Adaobi moved to Lagos, Nigeria’s commercial capital in 2018 from Enugu hoping to secure a high paying job in 2018, but when none was forth-coming, she decided to embark on the entrepreneurship journey. To realize this, she approached her bank for a business loan.
After weeks of filling all sorts of forms, Adaobi was eventually notified that her loan request had been declined.
“I filled many forms, went to the bank a couple with the hope that they will give me the loan since it was N250,000 to start my business. But I was disappointed when I was turned down,” Adaobi said.
Her experience is one tale out of the many about the different hurdles Nigerians face when trying to access financial services.
But the advent of financial technology is changing all of that as many non-bank businesses are springing up and offering financial services such as; quick loans, bank accounts, savings and investment wallets, payments and lending to a tech savvy audience (banked and unbanked) – without statutory documentation.
The concept of companies offering bank or financial like services to the public is known as embedded finance. The aim is to simplify financial service processes for consumers, making it easier for the public to access money-related services they need, anytime, anywhere.
Imagine not having to approach a bank physically for loans, paying cash when making purchases at a store, logging on to your bank app before making a money transfer, buying global stocks from the convenience of your phone apps, buying insurance on a product when making a purchase, investing your money without needing a fund manager, purchasing a product now and paying later. Those are some of the things embedded finance is enabling.
According to a Forbes report, the estimated market value for embedded finance will be over $138 billion by 2026. It is therefore clear that it’s not just a financial trend, it’s the future of transactions.
Fintech startups like Piggyvest, Kuda, Bamboo, Flutterwave, Paystack, Paystack, RiseVest, FairMoney, Branch, RenMoney, Risevest are a few of the non-traditional finance entities offering customers embedded finance services in savings, loans, investment, money transfer, invoicing etc.