In Nigeria, the phrase "health is wealth" carries a bitter irony for millions. For many, accessing quality healthcare feels like a luxury, not a right. Picture Mama Ifeanyi, a market trader in Lagos, struck by a fever. Instead of heading to a hospital, she visits a local chemist, where a salesperson—without medical training—recommends a drug after a brief chat. A few days later, she’s back on her feet, praising the chemist to her neighbours. But what Mama Ifeanyi doesn’t know is that her reliance on out-of-pocket payments and unregulated remedies is a gamble with her life. This is the reality for millions of Nigerians, where out-of-pocket healthcare spending accounts for a staggering 75% of health expenditure, one of the highest rates globally. Nigeria’s healthcare system lags behind African leaders like South Africa, which scored 63.8 on the 2025 healthcare index, and Kenya, with 62 points, both reflecting robust systems. Nigeria, by contrast, ranked 87th globally in 2024, a stark reminder of the work ahead. The path to change lies in fixing three critical barriers: awareness, cost, and access.

The Crushing Weight of Out-of-Pocket Payments

Why do so many Nigerians, like Mama Ifeanyi, bypass hospitals? It’s not just habit—it’s economics. A three-day stay in even the smallest clinic can cost upwards of ₦50,000, a sum that is almost at par with Nigeria’s minimum wage of ₦70,000 per month (as of 2024). Nigeria spends just $10 per person on health annually, far below the $86 needed for universal health coverage, according to global health standards. The result? People turn to self-medication or street pharmacies, risking misdiagnosis and complications. A 2021 Dataphyte report revealed that 97% of Nigerians lack health insurance, leaving them vulnerable to catastrophic medical bills. In 2018, Nigeria ranked third globally for out-of-pocket health spending at 76.6%. These numbers aren’t just statistics—they’re stories of families pushed into poverty by a single hospital visit.

I’ve seen this firsthand. A friend’s mother delayed treatment for a chronic condition because she couldn’t afford the hospital’s deposit. By the time she sought care, her condition had worsened, requiring costlier interventions. This isn’t just a personal tragedy; it’s a systemic failure. Health insurance could have saved her years of suffering, but she, like many, didn’t know it was an option. This brings us to the first hurdle: awareness.

Awareness: The Missing Piece of the Puzzle

Health insurance in Nigeria suffers from an awareness crisis. A 2025 survey by Dean Initiative found that 1,556 out of 4,188 young Nigerians had never heard of health insurance. That’s over a third of respondents, and the numbers are likely worse in rural areas. Without understanding what insurance is or how it works, people like Mama Ifeanyi see hospitals as predatory, not protective. They don’t know that for as little as ₦15,000 a year—the cost of the Lagos State Ilera Eko Standard Plan in 2024—they could access quality care without breaking the bank.

To change this, we need to take a page from Nigeria’s marketing giants. Companies like MTN and Coca-Cola plaster their brands across billboards, radio jingles, and market stalls. Fintechs like Opay and Moniepoint turned sceptics into digital banking users by embedding agents in communities and simplifying onboarding. Health insurance needs the same energy. Imagine Ilera Eko stalls in every major market, with agents explaining plans in local languages, working through trusted community leaders like the Iya Oloja (market women’s leader). These leaders could champion enrolment, ensuring no one resells plans for profit—a risk that must be tightly monitored.

Social media campaigns, tailored to Nigeria’s youth-heavy population, could also bridge the gap. Short, relatable videos showing how insurance saves money and lives could go viral on platforms like TikTok and Instagram. Community outreach, backed by government and private partnerships, could bring these messages to remote areas. As Semiye Michael of Dean Initiative said, “We need to challenge existing policies and explore new ways to ensure health services are accessible.” Awareness isn’t just education—it’s empowerment.

Kenya offers a powerful example. A 2023 survey revealed Kenya had Africa’s highest private health insurance penetration rate at 42%, driven by a competitive insurance market and innovations like M-Tiba and mTek-Services. Mobile-based solutions, rooted in Kenya’s Mpesa ecosystem, have simplified access to insurance, making it as easy as a few taps on a phone. Nigeria, with its thriving fintech scene, could emulate this, leveraging platforms like Opay to push insurance awareness to the masses.

Cost: Busting the Myth of Unaffordability

The second barrier is cost, or rather, the perception of it. Many Nigerians assume health insurance is a luxury for the elite. A 2024 NOIPolls survey found that only 19% of adults have health insurance, with high cost cited as a major deterrent. But here’s the reality: basic plans are more affordable than most realise. Some HMOs offer coverage for as low as ₦300 per week—less than the cost of a daily meal for many. The National Health Insurance Authority (NHIA) plan, which covered gynaecological services and surgeries, cost ₦15,000 annually in 2024, rising to ₦38,000 in March 2025. For women of reproductive age or those with chronic conditions, this is a lifeline.

The problem? These prices aren’t widely advertised. Visit the Ilera Eko website, and you’ll struggle to find clear pricing for plans. Transparency is critical. If we’re serious about inclusion, HMOs and state schemes must display plans, prices, and benefits upfront, just as e-commerce platforms list products. Burying costs breeds mistrust and confusion. Imagine a world where every Nigerian knows they can pay ₦15,000 a year for peace of mind—wouldn’t that change the conversation?

P.S.: Almost all of the states in Nigeria do not have a clear plan and pricing on their websites. See some examples below.

Kenya’s success underscores the power of affordability. Its competitive insurance market has driven down premiums, making coverage accessible to 42% of the population, compared to Nigeria’s 19%. Botswana follows at 37%, while countries like Guinea and Ethiopia languish at 9%. Nigeria can learn from these leaders by fostering competition among HMOs and ensuring prices are visible and reasonable.

Beyond transparency, affordability can be boosted through innovative financing. Dean Initiative’s survey recommended health taxes on tobacco, alcohol, and sugary drinks to fund subsidies for vulnerable groups. Expanding the Basic Health Care Provision Fund (BHCPF) from 1% to 2% of Nigeria’s revenue could also lower premiums. These aren’t pipe dreams—they’re practical steps other countries have taken to make healthcare accessible.

Access: Bringing Insurance to the Last Mile

Even with awareness and affordable plans, access remains a choke point. Health insurance feels like a premium club because distribution is broken. Nigerians don’t know where to sign up, and when they do, they face long wait times at understaffed hospitals. Nigeria’s doctor-to-patient ratio is a dismal 1:10,000, far below the World Health Organisation’s recommended 1:1,000. A 2025 budget analysis by Dataphyte showed health spending at less than 5% of Nigeria’s budget, against the WHO’s 15% benchmark. This underinvestment cripples access to care, even for the insured.

Fixing access requires a two-pronged approach: seamless enrolment and robust healthcare delivery. On enrolment, let’s learn from fast-moving consumer goods (FMCG) companies. Dangote and BUA cement reach Nigeria’s deepest villages despite logistics challenges because they’ve mastered last-mile distribution. Health insurance can do the same. Set up enrolment kiosks in markets, churches, and mosques. Partner with fintechs to integrate insurance payments into mobile apps and POS like Opay, Palmpay and Moniepoint, where users already trust digital transactions. Kenya’s M-Tiba platform shows how mobile tech can streamline enrolment, a model Nigeria could adapt to reach millions.

On healthcare delivery, we must address hospital wait times and quality. South Africa and Kenya lead Africa’s healthcare index because they’ve invested in facilities and staff. Nigeria’s 87th global ranking in 2024 reflects underfunded primary health centres (PHCs) and overworked doctors. Training more healthcare workers and equipping PHCs is non-negotiable. Dean Initiative’s survey called for youth-friendly training for providers, which could reduce stigma and encourage uptake. Expanding PHC networks, especially in rural areas, would ensure insured Nigerians can access care without travelling hours.

Designing a Healthier Future

The rise of out-of-pocket payments isn’t just a symptom—it’s a signal that Nigeria’s healthcare system needs a redesign. Awareness, Cost, and Access aren’t isolated issues; they’re interconnected pieces of a puzzle we can solve. As a marketing and product professional, with experience driving insurance products (Curacel 😊), I believe the solution lies in human-centred design. We must meet Nigerians where they are—physically, financially, and culturally. That means taking insurance to the streets, making costs clear and affordable, and ensuring hospitals are ready to serve.

Mama Ifeanyi shouldn’t have to choose between a chemist’s guess and a hospital’s bill. With the right reforms, she could walk into a clinic, flash her insurance card, and get quality care without fear. Nigeria has the tools to make this happen: a vibrant population, a growing fintech ecosystem, and a legacy of community resilience. South Africa and Kenya show it’s possible—Nigeria can join them.

Let’s start the conversation. How can we bring health insurance to every Nigerian? Share your thoughts, because together, we can design a future where health truly is wealth.

Growth is inevitable. Throughout the history of mankind, one thing that's been a constant is growth (evolution, innovation, advancement etc.). Today, the technological advancement in the financial sector in the world cannot be overemphasized albeit more in the Western region due to the profitable policies of their national leaders which promote economic development unlike what is obtainable in Africa and Nigeria is not exempted. All the same, we (Nigeria) are advancing in technology and one area is that of finance. 

Zooming In. Fintech (financial technology) is the use of computer programs and other technological innovations such as online banking - Kuda Bank, Moniepoint, Moor Pay, Opay, mobile payment apps and cryptocurrency to power and drive banking and financial services. While the emergence of these fintech innovations has played a pivotal role in immensely improving the all-round banking/financial operations in the country, as much as there are benefits, there are also minor drawbacks. And this is what I'll be discussing with you today.

Mobile Payments: Benefits and Drawbacks

Mobile payment is the use of a mobile device, such as a smartphone or tablet, to make financial transactions. This can include everything from making a purchase at a store to paying bills to transferring money to friends and family.

Sponsored: Experience fast transfers. Download Moor Pay app!

With the rise of mobile technology, mobile payments have become increasingly popular, and many businesses now accept transfers from mobile payments. However, as with any new technology, there are both benefits and drawbacks to using mobile payments.

In this article, we will explore the benefits and drawbacks of mobile payments and help you decide if this method of payment is right for you or your business.

Benefits of Mobile Payments

1. Convenience

One of the biggest benefits of mobile payments is the convenience they offer. With a mobile device, you can make payments from anywhere and at any time. This is especially useful for people who are always on the go or for those who don’t have easy access to traditional forms of payment, such as cash or credit cards. For example, you can use a mobile payment app to make a purchase at a store in just a few seconds, rather than waiting in line to pay with cash or a credit card.

2. Security

Mobile payments can also be more secure than traditional forms of payment. This is because mobile devices have built-in advanced security features, such as fingerprint or facial recognition, that can help prevent fraud. Also, many mobile payment apps use encryption to protect sensitive financial information. This means that your financial information is less likely to be stolen or compromised.

3. Speed

Mobile payments can also be faster than traditional forms of payment. With mobile payments, you don’t have to wait for a credit card or check to clear. Instead, you can make a payment quickly and easily. This can be especially useful for businesses that need to process a large number of transactions quickly. One app that has this feature is Moor Pay - transactions are super fast⚡. Takes less than 5 seconds to complete. Try it!

4. Rewards and cashback

Some mobile payment apps also offer rewards or cashback for using the app to make a purchase. For example, you may earn points or cashback for every purchase you make with a mobile payment app. This can be a great way to save money and get more value out of your purchases.

5. Increased Accessibility

Mobile payments also have increased accessibility for people who may have been previously excluded from traditional forms of payment, such as those without a bank account or credit history. Mobile payments allow for financial transactions without the need for traditional banking infrastructure. All you need to do to own an account that can receive and transfer money is just use this link to download Moor Pay app and the rest is history.

Drawbacks of Mobile Payments

1. Limited acceptance

Although mobile payments are becoming more common, they are still not accepted everywhere, most especially among senior citizens who are not "used to modern facilities" and some persons who have had a negative experience using such payments. This means that you may not be able to use your mobile device to make a payment at certain marketplaces, stores or businesses. This can be a major inconvenience, especially if you’re in an area where mobile payments are not widely accepted.

2. Technical issues

Another drawback of mobile payments is that they can be subject to technical issues. For example, if your mobile device is lost or stolen, your network providers are having some challenges, or if the app you are using to make the payment experiences a technical glitch, you may not be able to make a payment. This can be frustrating and can cause delays in completing transactions.

3. Dependence on internet connection

Some mobile payment apps require an internet connection to work. If you don’t have access to the internet or if your connection is poor, you may not be able to make a payment. This can be a problem if you’re in an area with poor internet connectivity or if you’re travelling in a foreign country where you don’t have a data plan.

4. Security risks

Mobile payments also carry some security risks. For example, if your mobile device is lost or stolen, or if you download a malicious app, your financial information may be at risk. It is important to be aware of these risks and take steps to protect your financial information, such as using a strong passcode on your mobile device, activating biometrics and 2FA’s, and only downloading apps from reputable sources.

5. Extra Fees

Some mobile payment apps may charge extra fees for transactions which can add up and make it more expensive than traditional forms of payment. This can be especially problematic for businesses that process a high volume of transactions.

In conclusion, there is no going back totally to analogue banking, the future is now with digital financial services such as mobile payment apps, integrated payment services etc. which offer a lot of seamless convenient money transactions and security, so in spite of a few drawbacks, it’s important to rather than decide not to go with the global trend and become technologically obsolete, you take steps that will prevent you losing your money to fraudulent companies like making sure to use a reputable app and also take steps to protect your financial information at all times. 

Why You Should Download Moor Pay:

✅ Transactions are super fast⚡. Takes less than 5 seconds to complete. 

✅ Experience seamless, reliable and secured payment transactions.

✅ Low transfer fees. Pay a flat fee of N25 for all transfers above N5000

✅ Spend + Save. I love this feature. Every time you spend, a percentage of that amount is saved in your pocket. 

✅ Amazing customer support and experience. I am your personal support manager. Have issues? Send me an email at o@zaidi.com.ng or SMS/WhatsApp -  0916 217 1134. And I will respond as fast as possible.

Download the Moor Pay app now!

Id El Maulud is a day set aside to celebrate the birth of the Holy Prophet Muhammad.

And also, that means we have just 3 months to the end of the year!

Wow, what a time to be a Nigerian. So much uncertainty surrounding the economy, market forces, hikes in school fees, inflation, surging petrol prices, CBN-driven monetary policies, and even the student loan saga and so on - the list is endless. In spite of all these though, we move on as one of our most common phrases, especially in our universities says "A luta continua; vitória é certa". We can have victory over sapa and its cohorts, and one way to do that is through effective budgeting.

