In this interview, the Chief Executive Officer/ Founder of Sparkle Nigeria, a mobile-first digital bank, Mr. Uzoma Dozie spoke on N1.3 billion ($3.1m) capital raised by a group of local investors for his firm, developments in FinTech. Nume Ekeghe presents the excerpts:
Your firm recently raised $3.1 million can you elaborate more on what it would be used for?
The Funds would be used for marketing, people, and infrastructure. On the marketing side, being that we launched a year ago and, in that time, we’ve actually allocated resources to building the platform, products and services and haven’t done anything in terms of spending to create an awareness. We are proud to say that we are recognised as one of the digital banks in Nigeria but not many people know about sparkle. So, we need to create awareness and enlighten people on Sparkle and why we are different and the segments we are actually focusing on.
You find that most digital bank are focused on individuals but also have a small business proposition, which is really the exciting part, especially as anybody that wants to start a business can open a business account without actually going into a banking hall and would have access to non financial business support services that you do not find on any other app today, or any bank or banking position such as payroll, inventory and taxation.
Also, we would spend on people; we are going to start lending in three months so we need to bring in more skills with senior and experienced people to manage our services. Finally, on infrastructure, we would invest in to help mitigate risks.
Still on the recent funds raised by your firm, what prompted your firm to accept only local investor and why was it raised in dollars?
First of all, we are building an ecosystem at Sparkle and, I’ve always believed that there’s different types of money, there’s money you can get money from anywhere but then there is money you can get people who have money to give as well as access to their network. I have worked in this industry for 20 years and I’ve made network and it would a shame if didn’t leverage on it
We believe in diversity; this is a seed round and the next should be a series round invite other people and internationals. We raised the money in Naira and not in dollars.
On the Central Bank Bank’s E-naira, which would roll-out any moment from now, are there plans to adopt this digital currency by your firm?
If given that opportunity, we definitely will. I mean you only have to download our app and see what we have done with QR code payment from NIBBs (Nigeria Inter-Bank Settlement System Plc). I think we probably have one of the most seamless and easy to use QR payment systems. I think, the more payment alternatives people have especially if they’re digital, the more you will see adoption and utilisation of digital and electronic payment.
We’re definitely excited and we hope that will be one of the people that they choose for trail because I believe we have the capabilities, customers and probably have one of the best applications experience for QR payments.
Still on E-naira, do you think it would disrupt bank profits especially as the regulators have hinted that it would be cheaper than existing bank charges?
Technology disrupts and with technology, new opportunities new businesses have been created. Yes, there might be some changes in the way some organisations generate income but the E-naira would create new opportunities, new products and services that would ride on the back of them. An industry would now evolve around the E-naira to create new opportunities and new income streams also for banks and financial organisations that can leverage on this opportunity.
This is another electrical no cash alternative, and the more choices they are, the higher the adoption by people that like choices.
Banking services are tilting more to digitisation and your firm is a frontrunner in this space, however some still feel comfortable in visiting brick and mortar branches. Do you have plans to set up physical branches?
There is this expression, if you think big, start small, move fast. We have a big challenge and with big challenges are big opportunities. We have under banked Nigerians who are not getting proper banking services or who don’t understand how to get loans. You have over 30 million businesses that are underserved by banks. Banks actually have been very good at saving big corporates or individuals, but have not built solutions that leverage on technology to create solutions for small businesses.
Are there plans to upgrade your banking license to enable your firm broaden your services?
The license we have now allows us to do those things that millions and millions of people do not have access to. Now, if the licensing regime changes and then we can do other things or we feel that we need to increase our capital regardless we will. We believe that we don’t need foreign exchange license to help people’s business. We don’t need branches because what we have done is to partner with one of the big traditional so we don’t feel free to do that. We need to use our capital wisely to in building a strong system, building products and services allow us to give them confidence to come into banking and I think our license allows us to do that.
What will make us change our license is changing regulation or changing customer lifestyle. If we decide we want to go into physical location, we would look at our strategy. We are nimble, we’re mobile and so that we can change based on customer behavior.
You mentioned earlier you plan to start giving loans in three months, can you tell us how competitive it would be compared to other digital banks as well as brick and mortar banks?
I have worked in a traditional bank and they like to lend low I always thought that is because of lack of information or lack of data that those prices were high because you are pricing for the uncertainty. If we’re digital bank, we must leverage on data and what we would do is lend lower than what traditional banks are lending and lend faster than what digital banks. So, we would offer speed and better pricing compared to both; better than traditional digital banks. Also, it is about creating a better customer experience.
Can you speak on the services Sparkle offers that set it apart from other digital banks?
If I break it down to products and service, it would be very boring. Everybody lends, everybody sends money and everyone makes payment but for us it is how you do it. We have made access to information on accounts easier to in a bid to make decisions. Also, for people whom you don’t have their account details, all I have to do is raise a payment link and send to the person either through WhatsApp or text messages and they can access their funds without me getting their account details. We are also working with different partners to get loyalty points, which they can redeem with these partners. There is a lot on the ESUSU part and the way we would do our ESUSU would be sparkling like our name. Our mission is to make the world sparkle and that is by creating great customer experience and leveraging on technology. I have worked in traditional bank and fintech so I do understand the power of technology and I think when it comes to digital leadership, there are not many people who have done what we have done.
