution, which is a mobile app that facilitates electronic transactions on mobile devices and addresses the challenges of cooperative societies and position them for future growth.
What is the UCP solution all about and what does it seek to address?
Before I explain details about the solution, I will like to give a brief overview of CWG Plc as a company and how we were inspired to develop the solution. First of all, CWG is a technology company and we deploy technology to enable people. From history, we have been building platforms and one of the platforms that we have developed for SMEs, is Enterprise Resource Platform (ERP). Over time, we have realised the need to help small businesses that are at the bottom of the pyramid. We have looked at their challenges and one of the major challenges that we observed about cooperative societies is that they do not have proper record keeping, and there are no data that will enable government to support them. International donors that want to give them grants cannot do so because they have no proper record and data to even locate them. So it is a major challenge, because without data, they will not have visibility. Again, the time it takes them to process an operation is pretty much and these actually inspired us at CWG Plc to develop the UCP solution. We then went to the National Cooperative Federation Association of Nigeria (CFAN), and we looked at how best we can work together to provide a centralised platform where most of the cooperatives today can use to manage their basic operations. We also realised that a lot of the members in the cooperatives today do not have access to any other financial means, except through cooperatives. And from our research, we found out that over 14.8 million of them do not have other means of accessing cash except through the cooperative bodies. Members of cooperative societies are large in number and having identified their challenges, we came up with the Unified Cooperative Platform solution.
So what exactly inspired CWG Plc to develop the solution for that segment of the market?
So today, within the cooperative society, there is no visibility, and some set of people who are mostly executives, are the ones running it and members do not have visibility into what they are doing and do not have proper accounting record. By the time you go to them to submit any form or report, be it their financial report, they find it difficult to access information. Some cooperatives need to employ a bookkeeper to help them with all of these record keeping and it takes them up to seven days to do so, because they need to pick up the forms, fill the forms manually and get a guarantor since they do not use collaterals.
These are challenges that inspired us to develop the solution that we think could feel the gap within the cooperative ecosystem.
Another major challenge is that even when you eventually submit your application form, you still need to follow up with calls, because some people would have submitted their forms and at the end of the day their forms will disappear. So the sector is just not properly organised and we were moved by such challenges.
So let’s look at government’s role in all of these. How can government intervene to further help drive the solution?
We need a lot of government intervention in this and one of the things we are already advocating through CFAN is to have a commission similar to that of Corporate Affairs Commission (CAC) that will regulate the sector and help develop the small medium enterprise sector that are over 34 million. Imagine that at the end of the day, each one creates a job, and that will amount to creating over 34 million jobs over a period of time as you begin to develop that sector. So, when we talk about jobs, they are the fastest that can create jobs, and they are the ones that can develop the GDP of the economy. So if they have the right support and the right environment, they will turn around the economy faster than we can imagine. One critical thing that we need to focus on is capacity development, and we have been doing that, and that’s where we really need the government support as well. On capacity development, we have the skills, we’ve identified the people, but we need to scale. So we need funding from government to be able to do capacity development for these people. We also want to expand in terms of our technology research, and once there is a commission, there will be focus.
The Central Bank of Nigeria (CBN) is driving cashless policy, which seeks to support electronic payment and to reduce physical cash flow, and that is what your solution is also driving at, which could result in conflict of interest. What do you think about this?
Our solution is actually addressing what CBN seeks to address with its cashless policy, and in my view, our solution complements that of CBN cashless policy without any conflict of interest. If members of cooperative society want to make payment safe, it’s either they take the cash to the cooperative office, or they have an agent go round to the market women to get the cash. But with our solution, they do not need to carry cash anymore. All they need do is to key into our solution which is like a banking app that will enable them see their savings at a glance. If today I want to make a transfer to my cooperative, I can make it online real time, and once I make it I see the transaction history. So our solution is giving access to people in the rural area as well because we’ve integrated the app to players like the insurance and affordable homes and some other programmes that CFAN is participating in. With our app, cooperative members are able to access those programmes and information that are required. The objective for CBN this year is to ensure that about 8.3 million people are brought into the financial system. What this means is that those adult population that are excluded, will then be included through our solution. So our solution is helping to create the best agency network through the cooperative societies to drive agency banking that will bridge financial inclusion gap.
Since your mobile app supports electronic transaction among cooperatives in rural communities, how simplified is your app for ease of use by rural dwellers, who may not be schooled?
We saw that challenge ahead that most rural dwellers are not schooled and we made the solution very simple to use and aside that, we usually organise training programme from time to time for rural dwellers on how to use the solution, which is all about capacity building on digital products. With our solution, we are also creating jobs within some cluster of cooperative societies. It is like using the agency network to carry out ‘train the trainer’ programme who will in turn go into each of these clusters to train the market men and women.
