FairMoney is a licensed mobile banking platform, providing instant loans to private and business borrowers, without collateral. This is a challenge to banks. Established in 2017, its objective is to empower individuals to meet financial obligations and enable start-ups to grow. The firm’s Head, Direct Marketing, Seun Oratokhai said the whole objective of FairMoney is to be inclusive and also provide individuals with resources to make their lives better. Excerpts
How would you assess marketing activities in the outgoing year?
The marketing space has changed. Today, brands are very savvy. Brands and consumers are now content creators. Marketing activities are heavily focused on digital platforms to connect with consumers. The consumer has changed and the way marketers communicate with them has equally changed.
What are your projections for the incoming year?
In 2020, I am actually looking forward to the continuation of the direction we are going. I am also looking at engaging consumers as our advocates more deeply. In Nigeria, we might be a little bit behind in terms of adopting digital, but marketers are becoming savvy in terms of data and analytics and this is directing a lot of business decisions. Already the tech space is booming in Nigeria; analytics is very key in determining the direction of business. Interaction with customers is becoming more valuable. Brands are not just pushing products to the consumer; instead they are trying to tailor their offering to meet the real need of the consumer.
Could you tell me more about FairMoney?
The firm was established in 2017 and the three co-founders have a lot of experience in entrepreneurship, start-ups and engineering. They saw a need in Nigeria to service customers who are either unbanked or under-served by traditional banks, particularly in terms of lending. Nigeria is a big market and they found an opportunity to help the average Nigerian with micro-credit without having to go through the long process associated with banks. The customers are split between individuals and SMEs. FairMoney is a mobile-based platform where customers can carry out payment transactions for airtime and data but can apply for instant loans which are processed within a few minutes. What we are doing is adding additional services as we grow. We will be launching other services such as additional payments, mobile wallet, savings, investments, and so on; so that any person who has the mobile device can actually carry out banking transactions through our platform.
In any lending there are forms of collaterals, how does FairMoney determine who it is advancing loans to?
We don’t collect collateral or documentation. What we base the assessment of the customer on basically is the information they provide on the app, their telephone number and the BVN. They also provide a guarantor. We have a very talented tech team who have created a sophisticated algorithm that scores every customer and determines the volume of loan we can offer such person and over what period of time. This is based on the activities the customers carry out with their phones; such as data from their banking activity.
How do you assess the activities of customers through their phones?
It is a sophisticated method with a long list of criteria we look for. Our App does the calculation once a customer applies for a loan.
What is the loan volume you offer to individuals and SMEs?
All the customers are assessed individually and the loan amounts vary from N1,500 up to N150,000. The feedback from our SME customers is how to obtain higher loans for longer periods. This is something we are working on. We have disbursed to over one million people loans since we started and the interest starts from about 12 %, depending on the customer profile based on the information we gathered in the application process. The tenure is from one to three months. And a good number of people are repaying. We are doing a lot of education around repayment and we make options available through our App to make it possible for people to repay easily. We also engage customers one-on-one to make sure the repayment process is easy for them. Sometimes when people don’t repay, it may not be because of fraud but financial difficulties or other challenges.
What other challenges do you face in this business?
It is not different from other challenges faced by businesses in Nigeria. When customers apply, the money will be sent into their bank accounts, if the bank is experiencing network issues, that is a challenge to us. Some of the challenges could be due to other platforms having challenges in their operations. We give a period of time before the first repayment is due.
Some time ago, you launched a ‘No Excuses’ campaign, could you tell me more about it?
In our environment, we have all been in situations when we needed soft loans from people and some give excuses for not advancing loans to the potential borrower. For traditional banks, they give conditions such as collaterals, asking you to domicile your account with them and they don’t work on certain days or hours but what we are trying to communicate is that FairMoney is a reliable friend without such excuses. Customers can apply for loans 24/7.
What are the expansion plans for FairMoney?
We will be expanding physically into other regions in Nigeria and other markets in Africa.