A budget can be one of your best defences against sapa and a trusty tool in your journey to wealth creation — no matter how much you earn. But do you know exactly how to create a budget? Well, that’s what we are here to help you figure out.

You can create a budget by setting a realistic budgeting goal, deciding on a budgeting period and reviewing your income for that period. Then, you’ll need to list and label your expenses, set a spending limit and savings goal and adjust your budget.

We are talking personal budget.

Alright now, let's put sapa to flight with these 10 simple steps on How to create a budget

In this article, we’ll show you how to create a budget that works in Nigeria. Let’s go!

1. Prepare all the tools you’ll need to create a budget

You’ll need a pen, paper and a spreadsheet or budgeting app (You can start with Moor Pay's app). You might also need to open your spending or bank app (Moor Pay's app again) to review your income and previous expenses. Track your income and expenses. Tracking every part of your finances can help you understand your money and aid your budgeting efforts. Still, keeping a detailed record can be exhausting, so we recommend using (Moor Pay’s app) to ensure you always have access to detailed records.

2. Set a realistic budgeting goal

This step might seem odd, but having an end goal in mind can help you make a fantastic practical budget. Decide on the purpose of the budget and write (or type) it down. For example, you could create a budget for that much-needed vacation and name it “Are we there yet?”.

3. Create a realistic budget based on your income and expenses.

Don’t try to copy someone else or set unattainable goals. For example, you might need to set aside more money to eat out if you’re too busy to cook.

4. Review your income for the budgeting period

Write down your salary, wages, allowances and every other source of income you have coming in. Add them all up and note it down in your notebook, spreadsheet or budgeting app.

Download the Moor Pay app! And start saving stress-free today.

5.  List your expenses for the period

Write everything down — from your cable subscription and data subscription to food items and “chop life” money. You can use your payments or banking app (Moor Pay's app) to review the previous period’s expenses if you have trouble remembering everything

6. Label your expenses as fixed or variable

Fixed expenses are unavoidable and include electricity bills, food and health insurance. Variable expenses, however, are more flexible and include items like your Netflix subscription and gym membership. Note: Always prioritize essentials. Your needs (fixed expenses) must always come first when you’re creating a budget. For example, getting a new phone when your rent is due is not a great idea.

7. Calculate your budget surplus or deficit

You can do this by subtracting your overall expenses from your total income. This step will help you decide what items to remove or add to your budget. You can also use it to determine the minimum (or exact) spending amount you need for your budgeting period.

8. Set a spending limit

You can apply the 50/30/20 rule when setting a spending limit by allocating 50% of your income to your needs and 30% to your wants. The remaining 20% should go into savings, investments and debt servicing.

9. Create a savings goal

Saving is essential to any budget, and we recommend simplifying the process using Moor Pay's spend and save feature to get returns of up to 15% — depending on the plan you use. You can save any amount, but putting aside 20% of your income is a great place to start.

10. Make adjustments to your budget

The purpose of a budget is to give you control, so don’t be afraid to tweak things if your original budget isn’t working for you. In fact, we recommend reviewing your budget as often as possible to ensure it fits your spending habits and income level.

See, It’s that easy!

Follow these tips, and you should be able to make the most of your money even if $1 is exchanged for ₦1,000.

Note that the steps we shared above are for creating personal budgets, and might not necessarily work for other types of budgets. Still, the steps are handy and tailored for the Nigerian experience, so you can try creating yours right now!

A note of caution: While budgeting can be super effective, some common mistakes (like setting unrealistic goals) can affect the impact of your spending plan or even discourage you from budgeting. Avoid them!

P.S.: One way to start saving without all the stress that comes with it. Use the Moor Pay “Spend + Save” feature. What it simply does is take a percentage of your spending and save it for you. The good part? You can withdraw it anytime you want. 

Download the Moor Pay app now and start saving!

Happy Id El Maulud to all of our Muslim friends!

Dafe.

Greetings!

In recent years, there has been a paradigm shift from mere financial inclusion to a more comprehensive approach known as economic inclusion. Financial inclusion has been a major focus of development organisations and governments for the past few decades. While financial inclusion focused on bringing the unbanked and underserved into the formal financial system, economic inclusion aims to empower individuals with better access to credit, wealth creation opportunities, and economic viability. In this first installation of our expose on economic inclusion, we delve into its importance, exploring insights to highlight its viability and potential impact.

How it started. The goal of financial inclusion is to ensure that everyone has access to basic financial services, such as bank accounts, loans, and insurance. In Nigeria, the apex bank released a recent report that they’ve only been able to achieve 64.1% of financial inclusion as of 2023 and targeted 94% by 2024.

How it is going. In recent years, there has been a growing movement to move beyond financial inclusion to economic inclusion. Economic inclusion goes beyond just having access to financial services. It also means having the opportunity to use those services to create wealth and improve one's economic well-being.

According to IM Sweden;

Economic inclusion means that all consumers have access to safe, secure, and affordable financial products and services. Ownership of a transaction account is a first step toward economic inclusion. Transaction accounts at insured depository institutions offer consumers a safe place to keep deposits, conduct financial transactions, and build savings. - FDIC

Taking a shot from Emeka Ajene - owner of Afridigest;

99% of bank accounts in Nigeria contain less than ₦500,000 (~$625).

97% of bank accounts in Kenya contain less than Sh100,000 (~$700).

93% of bank accounts in Uganda contain less than Sh1,000,000 (~$275).

Financial inclusion & access are important, but they don't magically create wealth.

Zooming in. Financial Inclusion isn’t a failure. Financial inclusion has made significant strides, expanding the reach of banking services to millions of previously excluded individuals. However, merely having a bank account does not guarantee financial stability or prosperity. Economic inclusion seeks to address this gap by equipping people with the tools and resources they need to thrive economically.

There are a number of reasons why economic inclusion is important.

First, it can help to reduce poverty. When people have access to financial services, they are better able to save money, start businesses, improve their lives, and invest in their education and training. This can help them to lift themselves out of poverty and improve their standard of living.

Second, economic inclusion can help to boost economic growth. When people have the opportunity to create wealth, they can spend more money and invest in businesses. This can lead to increased economic activity and job creation.

Economic inclusion should help boost the income and assets of more people - individuals and households, with a “big push” of coordinated interventions – usually a combination of cash or in-kind transfers, skills training or coaching, access to finance, and links to market support. - World Bank

Third, economic inclusion can help to reduce inequality. When everyone has the opportunity to participate in the economy, it helps to create a more level playing field. This can help to reduce social unrest and conflict.

Zooming Out. Economic Inclusion is a step forward. There are a number of things that can be done to promote economic inclusion. One important step is to make financial services more accessible to people who are currently excluded. This can be done by expanding the reach of banks and other financial institutions, and by developing new financial products and services that are tailored to the needs of marginalized groups.

Another important step is to provide people with the skills and knowledge they need to use financial services effectively. This can be done through education and training programs, and by providing access to mentors and other resources.

Finally, it is important to create an environment that is conducive to economic inclusion. This means providing access to markets, removing regulatory barriers, and promoting fair competition.

Economic inclusion is a complex challenge, but it is one that is worth pursuing. By making financial services more accessible and providing people with the skills and knowledge they need to use them effectively, we can help to reduce poverty, boost economic growth, and reduce inequality.

Here are some statistics and reports that support the viability of economic inclusion:

• A study by the World Bank found that financial inclusion can reduce poverty by up to 10%.

• A study by the McKinsey Global Institute found that economic inclusion could add $28 trillion to the global economy by 2025. [LINK]

• The United Nations Sustainable Development Goals (SDGs) include a goal on financial inclusion, which aims to ensure that everyone has access to affordable and accessible financial services by 2030.

  ---

Economic inclusion is a critical issue in our present reality. By making financial services more accessible and providing people with the skills and knowledge they need to use them effectively, we can help to reduce poverty, boost economic growth, and reduce inequality.

If you are interested in learning more about economic inclusion, there are a number of resources available online and in libraries. You can also contact your local development organization or a government agency to learn about what is being done in your community to promote economic inclusion.

*This series is made possible and powered by our friends - Moor Pay.

Moor Pay is advancing economic inclusion in Africa and other emerging markets. Join its Telegram community and waitlist.

www.sendwithmoor.com

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Healthcare: The Need for Quality Infrastructure

The quality of healthcare infrastructure in Africa is often inadequate, with limited access to healthcare facilities, equipment, and supplies. As a result, health outcomes are generally poorer than in other regions of the world. The COVID-19 pandemic has only highlighted these challenges, exposing weaknesses in healthcare systems and exacerbating existing inequalities.

To address these challenges, the African Development Bank (AfDB) has developed a strategy for quality health infrastructure in Africa from 2022 to 2030. The strategy aims to strengthen health systems and improve access to quality healthcare for all Africans. This includes investing in health infrastructure, expanding the healthcare workforce, and improving access to essential medicines and vaccines.

We must give hope to the poor and the vulnerable, by ensuring that every African, regardless of their income level, gets access to quality health care, as well as health insurance and social protection. Dr. Akinwumi A. Adesina, President, African Development Bank Group, 2021

The AfDB's strategy is just one example of the efforts to improve healthcare in Africa. Across the continent, numerous initiatives are aimed at improving access to healthcare services and strengthening healthcare systems. These efforts are critical to improving health outcomes and promoting shared prosperity across the continent.

Financial Inclusion: Unlocking the Potential of Africa's Economies

Low levels of financial inclusion remain a significant challenge in Africa, with many individuals and businesses excluded from the formal financial system. Limiting economic growth, hindering poverty reduction, and exacerbating inequality.

The rise of fintech in the continent has enabled new solutions to be developed that are helping to promote financial inclusion across the continent. Mobile money platforms, for example, have made it easier for individuals to access financial services, even in remote areas. In addition, partnerships between traditional financial institutions and fintech startups are driving innovation and expanding access to financial services.

Quick Stats.

According to the World Bank Findex survey, only about one-third of the adult population has ever made a digital payment, notwithstanding the full array of available electronic tools. Nigeria is also underperforming in mobile money ownership compared to more dynamic peer countries. The transaction intensity of mobile money accounts is also much lower than in early adopter countries (e.g., Kenya) or late proponents (e.g., Senegal)

IMF

Efforts to promote financial inclusion are essential for unlocking the potential of Africa's economies. By enabling more individuals and businesses to access financial services, we can support economic growth and promote shared prosperity across the continent.

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Insurance for Shared Prosperity: Protecting Africa's Communities

Finally, insurance coverage remains low in Africa, with many individuals and businesses lacking access to essential insurance products. This limits their ability to protect themselves against risk, whether from health emergencies, natural disasters, or other challenges.

However, the emergence of innovative insurance products, such as microinsurance, is helping to expand access to essential coverage. These products are often tailored to the specific needs of individuals and communities, providing affordable coverage that can help protect against a range of risks.

Expanding access to insurance is critical for promoting shared prosperity in Africa. By enabling individuals and businesses to protect themselves against risk, we can support economic growth, reduce poverty, and encourage more resilient communities.

The curious case of African Lawmakers

Inadequate healthcare, low levels of financial inclusion, and a lack of insurance coverage remain significant challenges in Africa. Across the continent, innovative solutions are being developed that are helping to address these critical issues. From investing in health infrastructure to expanding access to financial services and insurance, there are numerous initiatives aimed at promoting shared prosperity in Africa. It is up to all of us to support these efforts and work towards a brighter future for the continent and its people.

Helpful resources

Nigeria—Fostering Financial Inclusion through Digital Financial Services

Current health expenditure (% of GDP) - Sub-Saharan Africa

Finance in Africa 2022: Navigating the financial landscape in turbulent times

Technology & Partnerships: A Driver for Insurance Inclusion in Africa

Capturing Africa’s insurance potential for shared prosperity

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Globally, nearly $1 trillion is sent between borders as a remittance—sending a paycheck home to friends or family. 

Remittances to Africa have been steadily growing in recent years, and this trend is expected to continue in 2023. According to the World Bank, in 2022, remittances to Africa reached $64 billion, an increase of 4.3% from the previous year. This growth is driven by various factors; including the increasing use of digital platforms for money transfers and the continued economic development in African countries.

Remittances—money sent by migrants to families back home—provide a financial lifeline to millions of households. (Brookings)

In 2022, remittances to low- and middle-income countries (LMICs) withstood global headwinds 2022, growing an estimated 5% to $626 billion; according to a World Bank report.

Remittances to Sub-Saharan Africa are estimated to have increased by 5.2% compared with 16.4% last year. - World Bank Migration and Development Brief.

Some Remittance Trends for 2023

One of the biggest trends in African remittances is the increasing use of digital platforms for money transfers. Many African countries have a large population living abroad, and these individuals often rely on digital platforms to send money back to their home countries. This trend was accelerated by the COVID-19 pandemic, which led to a greater reliance on digital services for financial transactions.

Another trend in African remittances is the growing number of countries in the region that are implementing regulations to promote formal remittance channels. Regulations to reduce the use of informal channels. Informal channels could be more expensive and less secure. This has led to more competition among formal providers, driving down costs - fees and charges, for consumers.

The Brief reports the cost of sending $200 across international borders to LMICs, which remains high at 6% on average in the second quarter of 2022, according to the Remittances Prices Worldwide Database. This is well above the target of 3% of the Sustainable Development Goal.

In addition to these trends, we expect new developments in the African remittance market in 2023. One of these is the growing use of blockchain technology for money transfers. Utilizing blockchain technology has the potential to make remittances faster, cheaper, and more secure, and it is expected to be increasingly adopted in the African market.

Another development to look out for in 2023 is the increasing use of mobile money for remittances. Mobile money is a service that allows individuals to transfer money using their mobile phones, and it is becoming increasingly popular in Africa. This is expected to make remittances more accessible for people who do not have access to traditional banking services.

It is cheapest to send via mobile operators (3.5%), but digital channels account for less than 1% of the total transaction volume (World Bank). This could be due to the burden of compliance with Anti-Money Laundering/Combating the Financing of Terrorism regulations, which continue to restrict access of new service providers to correspondent banks. These regulations also affect migrants’ access to digital remittance services.

Overall, the future of remittances in Africa looks bright, with steady growth in the number of transactions and the amount of money being transferred. The increasing use of digital platforms and the adoption of new technologies are expected to make remittances faster, cheaper, and more secure for consumers.

Quick Stats.

Remittances to Sub-Saharan Africa are estimated to have increased by 5.2% compared with 16.4% last year.

World Bank

Comparing Regional Remittance Trends. (Source: World Bank)

P.S.: Sending money to Sub-Saharan Africa is still the most expensive.

• Remittances to the East Asia and Pacific region are estimated to have increased by 0.7% to $134 billion in 2022. In 2023, remittances are projected to decline by 1% due to weaker conditions in migrants’ destination countries. The cost of sending $200 to the region rose to 6.2% on average in the second quarter of 2022 from 5.8% a year earlier.

• Remittance flows to Europe and Central Asia are estimated to have increased by 10.3% to $72 billion in 2022. In 2023, remittance receipts are projected to moderate further to 4.2% growth due to a softer outlook for major remittance-sending countries. The cost of sending $200 to the region rose slightly to 6.4% on average in the second quarter of 2022 (data excludes corridors originating in Russia).

• Remittances to Latin America and the Caribbean are estimated to have grown 9.3% in 2022 to $142 billion. In 2023, remittances will likely moderate to 4.7% growth due to a weaker economic outlook for the United States, Italy, and Spain. Sending $200 to the region cost 6% on average in the second quarter of 2021, up from 5.6% a year ago.

• Remittances to the developing countries of the Middle East and North Africa are estimated to have grown 2.5% in 2022 to $63 billion, compared to a 10.5% growth last year. Remittance inflows are projected to grow by 2% in 2023. Sending $200 to the region cost 6.3% on average in the second quarter of 2022.

• Remittances to South Asia grew an estimated 3.5% to $163 billion in 2022. Sending $200 to the region cost 4.1% on average in the second quarter of 2022, down from 4.3% a year ago.

• Remittances to Sub-Saharan Africa, the region most highly exposed to the effects of the global crisis, grew an estimated 5.2% to $53 billion in 2022, compared with 16.4% last year (due mainly to strong flows to Nigeria and Kenya). Sending $200 to the region cost 7.8% on average in the second quarter of 2022, down from 8.7% a year ago. Remitting from countries in the least expensive corridors is on average 3.4% compared to 25.2% for the costliest corridors.

To win the remittance game, we can explore the following:

There are several steps that Africa can take to win the remittance game and improve the flow of money into the continent:

1. Increase financial inclusion: Increasing access to financial services, such as banking and mobile money, can make it easier for people to send and receive money, thereby increasing the flow of remittances.

2. Promote formal remittance channels: Implementing regulations and policies that promote the use of formal remittance channels can help to reduce the use of informal channels, which can be more expensive and less secure.

3. Adopt new technologies: Adopting new technologies such as blockchain and digital wallets can make remittances faster, cheaper, and more secure, and can also increase competition among providers, which will drive down consumer costs.

4. Encourage partnerships and collaborations: Encouraging partnerships and collaborations between governments, private sector companies, and international organizations can help to create new remittance corridors and increase the flow of money into Africa.

5. Improve the regulatory framework: Reviewing and revising the regulatory framework to make it more favourable for remittance companies, will help to attract more companies to the market and increase competition, which will lead to lower costs and better service.

6. Develop a robust digital infrastructure: Investing in digital infrastructure, including high-speed internet and mobile networks, can help to increase the adoption of digital platforms for remittances and improve the overall efficiency of the remittance process.

7. Increase transparency and security: Increasing transparency and security in the remittance industry can help build consumer trust and reduce the risk of fraud and money laundering.

8. Increase education and awareness: Increasing education and understanding about the benefits of formal remittance channels and the risks of informal channels can help to change consumer behaviour and increase the use of formal channels.

Overall, a combination of all or some of these steps can help Africa to improve the flow of remittances into the continent, and ultimately help to improve the economic well-being of the people living there.

Some of the top remittance startups and companies in Africa. And how they compare.

1. Chipper Cash (chippercash.com): Founded in 2018, Chipper Cash is a mobile-based cross-border money transfer platform that operates in several African countries including Ghana, Kenya, Nigeria, South Africa, Tanzania, and Uganda. In 2021, it earned the unicorn badge with an investment of $150 million led by FTX which led to a US$2 billion valuation. Recently, Chipper Cash announced its expansion to Europe, starting with the UK and Spain. In 2022, the company acquired Zoona group; "Zoona was founded in 2008 and went on to develop the Tilt service, enabling payments and transfers to any bank or mobile money provider in Zambia."

2. WorldRemit (worldremit.com): Founded in 2010, WorldRemit is a digital remittance company that offers money transfer services to over 150 countries. The company is headquartered in London and has offices in several countries including South Africa, Kenya, and Nigeria. In 2019, WorldRemit raised $175 million in a funding round led by Technology Crossover Ventures, valuing the company at $500 million. In 2020, WorldRemit announced a partnership with MTN Group, a major mobile network operator in Africa, to expand its services across the continent.

3. Sendwave (sendwave.com): Founded in 2015, Sendwave is a mobile-based money transfer platform that allows users to send money to Africa and other emerging markets. The company has operations in several African countries including Ghana, Kenya, and Tanzania. In 2019, Sendwave raised $13.8 million in a Series A funding round which valued the company at $50 million.

4. BitPesa (BitPesa.co): Founded in 2013, BitPesa provides wholesale cryptocurrency liquidity for individuals and institutions across Africa. BitPesa is a digital foreign exchange and payment platform that allows users to send money to and from Africa. The company has operations in several countries including Kenya, Ghana, Tanzania, and Senegal. In 2018, BitPesa raised $5.8 million in a funding round led by Greycroft Partners and BitFury Capital.

5. Cellulant (cellulant.io): Founded in 2004, Cellulant is a mobile payment and digital commerce company that operates in several African countries including Ghana, Kenya, Nigeria, Tanzania, and Zambia. In 2019, Cellulant raised $47.5 million in a funding round led by TPG Growth and Rise Capital.

Apart from these companies, we have Grey, Eversend, Zazuu and many other newer ones. 

All these companies are making their way to be leaders in the African remittance market, they have a similar business model of providing digital platforms for remittances, they also have different features and they are expanding to various countries in Africa. They all have other valuations, funding rounds, and partnerships.

P.S.: It's worth noting that the data might not be accurate since the valuations and funding rounds are based on the last reports and might have changed at the time you are reading this article.

If you have any questions or comments, please don't hesitate to reach out.

Source:

• World Bank, Migration and Remittances data: https://data.worldbank.org/topic/migration-and-remittances

• Migration and Development Brief 37: https://www.knomad.org/publication/migration-and-development-brief-37

• Aite Group, The Future of Remittances in Africa: https://www.aitegroup.com/report/future-remittances-africa

• GSMA, Mobile money: https://www.gsma.com/mobilefordevelopment/programme/mobile-money/

And welcome to our first 2023 edition - a look at the African logistics landscape, zooming in on last-mile delivery. Enjoy!

Africa's last-mile delivery market is expected to see significant growth in the coming year, as more companies look to tap into the continent's booming e-commerce market. According to a report by ResearchAndMarkets, the African last-mile delivery market is projected to grow at a CAGR of over 10% during the forecast period of 2020 to 2025. A separate report by Strait Research suggests that "the Africa last-mile delivery market was valued at USD$1.4 billion in 2021 and expected to generate USD$2.3 billion by 2030 at a CAGR of 8.45%".

One major trend driving this growth is the increasing adoption of technology in the delivery process. From the use of drones and autonomous vehicles to the implementation of real-time tracking and delivery management systems, technology is helping to streamline and improve the last-mile delivery process.

Last-mile delivery is the system that makes the delivery of products to the end-user more streamlined, expedient and trouble-free

In addition, there is an increasing demand for same-day and express delivery services, as more consumers look to receive their online purchases as quickly as possible. In response, many delivery companies are investing in new technologies and infrastructure to meet this demand. Another trend is the growing popularity of cash on delivery (COD) as a payment method, which is particularly prevalent in Africa. This is because many consumers in the continent still do not have access to or trust other forms of online payments. Nor do they have full confidence that the product they ordered online will be the same when delivered or will work as advertised. Neither do they have full confidence that there will be a refund without a fight if the products are returned as promised in their policy.

Furthermore, with the advent of mobile technologies and the increasing availability of smartphones, more and more consumers in Africa are turning to online shopping, and this is driving demand for last-mile delivery services. According to a report by the GSMA, the number of mobile internet users in Africa is expected to reach 635 million by 2025. Still, on the African internet economy, a report produced by IFC and Google believes that; "By 2025, the Internet economy has the potential to contribute $180 billion to Africa’s economy growing to $712 billion by 2050"

Important Numbers. $154 billion in economic value will be generated by mobile technologies and services by 2025

The Last Mile Players.

Africa's last-mile delivery market is currently dominated by a few big players such as DHL, FedEx, and UPS, which have a strong presence in the continent. However, there are also many middle and small players operating in the market, such as Sendit, Kasha, Kwik Delivery and Twiga Foods. 

In recent years, Africa has seen a rise in startups disrupting the last-mile delivery sector with innovative solutions. For example, companies like Sendy and Kobo360 use mobile technology to connect cargo owners with transport providers, while others like Glovo and Jumia Food focus on food and grocery delivery. These startups are leveraging technology and local knowledge to provide more efficient and cost-effective delivery services to consumers.

Quick Stats.

AfCFTA has the potential to unite a market of 1.3 billion people and a combined GDP of $2.6 trillion.

Google and IFC report

The African Government has a Role to Play.

The role of government policies in the growth of the last-mile delivery sector in Africa has been mixed. On one hand, some governments have implemented policies that have limited the growth of the sector, such as high taxes and tariffs on imported goods, and a lack of infrastructure. On the other hand, some governments have recognized the potential of the sector and have implemented policies to support its growth, such as providing funding for infrastructure development and encouraging private-public partnerships.

Existing Limitations.

One example of a government policy that has limited the growth of the sector is the lack of proper road infrastructure in some countries, which makes it difficult and expensive to transport goods. In contrast, in countries like Kenya, the government has implemented policies such as Vision 2030, which aims to improve transport infrastructure and increase connectivity, which in turn is expected to drive the growth of the last-mile delivery sector.

For African governments to participate in the growth of the sector, they can create an enabling environment that encourages the growth of the sector through partnerships with private companies, foreign investors, and other stakeholders. These partnerships can focus on infrastructure development, technology adoption, and capacity building.

There's Finance Problem, also.

Access to finance is also a key factor in the growth of the last-mile delivery sector in Africa. Many small and medium-sized delivery companies in Africa struggle to access the finance they need to expand their operations and invest in technology. To overcome this challenge, governments and other stakeholders can support the development of financial products and services tailored to the needs of the last-mile delivery sector, such as microloans and crowdfunding platforms.

Interestingly, as proclaimed by an article by the A16Z team, every company will become a fintech company is becoming reality, even in logistics. For instance, Kobo360 - a tech-enabled digital logistics platform that aggregates end-to-end haulage operations., has a vendor financing VAS - Payfasta, enabling instant vendor payment at no extra cost. There's also Jetstream, which just raised $13 million - JetFinancing. There are many other logistics vendor financing companies if you do a Google search.

A Look at Last-Mile Delivery in Lagos, Nigeria.

There's an existing difficult business environment across the Sub-Saharan Africa region with unfavourable policies which especially affect smaller logistics businesses. This inadvertently has a significant negative impact on the flow of investment (low FDI too) as investors have doubts despite the massive potential opportunities. many logistic operators complained about insensitive policies being enforced for dispatch riders in Nigeria. For instance, in Lagos, licensing fees to range between $645 for SMEs like restaurants up to $51,000 for international courier companies, which are being enforced by a specialized arm of the Nigerian Postal Service (NIPOST) which is also a player in the industry. 

There is also the issue of harassment by local government workers, enforcing payment from the riders by selling them tickets at almost every major bus stop they pass through. 

This paper has amazing insights.

In conclusion. Africa's last-mile delivery market is expected to see significant growth in the coming year, driven by the adoption of technology, increasing demand for same-day and express delivery services, the popularity of cash-on-delivery (COD), and the increasing availability of smartphones. The big players in the sector are DHL, FedEx, and UPS, while there are also many middle and small players. Startups are also disrupting the sector with innovative solutions. Government policies have both positive and negative impacts on the growth of the sector, and African governments can participate in a way of partnerships to drive its growth in 2023. Access to finance is also a key factor in the growth of the last-mile delivery sector in Africa.

Share

More interesting reads:

• ResearchAndMarkets: Africa Last Mile Delivery Market - Growth, Trends, and Forecast (2020-2025) (https://www.researchandmarkets.com/reports/4424063/africa-last-mile-delivery-market-growth-trends)

• GSMA: The Mobile Economy Sub-Saharan Africa 2020 (https://www.gsma.com/mobileeconomy/sub-saharan-africa/)

• IFC: Navigating Africa’s New Logistics Landscape (https://www.ifc.org/wps/wcm/connect/news_ext_content/ifc_external_corporate_site/news+and+events/news/cm-stories/africa-logistics-landscape)

• MDPI: Logistics Challenges in Sub-Saharan Africa and Opportunities for Digitalization (https://www.mdpi.com/2071-1050/14/4/2399)

About The Edition.

The Edition is a deep dive into any helpful topic, trend or story making rounds in the tech space. We try to bring clarity to you every Saturday, at 8am. Sometimes, it’s quick bites of helpful advice.

Cheers!

This Edition by Sam.

LinkedIn

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This week’s edition came in an hour late. Apologies!

As the year 2022 comes to a close, it's natural to feel a sense of uncertainty and anxiety about the future. But it's important to remember that every new year brings new opportunities and potential for growth and success. With the right mindset and a solid plan, you can make the most of the coming year and achieve your goals in the things that matter most to you.

Here are some tips for planning for a successful 2023 and winning in the things that matter most in your life:

1. Reflect on the past year - 2022: Take some time to look back on the past year and think about what worked well and what could have been better. What were your biggest achievements and challenges? What did you learn from your experiences, and how can you apply those lessons to the coming year?

2. Set clear and specific goals: One of the keys to success is having clear and specific goals. Instead of making vague or overly broad resolutions, focus on setting specific and measurable goals that align with your values and priorities. For example, instead of saying "I want to be healthier," try setting a goal like "I want to exercise at least three times a week and eat a balanced diet."

   ---

   Quick Stats.

   Based on the thousands of people who have taken the test “Do You Set SMART Goals or HARD Goals?” we know that people with a strong emotional connection to their goals are anywhere from 1.3 to 1.8 times more likely to successfully accomplish their goals than people with weak connections.

   Forbes

   ---

3. Create a plan of action: Once you have your goals in mind, it's time to create a plan of action to achieve them. Break your goals down into smaller, manageable steps and create a timeline for completing each step. This will help you stay on track and make progress towards your goals.

4. Be persistent and resilient: It's important to remember that achieving your goals won't always be easy. There will be setbacks and challenges along the way. But the key to success is to stay persistent and resilient in the face of those challenges. Don't give up when things get tough – keep pushing forward and learn from your mistakes.

5. Surround yourself with support: No one achieves their goals in isolation. It's important to surround yourself with people who will support you and help you stay motivated and accountable. This could be friends, family, or a professional coach or mentor. By building a supportive network, you'll have people to turn to for advice, encouragement, and accountability.

By following these steps, you can set yourself up for a successful 2023 and win in the things that matter most in your life. Remember that success is a journey, not a destination, so don't be afraid to take risks and try new things. With determination and hard work, you can achieve your goals and make the coming year your best yet.

To your success!

About The Edition.

The Edition is a deep dive into any helpful topic, trend or story making rounds in the tech space. We try to bring clarity to you every Saturday, at 8am. Sometimes, it’s quick bites of helpful advice.

Cheers!

This Edition by Sam.

LinkedIn

For Adverts, send us an email - at giantaffairs@gmail.com OR call - 08074727030 | See Africa Tech Memo Ad Rate

When it comes to managing your money during times of inflation, the question of whether to save or invest can be a difficult one. Inflation is an economic phenomenon that occurs when the overall price level of goods and services in an economy increases over time. This can lead to a decrease in the purchasing power of your money, as the goods and services you buy will become more expensive.

For many people, the instinctive response to inflation is to save their money in a low-risk savings account, which will protect them from inflation and the potential losses associated with investing. This can be a good strategy for risk-averse people or who have a short-term savings goal in mind, such as saving for a down payment on a home.

However, for those who are willing to take on a little more risk and have a longer-term savings goal in mind, investing during inflation can be a smart move. By investing in assets that have the potential to generate returns higher than the rate of inflation, you can grow your money over time and protect its purchasing power.

One option for those looking to hedge against inflation is to invest in stocks or stock-based mutual funds. You can start micro-investing with as little as $10/month on Bamboo, Rise, Chaka and some others.

These types of investments have the potential to generate returns that outpace inflation, particularly if the company is in a growth industry or has a history of strong performance.

Another option is to invest in real estate, which has the potential to generate income through rental payments and can also appreciate in value over time. This can provide a hedge against inflation, as the value of real estate tends to increase along with the overall price level of goods and services.

Finally, investors can also consider investing in inflation-protected securities, such as Treasury Inflation-Protected Securities (TIPS) or inflation-linked bonds. These types of investments are designed to provide a return that is linked to the rate of inflation, protecting your money from losing purchasing power.

Quick Stats.

The annual inflation rate in Kenya was at 9.5% in November of 2022, holding close to a near 5-1/2-year high of 9.6% in the previous month but below market estimates of 10.1%.

Trading Economics

Ultimately, the decision of whether to save or invest during inflation will depend on your individual goals, risk tolerance, and financial situation. It's important to carefully consider your options and consult with a financial advisor if you need guidance. By taking a proactive approach to managing your money during times of inflation, you can protect your wealth and ensure that your money maintains its purchasing power over time.

Message from our sponsor - Zaidi (zaidi.com.ng)

One way to protect yourself from emergencies is to explore insurance. Getting insurance for your health or business gives you peace of mind. For as little as N20,000 per year, you can access quality healthcare. This prevents you from paying out-of-pocket for expensive medical expenses. I’ll recommend our insurance partner - Zaidi.

Our team at Africa Tech Memo have been using them for over a year and their customer support has been sterling.

Follow their story - Zaidi, early days.

Here are some quick snippets on taking advantage of inflation:

• Invest in assets that have the potential to generate returns higher than the rate of inflation. By investing in assets that can generate returns that outpace inflation, you can protect your money from losing purchasing power. Options may include stocks or stock-based mutual funds, real estate, or inflation-protected securities such as Treasury Inflation-Protected Securities (TIPS) or inflation-linked bonds.

• Consider hedging against inflation with commodities. Commodities, such as gold and silver, can provide a hedge against inflation as their prices tend to rise along with the overall price level of goods and services. However, it's important to note that investing in commodities can be risky, so it's important to carefully research and consult with a financial advisor before making any decisions.

• Increase your income. Another way to take advantage of inflation is to increase your income. This may mean exploring new revenue streams or negotiating higher prices for your products or services. By increasing your income, you can keep pace with the rising costs of goods and services and maintain your purchasing power.

• Review your budget and cut expenses where possible. During times of inflation, it's important to closely manage your cash flow and make sure you're not overspending. Review your budget and look for areas where you can cut expenses, such as reducing your entertainment budget or cancelling subscription services you don't use. This can help you free up cash and better manage your money during times of inflation.

Disclaimer: This is not financial advice. Contact your bank or any financial expert before committing to any investment. Do your own research. 

About The Edition.

The Edition is a deep dive into any helpful topic, trend or story making rounds in the tech space. We try to bring clarity to you every Saturday, at 8am. Sometimes, it’s quick bites of helpful advice.

Cheers!

This Edition by Sam.

LinkedIn

For Adverts, send us an email - at giantaffairs@gmail.com OR call - 08074727030 | See Africa Tech Memo Ad Rate

That means the others are self-medicating and paying out-of-pocket (OOP) for healthcare. Quality healthcare is expensive, and this means that if there's an emergency, more people are not able to make payments because as long as inflation keeps rising, more people will be thrown into poverty; healthcare will keep getting costlier while more and more people will resort to self-medicating. Have you heard of alagbo? We'll talk about it another time.

In WHO data retrieved in January 2022, the out-of-pocket health expenditure for Nigeria was 70.52% high.

Keep your eyes on these numbers 👇🏽

14.6% of Nigerians are unable to access adult medical services

9.5% cannot access maternal health care services.

11.7% are unable to access child healthcare services

How to get more people insured and reduce out-of-pocket payment for households

Africa’s health sector could be worth $259 billion by 2030, representing a massive investment opportunity, approximately $66 billion annually, according to an article by WEF. 

By 2030, 14% of business opportunities in global health are expected to be in Africa. - UNECA

The problem with low health insurance adoption remains the same: low insurance education, low buying power and zero-to-minute trust. That’s the issue right there. 

To drive insurance inclusion and adoption, we must create an elaborate and inclusive educational plan and outreaches, working with the right agencies. 

This article will attempt to provide a workable financing solution to address the problem of low buying power, caused by low income, and aggravated by the recent inflation - "Nigeria rose to 21.09% as stated in a recent NBS report".   

Introducing Insurance Buy Now Pay Later

The buy-now-pay-later (aka BNPL) has been on a rampage until recently slowed down by the ongoing global meltdown. Nevertheless, it's still a viable concept that can apply to many areas of our lives where money is exchanged for value. 

Making a case for BNPL. Why now? And why is it a better choice when compared to regular consumer loans? Because "inflation is not likely going to catch up with you". 

For instance, whatever you're saving for to buy two months from today, won't be at the same price as when you started saving. Inflation will happen. And in the case of using loans, the interest rates are usually something you don't want to keep accumulating. 

With BNPL, usually, there is no interest attached unless you default. And you get to buy what you need or want when you feel like it. Only do it responsibly.

Read about using BNPL as a strategy to drive inclusion here.

Driving insurance inclusion with BNPL 

Flip it 👉 INPL = :Insure Now Pay Later" 😎

Bear in mind, this article focuses on health insurance and how to reduce out-of-pocket payments for households. 

Though, INPL can be applied to a whole lot of other parts of insurance. 

Embedded insurance products can be bundled with BNPL offers. For E.g. an exercise bike purchase might contain gadget insurance, shipping (GIT), warranty insurance, plus supplemental heart attack coverage.  

Insurance buy now pay later.

It's high time health insurers start considering the convenience of alternative payment methods like BNPL.

A handful of companies are starting to offer buy now, pay later programs for health care. 

Depending on the lender, the process can start as a payment option at the doctor’s office directly or as a service where you provide your bill for the procedure. 

How it works. The insurer (HMO, insurtech or lender) checks eligibility through pre-qualification to ascertain patient is likely not to default. Some lenders will also assess larger financial data beyond what the traditional lenders look at. For instance, they can use a combination of machine learning and artificial intelligence to check relevant users' data - "and that might include frequency and timliness of paying phone bills". 

The approved amount and terms vary depending on the BNPL provider or insurer. The amount can be structured to be repaid in 3, 6, 12 or 48 months. 

Let's paint a scenario. A patient, Usman, gets to the hospital and after seeing the doctor, he was recommended to take some tests. He got to the cashier for an invoice to get his tests done. Alas! the cost was above his budget. Usman does not have health insurance. He will pay out-of-pocket. He has options: take from his savings or borrow from someone. And if he's a businessman, take money out from his business - capital or profit.  

The above story is about a typical day for an uninsured person at the hospital. They access healthcare, quality or not, by paying out-of-pocket. And nobody saves for health emergencies, per se.

Insurance BNPL can fix this. Back to our guy - Usman. He has options - go back home, take money from his savings or business capital, borrows from family or friend or from loan apps. None of these options is nice. They affect his wealth. The other option is to opt to make payment with Insurance BNPL, which can be made right there on the go. And get his medical bill sorted right there. And without any significant effect on his wealth.

Africa’s healthcare system could end up keeping more Africans below the poverty line. - Brookings

What if Usman can get his tests done without zero or little down payment? And with zero interest rate and relationship embarrassment. That's the usefulness of Insurance BNPL. 

With most BNPL providers, there is zero interest rate but the patient must fulfil payment by the due date. If the patient defaults, then an interest fee starts compounding.

Why Now. According to the World Bank, there were 89 million poor persons in Nigeria in 2020. The number is projected to hit 95.1 million in 2022. The over-reliance on out-of-pocket payments could exacerbate the level of poverty in the country.

Referencing a 2010 report by the National Library of Medicine; "Only 0.8% of households are not living in poverty but would be pushed into poverty if OOP health spending were netted from total consumption expenditure. OOP health payments led to a 0.8% rise in poverty headcount ratio." (OOP = out-of-pocket)

As a patient. Should you consider BNPL to cover health care expenses?

If you default, an insurance BNPL can be expensive for covering medical bills. Let's do some breakdown:

Yes to BNPL for health care if:

• It is interest-free 

• You can afford the monthly payments

Don’t consider BNPL if:

• Your healthcare provider can offer a payment plan. Ensure you verify.

• You already have high debt. If you are already paying back other loans, be careful about taking on more debt. You don't want financial stress.

• You have health insurance.

Alternative ways to pay for health care bills

The whole idea of Insurance BNPL is to use it as a strategy to reduce out-of-pocket healthcare payments. This, by all means, is not the surest of ways. Let's explore other options.

Negotiate a payment plan. If your medical bill is higher than what you budgeted, ask your doctor if a payment plan is an option. It allows you to build and commit to a plan that splits the bill into affordable monthly instalments, often at no extra cost.

Ask your family or friend. This is a good option but as it relieves the pain of paying out-of-pocket, it is likely not a very comfortable time for those you are asking. And they might not be able to say NO because it's a health issue. Even if you're going to pay it back, it's still not quite convenient. In all, before you ask, you should weigh the potential effect this arrangement can have on the relationship.

Personal loan. As explained above, explore the personal loans option if you don't have a (heavy) running debt. You can borrow from your bank, loan apps or online lender and pay back in monthly instalments, depending on the agreement. Be mindful of the interest rates.

Get a health insurance plan. This is by far the option you should opt in for. This saves you from all the issues of paying out-of-pocket by taking money out of your savings, business capital or borrowing from BNPL or any lender. For as low as NGN1,700 ($4), you can access quality healthcare for yourself, your family or your business. Many insurance companies such as Cover Genius, Zaidi, and Paddy Cover, have enabled monthly plans you can subscribe to start enjoying quality healthcare without the weight of a heavy medical bill. 

Bottom line: If health Insurance inclusion in Africa is built for inclusion and easy adoption with an appropriate distribution strategy, then more people would have to pay out-of-pocket for medical bills, which further throws them deeper into poverty.

The high percentage of catastrophic health expenditure and poverty in Nigeria shows that health financing reform such as the NHIS which became fully operational in 2005 is not achieving its aim of reducing the financial burden of OOP health payment among households. - NCBI

Thank you for reading the Edition Newsletter! I’d love your feedback, ideas and tips: omamuzosamson@gmail.com 

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About Omamuzo Samson

Omamuzo Samson is a writer at The Africa Tech Memo writing about the tech and emerging economy. He also works as a Product Marketer at Curacel. Based in Lagos, he can be reached at omamuzosamson@gmail.com or on LinkedIn.

Email Omamuzo

Image by Seth Doyle on Unsplash

Zooming In. Consumers are more likely to start shopping early to avoid price hikes, as a result of inflation fears spurred by the weak naira, which has increased the cost of imported consumer goods. The dollar/Naira relationship is weird as hell this period.  

Zooming Out. The holiday season is here, and with it comes the need for businesses to increase sales and revenue by acquiring new customers or upselling existing customers. If you’re old enough, you’ll remember this child-play song - “Christmas is coming, mama buy shoe for me”.

Small businesses are no exception to this. With the evolution of digital marketing strategies and tools, businesses can now do more than ever before to increase their sales. Vis-a-vis, revenue.

"The persistently high inflation will continue to negatively impact consumer spending power over 2022." - Fitch

Even though holiday sales have been down in recent years, we're still seeing a trend toward more online shopping and online purchases than ever before. This means that businesses need to figure out how to increase revenues during this season—and fast!

"In 2020, the number of online buyers in Nigeria was at about 76.7 million. Nigeria's total population amounts to 206 million and the internet penetration is at about 46 percent." - Statista

In a recent article, Fitch - one of the big three credit rating and research agencies, previses real household spending to grow by 3.6% in 2022, a modest reduction from the estimated 3.7% growth in 2021. Total household spending in nominal terms will reach NGN150.9bn (USD362.7bn) in 2022, increasing from NGN128.5bn (USD314.9bn) in 2021.

Pay Attention. The eCommerce market in Nigeria is expected to increase over the next few years, as indicated by the Statista Digital Market Outlook. In one of its reports, the research company said; 

"It has been predicted that the CAGR for the next four years (2021-2025) will be 12%. Compared to the year-over-year growth of 30% between 2020 and 2021, this decrease in yearly growth suggests a moderately flooded market. However, an indicator of growth potential is the online penetration of 26% in Nigeria; in other words, 26% of the Nigerian population have bought at least one product online in 2021."

With the advancement of infrastructure, increased adoption and penetration of the internet, and a growing number of payment channels - card, USSD, transfers, PoS etc., it's clear that digital businesses can thrive this season, but must be strategic to do so. 

Be Deliberate and Strategic. The competition this year for customers to open up their wallets will be a tough one more than ever - spending power is low. Inflation does not look like it will be slowing down any time soon. It was at 20.52% in August 2022.

For any business to win, it must plan to have a clear and deliberate positioning strategy. Don't do the sprinkle and pray thing. It might not work this time because more people are waking up to the realities happening around the world and would rather save than spend. Thanks to Emefiele and his guys - CBN. 

But, you can still win. 

"In everything you, ensure you have acquired your prospects before sales start." - Africa Tech Memo

What You Can Do. Some strategies to acquire more customers, nurture existing ones and increase revenue through sales:

- If you have a website and it is one of your sales channels, improve your website’s SEO ranking by implementing SEO strategies that increase traffic to your site. Know anything about SEO? This SEO quick guide can help you get started.

- Most small businesses leave money on the table by not collecting essential data from their customers. Always collect emails and phone numbers for every sales, support or enquiry made. Create an email campaign that targets potential customers with relevant content about what you have to offer them. And upsell the existing ones. Use this email marketing guide to get started.

- Use social media ads on Facebook and Instagram to reach potential customers who are looking for what you have to offer them. If you are not yet familiar with running ads, use this Facebook guide and start right away. Don’t be ashamed to ask (or beg) your customers to follow you on these channels.

- You can also set up paid ads on Google AdWords because they have higher click-through rates than organic search engine results (SERPs). Depending on your type of business, try out LinkedIn.

Here are bonus activities you should also consider:

• Leverage PR. Generate as much awareness for your business as you can get. Do it yourself on Presofis for free.

• Collaborate with influencers. This can be tricky. Ensure you know what success looks like before engaging. Use tools like Plaqad Marketplace to engage with influencers. Define your Return On Investment (ROI), Call To Action (CTA) - “what do you want the people that interacted with the influencer to do?”.

• Do giveaways. If you're new, do it in collaboration with a thought leader to drive awareness. And maybe, some sales.

• Consider giving discounts. Do this by either a number of items purchased or first-time users. Never do it beyond a limit that hurts your business margin. 

• If you're still not sure where to start, reply to this email for a free 30 minutes call to get clarity on what to do.

Oh, My Business is New. What about if you're just starting out? How do you make sure that your business isn't left behind?

Here are some things we've found work well for getting more customers as a new business:

Make sure everything has a reward system attached to it. This one is especially helpful because it allows you to measure how successful your marketing efforts were—and can help make sure they're effective in the future too!

And do all of the tips mentioned above.

Ensure you do all of these in a cost-effective way. Don't burn through your cash only to run at a loss at the end of the season. 

Round Up. But here's the thing: it can be hard to keep up with all of this demand in a busy season. That's why we're offering a 30-minute free call to walk through your business to get clarity on what you need to do to acquire more customers and increase your revenue during this time of year.

There's a caution though, ensure everything you do is done in a margin-enhanced way while delivering value to your customers. - Africa Tech Memo

Till next week.

PS: Read “What is web3? The Creators Way”.

Cheers!

Samson

What else we’re reading

• How can you grow by copying your competitor's activities?

• 10 Questions You Can Answer to Help You Set The Right Foundation for Your Business and Drive Growth

• How To Grow Your Business During A Recession

• 💰Dollar is scarce

First, product strategy does not sit in a silo. It should align with your company’s business strategy, which is the duty of the stakeholders or executives to have put together.

Without a business strategy to act as a guide, you are liable to make the mistake of creating a product strategy based on the product vision you defined that falls outside the overall company’s strategy.

Typically, not cast in stone, your product strategy sits at the mission, vision, STRATEGY, goals, roadmap and task. Having a clear product strategy is what helps you move beyond satisfying your customers to delighting them. (Cc Gibson Biddle, former VP/CPO Netflix — on Product Strategy)

I like the way Hubspot put it; “Your product strategy is the roadmap that’s used to develop your product or feature.” It’s a high-level thing.

What is Product Market Fit? And you can find it in your product as a creator

To help us understand how to craft all the other elements before we get to strategy, we should attempt to answer these questions:

• What is the need? — problem to be solved

You do not want to build a solution and start looking for a problem to solve. That’s unnecessary hard work you don’t want for yourself.

You can frame it however you like so as to get to the problem faster. There are many frameworks you can employ for this purpose. For E.g. what job does your customer want to get done?

• What is the market? — target customers

Not knowing your target customer might lead you to create a product that is not well-defined. First, it shows you probably didn’t spend enough time in the problem stage. Your product cannot solve all of the universe's problems.

Your target customer is that person that is likely to buy your product.

And if you find out that the user and the person paying are different, then you should tailor your product to the need of the person paying.

• What is our business goal? Metrics to be measured by

How will you measure the progress and success of your product? As they say, what doesn’t get measured cannot be improved. You can start by setting up a north star metric by which your product success will be measured. Learn more about the North Star metric from this article by Gibson Biddle.

Product Growth Strategy: Driving product adoption with a ‘Highway’

You might have to dabble between lagging and leading metrics and know what you’re dealing with.

• What will be the features?

To be clear, you don’t want to be a feature factory. That being said, you don’t want to starve your customers of the necessary features that can help them get their jobs done efficiently.

Your features, first, should not be nice to have. It should be solving a definite need for your customers. It should enable your customer to move from frustration to delightfulness.

Talking to your customers to know what they want is good until they tell you they want a ‘faster horse’. Want to delight your customers? Know what feature is needed and deliver it before they realize that they need it.

• What is our differentiator? Positioning

Don’t leave this for later — when the product is done or the feature is shipped. I always like doing this before a single line of code is written by the engineers. It forces you to prioritize in a way that aligns with your product vision.

Product positioning presents the benefits of your product to a particular target audience. “Simply put, it is how your customers will remember you when it is time to get their jobs done. It’s a strategic exercise that defines where your product or service fits in the marketplace and why it is better than alternative solutions.” — Aha!

Going back to knowing who your target customer is — what they need, and how your product can help them to solve their problems. This is one reason you should engage your product marketer from the get-go and in all discussions.

• How do we achieve this in a margin-enhanced customer-satisfying way?

No matter how nice you are and how much you love your customer, you still want to remain in business. And to remain in business means that you’re generating revenue.

So, the question here is how you want to deliver the product to your customer so they will experience premium delight using your product and price it enough that will be beneficial to your company.

Also, if your pricing forces them to check out or try the alternatives (competitors), they won’t get the same experience.

This is my (unspoken) product strategy.

More from me ICYMI:

• Product Managers Bias and How To Avoid Them

• Product Managers and The Three Thieves

• The Lessons of Cain and Abel: product management lessons

PS: This article was first published on Medium.

About The Africa Tech Memo (Moor)

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Wikipedia describes a syndicate as; 

"a self-organizing group of individuals, companies, corporations or entities formed to transact some specific business, to pursue or promote a shared interest."

Simply put, they're combined to promote a common interest. In this case, pull funds together and invest in a startup or company with a great chance of succeeding.

A 2019 research paper by the AngelList data science - Abe Othman, shows that VC returns are strongly correlated to the number of startup investments an angel makes. The more investments he can make, the better his chances of early-stage returns.

That paper was written with web2 in mind. 

The rise of Web3 has given birth to a new set of angel investors who are backing founders in the space with not only capital but also mentorship and community building.

More than capital, Web3 startup founders are looking for value addition, expertise and mentoring from investors. Also, there's a shift in fundraising, startups are tilting more towards issuing token assets instead of equity stakes.

Angel investing is one of the most important aspects of the Web3 community-building process. Angel investing is a fun, challenging and rewarding experience. Cues from U.S. and other international markets have led to several thriving angel investor networks for Web3 entrepreneurs – most notably Boost VC (which incubates companies) and Web3 Labs (which invests in startups). With its list of companies like Coinbase, Aragon, and Etherscan among many.  

What Web3 Angel Investors Do.

Web3 Angels invest in very early-stage blockchain companies. They expect and provide significant guidance to the companies they invest in (not just capital)— but they want that guidance to be exclusive to Web3 Angels because of the high risk associated with this investment type.

A bit of insight into the angel investment landscape.

It's been interesting to watch the capital markets change as access has become easier and the barriers of entry have come down. This has had a big impact on “growth companies” that are just startups trying to solve real-world problems.

When investors invest alongside other experienced investors, it is more valuable than investing as a lone investor. This is particularly true in web3 where the community takes centre stage. The teams who are building for the web3 stack are more likely to succeed if they have great investors by their side. As such, this allows the investments to be effective as possible, both financially and from an ecosystem perspective.

How to join an AngelList syndicate to source investment opportunities.

Let's look at how AngelList Syndicates work.

"Focus on your deals, not managing multiple service providers. AngelList handles legal formation, capital calls, tax documents, and everything else you need." - AngelList

According to information available on the AngelList Venture website; "A syndicate allows investors to participate in a lead investor's deals. In exchange, investors pay the lead carry."

Investing in web3 means these capitals are focused on Crypto and Web3 opportunities (including Crypto, Defi, NFTs, Protocols, DAOs, Exchanges, Tokens, Metaverse, Digital Assets, Decentralized Applications, Play to Earn Gaming, Infrastructure, Tooling) especially companies that are driven by top talent, large markets, significant growth trajectories and disruptive opportunities.

To be an AngelList Web3 Syndicate; follow these steps:

• Create your syndicate profile

• Submit a deal

• Invite LPs

• Deploy capital

Why you should join a web3 syndicate.

• Gain Access to High-Quality Deals

Following reports, the quality of the deals on AngelList stands out.

One of the reasons is the number of experienced GPs on the platform who offer deals they’ve done diligence on, he said.

• Close Deals Fast

AngelList makes it easy to deploy capital quickly. AngelList makes that happen and takes the headache out of the entire process. We can quickly pool and deploy capital.

• Honing His Investment Judgement

AngelList co-founder - Naval Ravikant, talks about how a good deal is difficult to define — you know it when you see it.

What are the top 5 criteria you would use to diligence a Web3 angel investment?

- The technical expertise of the team (understanding of the problem space and ability to deliver)

- The size of the problem they are solving. What is the size of the market? How urgent the problem is? And how much value the solution will add?

- The quality of the product or demo/prototype. Is it clear what they are building, how it will work, whether it can be feasibly built and what kind of traction they have already?

- The quality of business plan and financials. Are they being realistic about how much money they will need and what milestones they need to hit to go from zero to profitable?

- What is the competitive landscape? How many other players are in this space and how quickly does the market need to be scaled up before it becomes saturated?

The top 3 questions you should ask for each of those 5 criteria?

- For technical expertise: who is on the team? Any prior experience with starting successful businesses? How does their protocol design fit into their business model and token model? How does the token model incentivize their community to grow and increase adoption of their platform/protocol/application?

- Size of the problem. What would the Product/Market Fit look like? Is this product needed? What pain point does it address? What are the existing alternatives and how prominent are they in the market? Is there a clear path to monetization? How will the company make money over time? Will it be through fees, transaction revenue, ads...etc.?

- The competitive landscape. The incumbent competition, market entry barriers and defensibility. Who else is in the space and how well established are they? How much traction do they have? What is their % of market share? Are there other barriers to entry into this space (e.g. regulatory)?

In2021, A16Z invested in a Syndicate DAO, a web3 startup building the protocols and tools that will enable DAOs to reach their full potential. 

If you're looking for a Web3 syndicate, start here 👇🏽:

• Web3 Capital

• MAV Web3

I'm much involved with Odyssey DAO as a project manager for its BootCamp, onboarding one million people into web3 and also work with the product team.

Image: Unsplash

Moor is on a mission to help one hundred thousand creators onboard in web3 and build a successful business. And we'll be thrilled if you're interested in joining us!

We believe that the future of creativity relies on a decentralized internet that unlocks the potential of millions of storytellers, artists, writers, and creators worldwide.

We know how hard it can be to figure out where to start when new to the web3 space. That's why we've created this newsletter: we want to provide resources for learning and keep you informed about all of the latest news related to the industry.

What you'll learn:

• Marketing in web3

• Growing your business in web3

• Navigating web3 as a creator

• Tools that will help you structure your business

• How to get paid

• Distribution

• Monetization: How to make money

We are here for the business, not just the buzzwords! Not the web3 jargons. 

If you have any questions or concerns about your subscription, please reach out at omamuzosamson@gmail.com. I would be happy to help!

Africa Tech Memo

Is Web3, NFTs and DAOs the future of the media and music industry?

Web3 is decentralized internet. A way of exchanging value in the same way we use the internet to exchange information (web 1 and web2). The value exchanged can be achieved through micro-payments - Defi, NFTs and DAOs like Moloch - a grant-giving DAO. These are all early experiments with what could turn out to be the future of the music industry…

Read more

4 years ago · 1 like · Samson Omamuzo

Web3 is decentralized internet. A way of exchanging value in the same way we use the internet to exchange information (web 1 and web2). The value exchanged can be achieved through micro-payments - Defi, NFTs and DAOs like Moloch - a grant-giving DAO. These are all early experiments with what could turn out to be the future of the music industry.

Let's look at how Web3, NFTs and DAOs will shape the future of media and music industries by first defining what they are then looking at some examples across these areas of how they're being used then finally look at what could happen next.

Zooming out: The current state of media and music industries are very much centralized where only a few large companies control almost everything from distribution to metadata but Web3, NFTs and DAOs will help artists get a more equitable share while also allowing them to have more control over their work by allowing them to create their own contracts that can be self-executed in an automated fashion thus creating new ways for artists to get paid for their work which means it'll be easier for independent creators who don't have any company backing them up as well as big labels who want to expand their reach even further than before. We just need time until all these technologies become mainstream enough that everyone understands why they're important now!

Web3, NFTs and DAOs are the future of media distribution

Web3 is a decentralized web that could include DAOs, non-fungible tokens (NFTs) and decentralized markets. 

NFTs are unique digital assets that can be bought, sold, traded and used to pay for value or gain access. They have their own unique properties and characteristics which can be verified by the blockchain.

DAOs are decentralized autonomous organizations where no single person controls how it makes decisions on behalf of everyone else involved in its operations. There’s no power imbalance between stakeholders or any loss of control over how decisions about the organization are made.

The potential benefits of Web3 technology include:

• It provides protection from censorship as everything is stored on the blockchain instead of on centralized servers

• It reduces costs as you don’t need expensive equipment to store data anymore. They are distributed across all nodes on a network rather than just one server somewhere. Scale is easy without having any downtime due to hardware failure issues when using cloud storage services like AWS.

Accessing funding from grants as a media/music artist

• Find out what criteria must be met before funding can be approved such as maximum/minimum amounts spent per project (less than £5 million)! Getting funding for your projects is a lot easier than you might think. There are many grants out there, and although they might not seem like much at first, they can be the difference between success and failure.

• There are other options - DAOs and NFTs! Explore them first. Emerging technologies have made it easy to set up DAOs and create and sell NFTs. (Watch put for specific articles on each of these)

Using DAOs to fund music projects

• The future of the music industry is in DAOs.

• A DAO is an organization which has no central control but instead operates on a predetermined set of rules that are public and open to everyone.

• When a project wants to raise money for its development, a group of people can decide if they want to follow these rules or not. If they do, then they have formed a DAO. And most importantly, they invested their money in it. If it turns out that these rules were broken during the project's lifetime (or if someone wants his/her money back), then all investors can vote for refunding all funds invested from day one up until now - even though this would make them lose their entire investment at once! This sounds crazy but makes sense when you think about it: It means that nobody gets any profits without working hard first.

How NFTs could change the media and music industry

NFTs are non-fungible tokens, which represent a unique asset. They are a digital representation of an item or property that can be exchanged and stored using blockchain technology. NFTs allow you to own items unique in nature, such as artworks or collectables, without the need for ownership paperwork (such as title deeds).

They contain information such as:

• The item's name;

• An image depicting the physical appearance of your NFT;

• Its description and features;

• Ownership details including who owns it and when they purchased it;

What about streaming royalties? Web2 has failed so far here

Streaming royalties are payments made by streaming services like Spotify, Apple Music and Amazon Music to artists and producers. The royalties are paid out based on the number of streams a song gets. Artists get paid per stream, whereas producers get paid based on the number of plays their tracks get.

The Web3 era will change how this works. With NFTs (non-fungible tokens) you can easily track ownership and royalties across all platforms. For instance, if you own an NFT for your music then no matter where it’s played or streamed, it belongs to you — which means that as more people begin using blockchain technology to buy music directly from creators via smart contracts ($$$), there could be even more money flowing into artists’ pockets than before!

Web3 - NFTs, DAOs and IPFS, will be capable to track these streaming events, making it possible for artists to get a fair share of their music's value in an automated way!

How artists can make money on top of their music distribution grants?

Here are some ideas to think about:

• Offer fans who buy the album a discount on merchandise.

• Give your fans access to behind-the-scenes content, or give them a sneak peek at what you’re working on next.

• Give your most loyal fans exclusive access to tickets before they go public.

• Ask for investments from your biggest fans and reward them with profit-sharing if the project is successful.

Zooming in: the good part. These tools will let musicians and actors collaborate with their fans to create and distribute content and earn a living.

With the right tools, fans can become involved in the creation and distribution of content, as well as funding.

With these new tools, you can imagine a musician who is producing his own music and creating it live on stage. He wants to distribute his work through multiple channels but doesn't want to pay the 50% commission that platforms like Spotify and Apple Music charge. 

So he creates an NFT token that represents ownership of his work. He sells those tokens on OpenSea or another marketplace where people can buy them with Eth or BTC or any other cryptocurrency. 

Once he has enough money from selling these tokens on OpenSea or another marketplace, he uses those funds as seed money for building out a website where people can listen/view/play along with him while he performs live during concerts around the world!

It's a win-win for all.

Blockchain technology will allow many more people to participate directly in the production and distribution of media and music. It will also allow them to earn a living doing so, as they can be paid directly by their fans for their work. This could change the way artists, filmmakers, publishers and everyone in the chain make money forever - making a much larger group of people happy than just those at the top who get most of the money now.

Welcome to the future. Is it?

This raises the question: Is Web3, NFTs and DAOs the future of the media and music industry? Our answer is yes. The advent of blockchain technology has created a new world with new opportunities for artists, musicians, creators and fans alike. It is a world where power is decentralized and value can be created by anyone. We believe that this new ecosystem will enable talent to flourish without any gatekeepers or intermediaries, which in turn could create an environment that is more conducive to creativity.

We believe that by creating a digital economy around the media industry, we can radically reshape how content creators are paid and how they interact with their fans. This is largely thanks to Web3 technologies like NFTs, DAOs and IPFS - all of which enable frictionless payments and collaboration between artists who want to produce better music together without the worry about getting paid fairly or finding someone who will listen. 

We’re excited about what’s coming next!

Before you dive in...

+ Influencer Marketing is a >$10bn business as of 2020. 

+ “Between 2019 and 2021, [influencer marketing grew] from 6.5 billion to 13.8 billion U.S. dollars in the three years alone.” – Statista, 2021

+ Consumers sometimes see influencers as key opinion leaders (KOL).

This is influencer marketing.

Influencer marketing is not generally a new concept or idea despite being in its nascent phase in Africa. With bits of search, you would come up with Payperpost - one of the earliest influencer marketing companies. This was before influencer marketing became a thing-thing. 

Now, that's out of the way. Let's go.

Some call it branded content or working with 'creators'. It is safe to say creators = influencers. Period.

This is Influencer marketing— a dependable way brands expand their reach on social media. I said dependable because that is what is expected unless it was done wrong.

When it comes to using influencers to power a brand, there’s no one-size-fits-all approach. With the right planning and research, just about every business – small and great, can benefit from using the strategy.

The emergence of the coronavirus pandemic accelerated the employment of influencer marketing in many ways, as consumers and brands sought unscripted, authentic content.

Some breakdown…

There are two words married here – 'influencer and marketing'. In a plain description, an influencer is someone who can influence others. Marketing is getting words about a business out to reach more people. Therefore, influencer marketing is when the influential person partners with a brand to promote something – usually to a defined goal. 

Celebrity endorsements can be said to be one of the widely known original forms of influencer marketing. It is different today. Social content creators with niche audiences have been seen to often offer more value to brands. Why? They have dedicated and engaged groups of followers. 

The market is rapidly expanding as influencer types have multiplied, with influencers filling every conceivable niche and sub-niche interest. Each of these types offers distinct benefits and trade-offs for brands.

The influencer marketing technique - if properly executed, is one of the effective marketing strategies that reach direct customers.

More sectors are embracing it to drive their brand value

The Financial Times predicts that the value of the global influencer market will reach $15 billion by 2022.

Influencer marketing hub reports that the influencer marketing industry is set to grow to approximately $13.8 Billion in 2021.

The finance sector is yet to fully employed the use of influencers to drive their businesses. The issue here could be the word - ‘endorsement’. Brands don't want to get into a legal fight because of misrepresentation by an influencer or misinterpretation by the consumers. Though, we are beginning to see stuff from them as they learn how to navigate the space e.g. VFD and Don Jazzy. 

Health is another sector not well represented. (We should talk about the legal part of these things in a future post.)

Everything is looking beautiful. As e-commerce and social media connect (social marketing! or social selling???), influencers will become increasingly vital in helping to connect brands with consumers in a more authentic way that can deliver better returns.

There are two primary ways of categorizing influencers: reach and niche

+ Reach: nano, micro, macro and mega influencers. As a general rule (remember: no one size fits all), targeted reach, cost-effective, engagement, authenticity and accessibility all go up as follower count goes down. 

Nano Influencers: 10,000 followers or fewer

Micro-Influencers: 10,000 to 100,000 followers

Macro Influencers: 100,000 to 1 million followers

Mega Influencers: 1 million+ follower

+ Niche: Brands can leverage relevant niche influencers to more intentionally target audiences. 

*Consider this the holy grail of influencer marketing: finding the sweet spot of convergence where an influencer with the right reach and niche can power a brands product or services.

What report says – using the PLAQAD 2020 Compensation report

Carry PLAQAD. According to the report, 40% of brands preferred to work with influencers versus regular celebrities. 100% of influencers want to be compensated for work done and delivered. More influencers are open to being compensated with products and services in place of cash payment with 18.6% - an increase from 13% in 2019, willing to accept the product and complimentary services from brands.

Let’s talk payment. Influencers want a stable and regular paycheck. Only 43% of brands/agencies pay immediately with 27% of macro-influencers said they get paid upfront. 41% of influencers want to get paid per post, 38% want to get paid per campaign while 11% simply wants a flat fee. Brands and agencies want – ‘per campaign’.

More numbers. 35.7% of influencers want to get paid before the start of a campaign, 46.3% wants their money immediately after a campaign ends while 15.8% can manage a 7-day extension to get their money after the campaign ends. But, brands and agencies prefer 45 to 60 days after the campaign to pay. This could be a result of broken analytics associated with running a campaign. Or just agencies usual payment circle thing associated with agencies. 

Measuring ROI. It is a known struggle to measure the ROI of an influencer campaign. It is even more difficult when a brand works with more than one influencer on the same campaign – how do you know which drives more engagement? The PLAQAD report stated that a whooping (in their own words…) “77.8% cannot tell in actual terms the impact of their influencer marketing spend on the overall business objectives”. 

The Consumers. The goal of driving a campaign is to grab market share. And that means consumers money or attention. This could be from sign-ups, purchases, awareness and others. Three people are in the loop – brand, influencer and influenced. 42% of surveyed consumers make decisions based on influencer recommendations. 40% of these consumers want influencers to disclose brand promotions/sponsorships.

Influencer Marketing Tools in Africa: from platform to front and back-office 

Following a global influencer marketing platform report by Markets and Markets; “the global influencer marketing platform market size to grow from USD 6.0 billion in 2020 to USD 24.1 billion by 2025, at a Compound Annual Growth Rate (CAGR) of 32.0% during the forecast period”.

Many reasons have contributed to the increase of startups offering other ways for creators to make money and for brands to effectively calculate campaign ROI. Companies like PLAQAD makes it easy for brands and agencies to effectively measure a campaign effort while exposing influencers to better deals. Other companies are taking care of the backend like payment, invoicing, taxation etc.

Let’s take a look at some of them… 

Humanz: AI-powered platform aimed at combating influencer fatigue while also measuring true ROI and creating a safe and seamless end-to-end experience for all parties involved.

Tribahl: partner with Africa’s top media, entertainment and lifestyle influencers to create entertaining content that meets our client’s marketing objectives.

PLAQAD: provides influencer marketing, paid media distribution, content creation and media intelligence – offering a faster, seamless and cost-effective way to do marketing.

Alfluence: uses Artificial Intelligence-driven to accurately match influencers with brands, monitors & manages high impact audience-based campaigns in real-time.

Buzzbite: a self-service influencer marketplace for Consumer Brands looking to reach audiences in the African Market.

Extra:

FYPM: (F*** You Pay Me = FYPM). The platform lets influencers anonymously spill the dirt’s about their brand deals, like how much they were paid and what was asked of them.

Is influencer marketing effective?

As per available reports, the influencer marketing industry has exceeded $10 billion in 2020 and nearly 40% of marketers don’t feel confident in their ability to report influencer marketing ROI.

Part of the issues has been working with the right influencer, work on the right KPI's and efficiently calculating ROI. Also, there is the challenge of the ability of influencer relationship managers to demonstrate that performance in dollars and cents. Talk about ROI.

What to track and report as a marketer

+ Influencer discovery

+ Influencer analysis 

+ Influencer management

+ Campaign workflow 

+ Campaign analytics

References:

https://thebestofafrica.org/content/is-influencer-marketing-effective

https://www.mediaupdate.co.za/marketing/146350/influencer-marketing-in-south-africa-the-stats-you-need-to-know

https://www.ft.com/content/834cc9ce-3ba2-11ea-b84f-a62c46f39bc2

https://influencermarketinghub.com/influencer-marketing-benchmark-report-2021/

The rising population.

We just heard insects are likely to go extinct because of climate change. The result could be “an uncertain future that is expected to have hungrier insect pests, with impacts on crop productivity and food security” – The Conversation. Thankfully or not, Africa will witness a continuous spike in its population growth. Nigeria takes the top 3 positions globally with the highest population, up from the 7th position. It is on the UN report, which projects the world population to hit 9.8 billion in 2050.

But, what does this mean for us as Africans? Driving it home, what does it mean for Nigeria? Economically, it means we will always have a growing class of people capable of working (working-age population), as against countries filled with more aged people nearing retiring against the number of people that can work. This should be our advantage. As the workforce shrinks in developed nations, that of emerging (growth) nations like Nigeria, is on the increase.

An increasing working-age population is crucial for economic growth in Africa. The World Bank estimates that this demographic dividend could generate 11-15% GDP growth between 2011 and 2030.

Two things are likely to affect developing nations from capturing this value: migration and technology. For instance, in Africa, there are inefficiencies in ensuring that the necessary things that drive productivity – roads, power, healthcare etc. to be in place. It causes more people to keep migrating to places like Canada, the USA and Germany. Also, the more automation and artificial intelligence get better at doing the tasks of unskilled workers, the narrative might change.

Zooming out. We’ve got the power. 

Nearly 10billion people are estimated to inhabit planet earth in the year 2050 (Report). In many developed countries where unemployment drops, it is because people are leaving the labour force. Not necessarily because new jobs are being created. A lot of these people are either nearing retirement or have retired. Years back, due to the demographic trends initially seen as Africa's recession, the increased population predicted to hit more than 2 billion in 2025 has turned out to be its advantage.

According to an article by WYA Africa; “These include economic benefits such as an expansion of tax bases and increased consumer spending at local businesses, as well as benefits derived from innovations by cultures seeking to keep up with growing populations.”

 The emergence of the global middle class. As the size of the working age increases in some countries and decreases in others, the size and the composition of import demand are changing with it, with additional effects on trade flows. For instance, trade in services, such as healthcare and education, is likely to increase (FT).

 We are likely to witness the rise of trade flows to Africa. We already notice this in the amount of investment coming into tech in Africa. Recently, Stripe and other foreign investors poured USD200 million into Wave – a US and Senegal based mobile money provider.

The workers in Africa will be relatively young, while populations in Asia — certainly in China and Japan, although less so in India — will become older.

Looking ahead. With great power comes greater responsibilities. 

Citing a 2016 article by weforum.org, ‘If sub-Saharan Africa is able to take advantage, and provide adequate education and jobs, $500bn a year to could be added to its economies for 30 years. This is the equivalent of one-third of Africa’s GDP’. This, in itself, should be our advantage. It’s rare to find an investor going global and not found Africa a preferred destination - they talk about our working-age numbers. The numbers available to work and the numbers available to buy.

Let's look at insurance as an instance. To increase the number of people insured in Africa (insurance inclusion) from the current rate, innovative products should be designed and produced. That’s where the power is, the opportunity for the 'middle to lower class' to participate economically. When we have more ways to engage more people economically, the rate of emigration will drop. The developed world is fighting to drive up fertility. The elderly now spend most of their savings on healthcare and having fewer working-age to keep producing. In Africa, we have many young people that are able to build products (working-age) that can be used by the elderly.

Let's talk about healthcare funding. Out of pocket health is on the increase year on year. How do we bridge this acute healthcare financing gap? More than 37% of healthcare funding is out of pocket. This means we have to design solutions that can mitigate the effect of ‘out of pocket healthcare’. 

One way again – fix the insurance industry. I have an idea - just an idea. Let's make healthcare providers happy. I assume that proper healthcare funding cannot happen until healthcare providers are happy enough to keep working with the insurance companies (HMO, if you may). The usual challenge between the healthcare provider is the time it takes an insurer to make payment.

One good thing is that – again from the working-age, are releasing innovative products to solve this. Talk about the Helium Credit and the Curacel’s Advance, which allows healthcare providers to access up to 70% of the amount of the claims submitted. The financing is a partnership between Curacel and its financial partners. Providing the working capital for healthcare providers to focus on what they do best – ‘provide better and quality healthcare to patients’. Curacel is particularly interesting because it is helping insurers process claims submitted faster and more efficiently to reduce fraudulent claims submitted.

Let's progress.

Now, there’s also the population exploding growth RISK– the disadvantage. The risk is highlighted by a 2014 UN report that the “lack of meaningful work among young people is playing into frustration that has in some instances contributed to social unrest or unmanaged migration.”

Case in point, six decades after the least developed countries (LDCs) category was created by the United Nations in 1971, sub-Saharan African countries have dominated the list (UNDP REPORT, 2021). Only three countries - Botswana, Cabo Verde and Equatorial Guinea have graduated out of the LDC status, with an addition of two countries expected to graduate in 2024. That is Angola and São Tomé and Príncipe.

The success of this population led growth and advantage in Africa is highly dependent on the government and their seriousness to build the necessary infrastructure that fosters development - to discourage migration spikes. And I am hopeful that AcFTA will help drive this growth instead of it being another camaraderie of the usual gatherings of Africa politicians.

The American Economic Association published a study, authored by Daron Acemoglu of MIT and Pascual Restrepo of Boston University, arguing that robotics and artificial intelligence have the power to offset the negative effects of workers ageing out of the labour force. 

PS: If you are a healthcare provider, check out this video by Dr Debo Odulana - Smart Strategies to building a profitable healthcare business.

Image: African Leadership University

Let’s talk about the creators economy and the startups making it easy to get paid, managing their businesses. I dare say ‘getting paid’ is the top-most reason being a creator is fun to do. No data to back that last statement.

The creators economy is here to stay; ask TikTok. The company is rolling out a new“TikTok Creator Marketplace API,” which allows marketing companies to integrate more directly with TikTok’s Creator Marketplace, the video app’s in-house influencer marketing platform.

That’s the shiny part. Because business has to be managed - like payment, tax and invoicing.

In our recent dive into explaining the Africa creators economy, we talked about the growth possibility (or phenomenon if you like). It generated lots of interest from readers. You should read It. We talked about them getting paid but didn’t give a lot of noise to the startups making the business of being a creator a real business.

Remember, when Jay-Z said ‘i’m a business, man!’? All creators should be a business. 

Today we dabble into that subsector that’s a bit less glamorous—but just as important. They are the backend. Doing the not so entertaining work. They’re the ones filling the blank spaces in the creators economy. These startups are developing software that manages the back-end tasks of a creators’ business, from tracking earnings on Selar to handling taxes through Keeper Tax. 

“Media innovation leads to economic shift: essentially we invent the technology and then we reinvent ourselves to suit that technology,” Saffo says. (Paul Saffo, Technology Forecaster: Stanford MediaX and MD, Foresight, Discern)

In Africa, this is a very nascent industry in its infancy.

NB: We are creating a creators database here. (coming soon!)

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Why the database? That’s how we’ll know the estimated funds raised by these guys in 2021 to the future.

This is a reminder that ‘fintech is still king’.

Selar, founded by Douglas Kendyson, a Lagos-based startup offering an all-in-one platform - Ecommerce store builder, for creators to sell any kind of product or service, announced that they’ve Over $1,000,000 to African Creators In 2021 and 60,000 Users.

Fidia, founded by Ajibola, Ogunsola and Bello,  enables creators to receive payments, sell digital products and accept membership subscriptions from their audience.

Shukran, a platform that gets you earnings from people who enjoy your creative work regardless of your audience size or algorithm.

Fawaterk, Providing small online merchants with an invoicing system that collects money from customers online

This is an ongoing listing.

What next…

Two things…we’re working on a report for the creators economy in Africa and compiling accessible data of all startups and their subsectors powering the creators economy.

Meanwhile, LinkedIn is ending its stories video just two months after Twitter did the same with Fleet.

On the other hand, September 4th is worked beard day. What should we do? Grow more beards!

What We’re Reading and Watching

• Some Nigerian-based Experts Warn of China's Growing Influence in African Technology (VOAnews)

• “Angel investing is more than just writing a cheque” — Biola Alabi, Nollywood producer (Techpoint)

• 5 Reasons Why 70% of Digital Transformation Journeys Fail (itnewsafrica)

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Thank you for reading the Edition Newsletter! I’d love your feedback, ideas and tips:omamuzo@thespicenetwork.com 

If you think someone else might enjoy this newsletter, please pass it forward or they can sign up here: https://africatechmemo.substack.com/ 

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About Edition

Everything you need to know about the booming Africa tech and creator economy, from the platforms to the people to the deals. Start reading for free.

Read the Archive

About Omamuzo Samson

Omamuzo Samson is a writer at The Edition writing about the tech and creator economy. He also works as a Product Marketer at Curacel. Based in Lagos, he can be reached at omamuzo@thespicenetwork.com or on LinkedIn at omamuzo-samson.

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While lots of sectors experienced a dramatic downturn in business during the pandemic, it was different for a particular fintech - the "Buy Now, Pay Later" (a.k.a. BNPL). It was the opposite.

If you’ve paid attention while shopping, it is likely that you would’ve noticed Buy Now Pay Later (BNPL) being increasingly offered by retailers and eCommerce merchants as an alternative way to pay at checkout. 

In the last few decades, personal credit transformed from loans to credit cards to the now BNPL trend.

BNPL in Africa

What we are seeing now is what technology know how to do best – enable. 

The rise of BNPL is solving two issues – the first is easy access to whatever you need without the attention of FFF (friends, families and foes) in the matter. The second is nobody can shame you when you are late in your payment. I know Sokoloan was fined by NITDA for shaming its customers. It wasn’t meant to be so. 

How it started

The credit idea is not new in Nigeria neither is it a recent invention in Africa. 

This is not a new concept and many of us have already experienced it unknowingly. It occurs in many forms.

For instance, credit has always been part of the system and payment default didn’t just start with the Carbon and its friends. If you grew up in the 19th century in Nigeria, you would have noticed the sign “no credit today, come tomorrow”. That sign was born out of the frustration of borrowers not paying up. 

The other sign is “business prospers when friends and family pay”. Again, this is a soft warning to friends and families because you’re dealing with some close relationships here. 

Let’s drive it home.

Your neighbourhood store allowed you to purchase products throughout the month and kept a record of all your purchases. You then pay up either at the end of the month the accumulated amount or maybe weeks. This payment is usually interest-free and sometimes in instalments (grumbles.). That is 'Buy Now Pay Later'. When you call the store to book a product/service and informing them you don’t have full cash but will pay up at the end of the month. That’s BNPL enabled by technology.

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The Growth. Some Numbers

Buy now, pay later (BNPL) is seeing some up north traction, and for good reasons: consumers see it as a way to stay within budget and away from loans and credit cards (which puts many people in debt). 

Usually, BNPL does not come with interest except for fees added for the defaulters. 

A statement in the BusinessWire on BNPL report stated; “BNPL providers in Africa have recorded strong growth over the last four quarters. Various players in the region are offering new forms of alternative credit and point-of-sale (POS) lending options such as BNPL to lure customers offering them a convenient and flexible payment model.”

Also, A study performed by Coherent Market Insights reveals that the international BNPL market was valued at around $7.3 billion back in 2019. This nascent market is projected to reach about $33.6 billion during 2027, growing at an annual rate of approximately 21.2% between 2020 and 2027.

This growth is majorly attributed to a wide number of benefits offered by the buy now pay later platforms to its users – the buyers. Registering as a user to any of the BNPL platforms is very easy; nothing compares to what you get from the traditional banks. Once the account is created, the user submits bank details for credit/financial history. Scratch that. Services like Mono, OnePipe and Okra provides your credit/financial history which determines how they proceed with the user. Mostly, the user is approved where access is given based on the financial history. That’s for risk.

Referencing the crowdfund insider report, “Buy Now, Pay Later or BNPL adoption is on track to grow significantly in the next few years with the Asia-Pacific region being one of the main drivers.”

Several key global players lead the buy now pay later industry - Afterpay, Klarna and Zip Pay, which has a 25% stake in South African BNPL payment fintech, Payflex. 

A recent report by Worldpay from FIS forecasts that BNPL services will steadily gain eCommerce market share, earning nearly 3% of global eCommerce spend by 2023. Similarly, IBISWorld predicts the BNPL industry will grow by 9.8% annually over the next five years to $1.1 billion.

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But, what exactly is BNPL?

BNPL. What it is and the rise

BNPL is a shopping alternative that offers an option to consumers to take home their purchases while paying a fraction of the cost upfront. Most times, payment is in instalments. 

It allows retailers – online and offline, to sell their products to customers who prefer to pay in instalments. In Africa, consumer behavioural changes that come with economic stress, a digital boom, and COVID-related job losses and pay cuts have BNPL positioned to take advantage of the challenges to offer more people ways to live within their budgets. Talk about inclusion.

They offer a “No interest benefit” and allows payment to be made in instalments.

A recent report by Global Web Index found 83% of consumers think brands should be providing flexibility in payment options. 

Notwithstanding, this growth poses both an opportunity and a problem to the industry; as businesses team up with BNPLs, BNPLs experience a greater responsibility to only provide their services to verifiable partners. 

As Affirm reported, 43% of new users prefer to use the company’s pay over-time services as it helps them stay within budget.

What was the alternative?

Credit Cards.Credit card companies filled in this gap for a long time. But there are problems associated with using credit cards - exorbitant fees, that leads people into debt. While the pandemic left many jobless, it taught millennials and Gen Zers — a growing demographic with more than $200 billion in spending power — the hard way of sorting out their debt issues. In turn, a number of them have become debt-averse and increased their demand for better financing options. 

Impact of Coronavirus (Covid-19) Pandemic

COVID-19 pandemic has adversely affected the economies of various countries across the globe. According to the International Monetary Fund Analysis, the global economy is expected to shrink by 3% percent in the year 2020 compared to year 2019. Along with the decreasing GDP, the purchasing power of consumers across the globe decreased.

Transforming retail

The world of retail is transforming with the changing pace of consumer behaviour. Payments powers commerce and plays a critical role in purchasing processes; being adjusted to the demands of consumers. Consumers will always correct the market. 

Merchants are constantly looking for solutions that match consumer preferences, and consumers are also looking for more flexibility with how they pay.

As the rise of instant access to products and services continues, consumers can order now and pay later with little to no risk. BNPL takes it further, allowing consumers to enjoy the product before payment is complete. 

With contraction on consumers buying power in Africa, BNPL looks like a saviour merchants have tirelessly waited for. 

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Competition Heats Up

Traditional banks have declared that they won’t be giving fintech space to breathe. Either by way of stimulating policies that either slows fintech growth or release similar products into the markets – which almost always don’t get the desired traction. 

For instance, in Nigeria, GT Bank Hub Credit provides a spending limit of up to ₦1,000,000 and a minimum of ₦20,000 to shop on the Habari - its marketplace, payback is within 12 months at an interest rate of 21% per annum.

Consumers benefits 

• It provides the convenience of a credit card without needing an actual credit card. Consumers are decreasing their debts. Buy Now Pay Later provides the flexibility to access and enjoy the benefit of goods before making full payment.

• A full credit check may not be required initially. Pay later companies can access information regarding the consumer, but the validation process is typically a much less rigorous check than with traditional methods. 

Benefits for merchants 

• Lower cart abandonment rates. A Big Commerce 2018 omnichannel report shows that 31% of consumers only purchased a good or service because they had an option to Pay Later. Adding this method to the checkout process could help recoup some $34 billion worth of goods and services left in carts.  

• Consumers are enabled to spend more. By not paying upfront, shoppers tend to add more items into their cart that they wouldn’t normally do without the pay later option. The omnichannel report by BigCommerce indicates 36% of shoppers said that they spent more money.  

• Funds upfront. Lots of BNPL companies offer the full amount of the sales upfront to the merchant (sometimes with a percentage fee is giving to the BNPL company). This helps to keep cash flow as regular as possible. 

• Builds loyalty with consumers. This seamless shopping experience impresses consumers. It also takes out the friction of the buying process which leads to a more positive shopper experience. The added value of a more seamless process provides additional loyalty, and consumers are more likely to return to purchase again. 

The problem.

While the BNPL model continuously strengthens its position in the global market, like every other payment model, BNPL too has a flipside.

The rising interest in BNPL has regulators in the United Kingdom and Singapore begin looking more closely at the potential risks involved with offering these payments services to consumers.

Fraud. Identity theft complaints in Australia involving BNPL doubled last year, creating a new record. The opportunity for fraud is high in this industry as it can come from both ends: customers using false identity information while illegitimate business partnerships can scam the BNPL. Because BNPL companies facilitate the credit to these clients, they need to ensure they are doing everything they possibly can to protect themselves from such fraudsters. 

High Default Fees. One major factor restraining the growth of the global buy now pay later market is the increasing complaints of high default fees, which leads to debts. For instance, Afterpay charges $10 for each missed payment and $7 if the instalment remains unpaid after a week. The users who miss all the instalments are charged late fees of $68. 

The unbanked and underbanked. However, there is one core challenge that the BNPL channel faces when it comes to underbanked and unbanked consumers. That is the lack of traditional bank accounts and/or cards. 

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BNPL startups in Africa.

The BNPL's like Carbon Zero, Aramex, Tabby, Shahry, Qesma, Postpay, Cashew, Tamara, Valu, Spotii are gaining a stronger foothold - replacing the much widely popular cash-on-delivery (COD). Tabby, Tamara, Postpay, and Spotii have cumulatively raised around $43 million for rolling out their operations in the region.

The future. What’s next for the Pay Later space? 

Instalment payment a.k.a. BNPL is not new phenomenon.

For instance, making payment in instalments in Brazil, have been around since the 1950s, and as credit card access grew, instalments have become a core part of the online payment process. According to an Ebanx report, 54% of Brazilians who paid with a credit card also paid with instalments in 2017. As millennials and Gen-Z are now the world’s most powerful consumers, it’s no wonder that the buy-now-pay-later option is becoming more present on the checkout page. 

The increased resurgence of BNPL through digital implementation is due to a combination of more tech-savvy consumers and improved technology by FinTech. Merchants who cannot build this functionality can easily integrate with a myriad of fintech – CredPal, Carbon Zero etc.

Due to the fast pace change in consumer behaviour, it’s still early to know how the groove brought by BNPL will pan out. But, it’s already clear that we’ll be seeing new entrants into this space coming with more innovative and seamless solutions for consumers. The growth of global BNPL players - Afterpay, Klarna and Splitit, indicate the value of this payment method. Ultimately, the success of pay later payment methods lie in the hands of the consumer. 

Per a report by Coherent Market Insights, Europe, Middle East, and Africa are also expected to exhibit significant growth during the forecast period, owing to the entry of giant retailers in the BNPL industry. For instance, Marks and Spencer Group plc, a U.K.-based multinational retailer, started offering to buy now pay later services to its customers from October 2019.

Rounding off.

There is the issue of dealing with a trust deficit for online payment. The low financial inclusion means a widely popular cash-on-delivery (COD) payment model. However, the BNPL model is being actively embraced by more people, especially the millennials and Gen Z, as it assures them of receiving products first and is deemed as a great enabler for those in the lower-income bracket who find it convenient to break their purchases into flexible instalments. Again, financial inclusion.

The Worldpay’s 2020 Global Payments report projects that BNPL would account for 9% of the ecommerce payments by 2023 in the entire European, Middle East, and African region.

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What We’re Reading and Watching

• The Africa Creators Economy Explained (The Edition) 

• 39 million Africans may fall into poverty this year, says Adesina (Guardian)

• Klarna’s U.S. Chief: Expect a 12-Month ‘Land Grab’ in Buy Now, Pay Later Services (The Information)

Thank you for reading the Edition Newsletter! I’d love your feedback, ideas and tips:omamuzo@thespicenetwork.com 

If you think someone else might enjoy this newsletter, please pass it forward or they can sign up here: https://africatechmemo.substack.com/ 

About Edition

Everything you need to know about the booming Africa tech and creator economy, from the platforms to the people to the deals. Start reading for free.

Read the Archive

About Omamuzo Samson

Omamuzo Samson is a writer at The Spice Network writing about the tech and creator economy. He also works as a Product Marketer at Curacel. Based in Lagos, he can be reached at omamuzosamson@gmail.com or on LinkedIn at omamuzo-samson.

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The creator economy is on the rise in Africa. And paving way for other opportunities also - enablers and supporters. As they say; tech is an enabler. Before now, you have to be an established artist to be famous or with a big budget to make things go viral. It’s no longer so - tech has levelled the field.

So…tech is a leveller.

Not to take one from the other, we should grant them the gift of Siamese twins - tech is an enabler and a leveller.

Africa has the world’s fastest-growing, and increasingly urbanized young workforce. These demographics, mix with improved education levels, have led to a rise in the consumption of online services.

Few Facts

Increasing Internet Access. Between 2010 and 2019, more than 300 million Africans gained access to the internet, with nearly 500 million new smartphone connections. In another decade, the number of Internet users in Africa is expected to grow by 11%, representing 16% of the total global amount. [IFC Report]

A person just needs to have a device - advantage of the rise of usage of phones and internet in Africa, to start creating content, upload the content, share the content and the next is they are a star. They’re now a creator…and because the future is mobile, they are in everybody’s face. Well, that depends on algorithms. Algorithms in platforms can be said to be a ‘technical means of sorting posts based on relevancy instead of publish time’.

The pandemic added fuel to existing trends pushing growth in the creators economy allowing for an upward rate of internet content consumption.

COVID-19 contributed to the growth

Welcome To The Creators Economy.

The creator economy refers to the numerous internet businesses built by independent creators - vloggers, influencers, writers, to monetize themselves, skills or their creations. 

There are also companies serving these creators, from content creation tools to analytics platforms to payment processors. 

The Platforms. The rise of creators and its effervescence in the creators economy is made possible because of platforms - Facebook, Instagram, Twitter, TikTok and other emerging ones.

Big tech platforms are fighting (and copying themselves) to keep creators on their platforms to drive engagement.

Interesting times. Creators are looking for ways to monetize their content more directly and earn a bigger slice of the overall revenue pie - away from platform dependencies. In the past, how the whole thing used to play out was to 'wait for you as a creator to be discovered'. 

That's no longer the case. This makes the emergence of the creator economy exciting. Platforms have democratised the whole thing that a John who nobody knows can whip out something with his phone and boom!…he’s an influencer.

Now, nobody can ignore him. The platforms can’t ignore them again. They now have a voice and a following.

Last year’s end SARS movement in Nigeria could see how influencers help with the fuel - Falz, Mr Macaroni and others.

Brands are paying attention. Unheard of until recently, the profession of influencer (yeah...it is now a profession) is enjoying growing success on the continent. Eager to acquire a young and connected clientele, brands companies are now eyeing the most popular of these new social media celebrities.

Monetization. Everybody is getting paid. It doesn't pay to be famous and be hungry. It was so in the past, now creators can reap the benefit of their hard work. And they do this in many ways - brands campaign, sell product/service, advertising or tips from fans etc.

As a creator, you look like the pivotal point for social platforms to hinged their growth on and this is growing with no plans of stopping soon. There’s no shortage of monetization opportunities for you.

TikTok recently celebrated a Senagalese born Italian raised creator - Khaby Lame hits a milestone - 100M followers.

Some released stats…

• In 2020, Gumroad creators earned 142milliion in total with 8 creators earning over $1million and over 170 creators earned at least $100k.

• Patreon’s creators now make over $1billion annually.

• TikTok announced a $1billion creator fund.

YouTube was the exception, giving creators 55% of ad revenue rather than no revenue sharing at all. It’s paid out $30B to creators in the last 3 years. (CB Insight)

It is estimated that by 2025, the Internet economy will contribute nearly $180 billion to Africa’s economy. (IFC)

How Creators are Monetizing Their Brands

I’ve talked about the creation of content and the viral possibility. It doesn't end there. That’s just the start. You have to actually build a brand to start getting paid enough that you’ll quit your job and go full time.

While it’s easy to start (create) a video on YouTube, Facebook, Tiktok OR a newsletter on Substack, Revue or Bulletin, OR podcast on Clubhouse, Twitter Spaces, Fireside, Reddit Talk or online course, it turns out that running a content business is difficulty and hard work. I mean really hard. In fact, content may be the single worst digital subscription model a solo entrepreneur can choose.

It all started with passion. Passion is alone is not enough. Even if you love writing, speaking, acting, performing or teaching, making content the bedrock of your empire in an age of extreme competition for attention is a recipe for pain and heartache.

It’s beyond the passion economy. It is the creators economy.

The fact is when you stop writing, teaching or recording, people stop paying.

It’s exhausting.

That’s you should start thinking of the business from day one. You should always be in demand. You are sometimes required to burn the midnight oil to keep your audience engaged.

As being an influencer/creator evolved into a more full-fledged career, indirect monetization proved insufficient. Ad deals depend on the notion of brands, most times with strings attached, is bound to fluctuate from month to month, forcing creators to cater to broad audiences, making it difficult for them to double down on specific niches or demographics.

The Platforms are paying.

The current robust creator economy is propelled largely by the tools that allow smaller accounts to monetize their own work more directly. These include - Selar, Fidia, Plaqad, Talent-X and other African emerging startups.

Creators are having prominence. After years of fighting to be taken seriously, they are finally being recognized.

Facebook has the creators fund and says it planned to have invested $1b at the end of 2022. In 2020, Substack offered $100k grants to independent writers and in 2021, announced a $1M initiative to fund local journalists. Nigerian writers - Joey Akan and David Hundeyin were beneficiaries of the grant. Twitter has started adding a Tip Jar to user profiles which is essentially a way to get paid as a creative, and recently, they announced super followers. YouTube launched several ways to help creators get paid.

The battle for creators is unending. I don't want it to stop.

Read these —-> 

Spotify Greenroom: Live-Audio App Answer to Clubhouse. 

Clubhouse announces plans for creator payments

Others…

• Substack writers take home 90% of subscription revenue.

• Twitch partners collect half of their subscription fees.

• Patreon creators get paid between 88% to 95% of their subscriptions.

• OnlyFans creators take home 80% of their earnings.

Let’s Talk About Payment.

In one of our memo, we talked about how the emergence of fintech caused a forward spur for e-commerce in Africa because now a merchant can get paid without worries…and by that, we’ve seen embedded finance has a thing.

The same is happening in the creators economy. They are getting paid. What is a better way to pay them? How - as a creator, do you want to receive payment for your work?

Whether creators are gaming streaming, put up a paywall for analysis on niche internet memes, or selling feet pictures, these creators are pursuing alternative ways of monetization. 

A flourishing ecosystem of startups is emerging to meet that demand, from app-specific editing tools to multi-channel analytics to merchandising tech to payment. 

The Payment Problem. In Africa, processing payment is an issue that's being solved. One of the reasons content creators in many of these platforms like Substack or Patreon have not really scaled in Africa. Payment is skewed.

For instance, Substack uses Stripe as its payment processor, writers in Nigeria can’t set up a Stripe account to easily monetize their newsletter subscribers. “Akan says he eventually haggled his way into obtaining an American bank account…” - Rest of the World.

Startups are trying to solve it. Two ways - Payments startups like Paystack and Flutterwave making it easy for Africa creators to receive payment. Others like Fidia, Selar, Talent-X and Plaqad make it easy for any African creator to monetize their craft.

Technically, creators need a platform to host their content and a more effective way to monetize and manage their money - e.g. tax.

Rise of the platforms (startups) in Africa solving for the creators economy

• Selar an eCommerce tool creatives & entrepreneurs use to sell their content, products and services across borders without any hassle.

• Fidia enables creators to receive payments, sell digital products and accept membership subscriptions from their audience.

• Plaqad Discover and collaborate with top influencers, content creators and publishers from all over the world and begin your journey to making your voice heard.

• Shukran is a platform that gets you earnings from people who enjoy your creative work regardless of your audience size or algorithm.

• Honeycoin Helping Creators & Gen Z build wealth and manage their money is what we do.

• Talent-X finds the best projects to empower producers, filmmakers, investors and distributors to create the best African content that will capture the hearts of the people worldwide.

• Africacreatores Sell ​​digital products, physical products and multiple services from a single platform.

• Amaze makes impossible connections possible; helping bridge the gap between celebrities and their fans.

• Minly allows users to buy personalised video messages and shoutouts from their favourite celebrities.

*Watch this space for our deep dive into the stats of the startups and investors powering the creator economy in Africa - the drive, the funding and the numbers. 

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You also have Paystack Commerce and Flutterwave Stores playing as a platform and payment processor.

These platforms are making the numbers too.

In 2020, Selar grew to 17k users and $270k in revenue, and in 2021 they already paid $1M to creators with 60k users.

Beyond payment…Investment

We’ve started noticing that investors are not blind to the creators economy either. Somehow, I feel the first in - wins. Investors are not sleeping. Investing in this nascent sector - a chance to bet on the future success of an internet personality - has been gaining steam. 

The creator economy has seen a record $1.3B in funding in 2021 alone. - CB Insight

• Egyptian startup Minly, a platform empowering stars to create authentic, personalised connections with their fans across the MENA region, announced last month - July, that they’ve closed an oversubscribed US$3.6 million seed round.

• Amaze - Africa’s Cameo, announced recently that it got undisclosed investment from the likes of Don Jazzy, I&I VC, Bisola Aiyeola and the Temple Company.

The craziness of an idea.

TakeHumanIPO. A type of exchange to let fans buy and sell shares of people. It sells investments in social media personalities, entrepreneurs and venture capitalists. 

According to The Information…

Soccer legend Pelé went live on HumanIPO, selling 10 shares of $PELE for $10,000 each. Shares of $PELE have risen 1.5% in the last week, to $10,150 today. That’s better than the 0.3% rise in the S&P 500 over the last five days.

Sheridan Clayborne, the 21-year-old cofounder of 401k match service Lendtable, will sell shares of himself at $100 a share. The startup takes a commission of between 1% and 10% from the creator raising money and a 0.5% fee from investors when they buy or sell shares. 

Rel Brands help creators start their own retail brands. The concept sounds similar to Pietra, which handle the logistics of creating a product line.

What next…

At this stage, the Africa creator economy is still fairly nascent, but investors are beginning to take note given the recent investment in the space - Minly and Amaze. We should expect media giants to roll out more monetization tools in an effort to keep creators and their fans engaged on their platforms. In that same fate, creators are likely going to favour becoming platform-agnostic and become independent brands to make certain they're less dependent on any one platform. And get paid how they desired.

Here's what else is going on

Deals

Pngme, a platform that provides financial institutions and fintech startups with users data via its API and machine learning infrastructure, has announced a $15 million Series A.

PayQin, a cross-border payment startup that operates a comprehensive e-wallet service for the underbanked in West Africa, is announcing a new €300K seed investment round that takes the company’s funding up to $1 million.

What we overheard 

Pantami recently took members of the board of NITDA to Turkey, in a bid to bribe them to get his controversial bill to scale through.

Ghana-based payments startup Waya is seeing month-on-month growth of between 20 per cent in its three existing markets, prompting it to launch expansion activities into three additional African countries.

The Central Bank of Nigeria has just frozen the bank accounts of Nigerian fintech platforms Risevest, Bamboo, Trove and Chaka for the next six months.

What We’re Reading and Watching

• Gen Z LinkedIn is full of parodies and snark (Bloomberg) 

• Social media fraud: The influencers promoting criminal scams (BBC)

Thank you for reading the Edition Newsletter! I’d love your feedback, ideas and tips:omamuzo@thespicenetwork.com 

If you think someone else might enjoy this newsletter, please pass it forward or they can sign up here: https://africatechmemo.substack.com/ 

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Everything you need to know about the booming Africa tech and creator economy, from the platforms to the people to the deals. Start reading for free.

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About Omamuzo Samson

Omamuzo Samson is a writer at The Edition writing about the tech and creator economy. He also works as a Product Marketer at Curacel. Based in Lagos, he can be reached at omamuzo@thespicenetwork.com or on LinkedIn at omamuzo-samson.

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