So how robust is your solution in addressing the needs of over 14.8 million cooperative customers across Nigeria?
We have positioned our infrastructure and our platforms in such a way that it is robust enough to serve even 30 million cooperative members. So today, as we speak, the platform can take over 30 million cooperative members on real time services. At all time the solution has 100 per cent availability because we don’t want it to be down at any time, we have also ensured a strong security framework around the solution to ensure that all data are secured and the next person doesn’t have access to other customers’ data, and everybody has his unique access to his own data for each cooperative and for each member.
Do you have plans to expand to other sectors of the Nigerian economy, outside the financial sector?
In the area of expansion, we are looking at expanding more around the value added services that we provided already on the platform. So that is one of the key focus now, without necessarily taking away the core banking transactions. We will be working with the core banking sector, because we can’t do without working with them. We will also expand our services around the agency banking where we now have an agency to develop that app for agency network, in other order to scale and reach out to more people in the rural area. So those are the kind of expansion we are looking at. We are also looking to expand this to the various African regions where we operate today. So currently we operate in Ghana, Cameroon, and Uganda and we are looking at having that expansion to these regions to make the platform available within the regions in Africa as well.
Despite these solutions designed to drive cashless, Nigeria is still perceived as a cash-based nation. Why is this so?
Your question is all about adoption of new technology and generally people find it difficult to adopt new technology which is a general problem, and not a technology problem. So for me what I feel we could do to change people’s orientation about accepting new technology is to create more awareness. So, we need to create more awareness, which is one of the reasons why we need to present our platform to customers at every point and in every function they attend. We must be close to them to tell them about the importance of technology adoption. Some people may find it difficult to accept new things for the first time, but over time, they will accept, and so we just need to keep creating the right awareness. Fear of adoption is the reason why Nigeria is seen a cash-based society despite the several technology solutions that are geared towards achieving financial inclusion. With more awareness, people will see the need to avoid carrying cash. So the heavy circulation of cash in the society is not as a result of insufficient technology solution, but general challenge that needs the attention of government. Some people have already made up their minds that the use of technology will expose their data vulnerability while most Nigerians also feel that the moment they sign on to mobile banking system, their bank savings are exposed to online fraud, but all these must change though intensive campaign and awareness creation on the part of government.
Your solution rides on network connectivity and broadband access. Do you see the high cost of broadband affecting the adoption rate of your solution?
One thing I want people to realise is that we have advanced beyond the issue of connectivity challenges. Last year, Nigeria had a set target to achieve 30 per cent broadband penetration at a time when cost of internet bandwidth was on the high side, but today we have reached and also surpasses the 30 per cent broadband penetration, to reach 33.2 per cent broadband penetration. So if you also look at the cost that we used to buy data before, you will realise that cost of data has dropped from what it used to be. Today, the penetration of mobile phones and smartphones have increased and the cost has also reduced, but there is need for further drop in cost to increase access to connectivity. Our target is to deepen broadband and smartphone penetration and also reduce cost. We are aware there are connectivity issues, and it is the reason we established our agency banking where trained agents interact with people where there are no networks, and still make transactions possible, by using our mobile app.
What will you say are the added value of your UCP solution to cooperative societies?
The added value is huge, and the first thing we are providing is realtime access to the cooperative members, and we are also providing accountability, access to information, making payment a lot easier and also creating jobs. Again government can, through our mobile app, gain accessibility to a cooperative societies in the country, which will enable government to do proper planning. It will help government and international donors to properly monitor members of the cooperative societies after grants have been given to them.
What will you say is the economic value of your solution?
The economic values are equally huge because they will make cooperative societies work smatter in accomplishing their daily tasks. It will make operational efficiency a lot easier for these cooperatives, so it makes them more efficient, and it will help them to be more creative. One other major economic impact is that through the solution, we will be able to bring huge number of people that are excluded from the financial system into some form of inclusive financial system, where the government can plan and work towards scaling them to the next level.
So the solution will give them that visibility that will grow their businesses.
Now that CWG has the solution, how can cooperative societies key into the solution?
To them to keep into the solutions and services that we are offering, they need to register by first visiting our website, www.coopplatform.com.ng to register as a cooperative or as a individual member. Members can download the mobile app from Google Playstore or Apple Store and search for CWG UCP and they will see the app and download the app. So they can have easy access to the mobile app on the go, just simple like the banking app today, where customers can do most of your banking transactions. That is what we are trying to achieve with our mobile app as well, where they can do their transactions. So when cooperative societies register, its members can have access to the app.
How critical is the adoption of your solution to cooperative societies?
Adoption is very critical and that is why we are engaging CFAN to drive the endorsement and adoption, the reason being that technology has been able to scale us twice as fast as the regular way we do things. And what we are doing is leveraging technology to do things quicker and faster.