‘We want to reach 20 million people using our technology to save, lend and invest’
Riby, a startup that offers online-based financial management solutions recently clocked the 100,000 user mark and sealed a mouthwatering partnership with Microsoft just under one year of starting business; but its long-term goal is to grow the user-base to 20 million in the near future. Abolore Salami, founder of the startup tells FRANK ELEANYA how the company have created a new form of competition in the financial services sector.
What is Riby’s objective?
Riby’s number one objective is to have a platform that makes it easy for people to be able to save, to be able to invest or plan their expenses and also to collaborate with other people. Those are the four cardinal objectives that we have. We are going to be that platform that connects people to better savings account to be able to plan their expenses and to the right investments to make it easy for them to invest. Look at FGN bonds for example; we can make it easy for people to subscribe with the click of a button because we already have the requisite data for those types of investments. People have problems saving their money, planning for things they want to achieve like buying a car, building a house etc. We help them plan all these activities. Because of the path to acquisition – a very long path, our focus has been in first automating the groups. Today we automate different types of groups; cooperatives and company groups. And we work with different partners like financial institutions, development banks, and microfinance banks. The Bank of Industry (BOI) is one of our clients. We customize our platform for BOI to manage the agents and the groups that they are lending money to.
Salary earners are your primary targets…
Salary earners and income earners; if you earn an income and it is enough to be saved, you are our target.
If as a salary or income earner I want to think savings, what is a proper savings culture?
You must save a portion of what you earn every month, no exceptions. Then you must invest a portion of what you saved into something that brings you more money.
How long has Riby been in operation?
We have been working on our products for the past four years. We finally fully launched our products in May last year.
You are basically an online firm?
For now yes. However we have offline engagements like our agents on the field who are working with people and running the platform for people that cannot go online themselves. The agents help them set up. In the future they will be able to use it in paying tax by just using SMS. The future is this year. So aside from our online platforms where we are working in, you can interface with us through the agents that will run it on your behalf. