MIT Solve

Solution Overview

Solution Name:

Kobopay

One-line solution summary:

Kobopay provides to the doorsteps of users access to everyday financial services needed to increase their economic activities

Pitch your solution.

According to a research by EFINA 36.6% of Nigeria's adult population do not have access to formal financial services. Bridging this gap will help Nigeria get closer to becoming an economic asset in the digital era.

To be a part of the solution, kobopay was founded to provide financial access to the underserved communities. With an easy sign up process that takes less than 5 minutes, Kobopay also deploys a growing agent network that works to bring our services offline and directly to the most disenfranchised members of our society. Our agent network relies on existing brick and mortar locations within communities like corner shops, pharmacies e.t.c. Leveraging on already existing businesses helps to improve trust between Kobopay and members of the community.

At scale Kobopay will be able to help improve the income of our users/agents, create jobs and provide the disenfranchised access to the formal economy.

Film your elevator pitch.

What specific problem are you solving?

Kobopay is working to solve the issue of digital exclusion. Out of the 99.9 million adult population in Nigeria, 40.1 million are still financially excluded. Globally there are over 1.6 Billion people that are financially excluded according to World Bank 2018 report. This financially excluded part of the adult population is our Total Addressable Market. Nonetheless, Kobopay intends not only to serve the financially excluded but to also offer better services to the banked population.

Also, according to the Enterprise Development Centre (EDC) of the Pan African University, cash payment accounted for 95.3% of transaction volumes in Nigeria at the end of 2018. The Central Bank of Nigeria adopted the National Financial Inclusion Strategy, NFIS, aimed at achieving 80% financial inclusion in Nigeria by 2020, sadly this has not been achieved.

These above mentioned statistics reflects in the latest statistics from Nigeria's Bureau of Statistics which shows that that almost 83 million people, live below the country’s poverty line ($381.75 per year)

To help close this gap, we focus on key areas that a vital to the rapid adoption of mobile money in Nigeria namely; Value, Customer Service and Delivery Channel.

What is your solution?

Kobopay is a Digital payment platform that provides affordable financial services to its users especially the underserved population. This is done through an easy to use application combined with a network of local business leveraged as agent’s/service points.

We currently provide the following services;

1. Bills payment

2. Ability to send and receive money

3. Micro-savings

4. Micro-investments

We also intend to introduce other value added services once we scale our agent network. Services like'

1. Micro-credit

2. Micro-insurance

3. Micro-pension

4. Remittances

What makes Kobopay unique from other digital platforms is its combination of traditional banking via its digital platform with last mile financial service delivery through local businesses that serve as agents to provide Kobopay services in physical locations.

The universal provision of financial services to all and sundry in Nigeria in a customer centric manner is our goal. Within our first 3 years, we aim to secure a microfinance banking license to improve the list of services we can offer to our customers and thereafter transition over time into a full scale digital bank focusing on democratizing financial services in sub-Saharan Africa.

Who does your solution serve, and in what ways will the solution impact their lives?

We are focusing on rural and semi-rural communities with little to no formal banking presence. In these communities, we will be and are partnering with local businesses such as market women and the neighbourhood convenience stores to serve as kobopay agents. Leveraging on already existing businesses helps to improve trust between Kobopay and members of the community. It also provides us with available locations where we can meet community members, collect direct feedback and provide them with basic knowledge on the importance of digital inclusion for them.

We are not just passionate about digital inclusion but the potential for growth that it signifies especially for trade workers and micro-businesses.

The most important benefit is that these underserved people will be able to conduct their financial activities with less stress and exertion and more ease and at a lower cost. Also, they will in some cases be able to access formal financial services for the first time and get formal/government identity through the Bank verification number (BVN) and be able to access government programmes and also access services such as micro-insurance, money transfers within country (and from abroad later), micro-loans, health insurance and micro-pensions over time as we add more services.

Which dimension of the Challenge does your solution most closely address?

Scale safe and private digital identity and financial tools to allow people and small businesses to thrive in the digital economy.

Explain how the problem you are addressing, the solution you have designed, and the population you are serving align with the Challenge.

We are positioned to provide the solution needed to drive digital inclusion.

Technology: We continually expose our agents to emerging technologies. This also has a knock-on effect on the surrounding community who might otherwise have little to no access to Information technology.

Health/Financial Security: Kobopay is geared towards access to financial security: savings to have emergency funds, micro-loans for business expansion, micro-insurance to secure assets, health insurance for healthcare and micro-pensions to cater for the old.

Gender Equality: 60% of our agents are women, this is in line with reports that women invest more capital in their families and communities.

In what city, town, or region is your solution team headquartered?

Abuja, Nigeria

What is your solution’s stage of development?

Growth: An organization with an established product, service, or business model rolled out in one or, ideally, several communities, which is poised for further growth.

Explain why you selected this stage of development for your solution.

To achieve our core mission of access to finance for the underserved, we embarked on getting merchants for our platform to enable easy payments for services. We currently offer services like Bill payment, funds transfer, Savings, Investments, etc. We currently have over 17,000 users and have processed USD2.2 Million in transaction volume.

To provide last mile availability of financial services, we have set up our agent network across Nigeria. We have already secured 50 local businesses serving as agents in 4 Nigeran states and currently onboarding more. To accelerate this process and scale fast, we are exploring a collaboration with businesses with large physical presence.

We are already putting up a framework internally to deploy more value adding financial services such as micro-credit, micro-insurance among others via our platform. We intend to deploy this once we conclude the rollout of our agent network to an appreciable degree.

Who is the Team Lead for your solution?

Leslie Emenalo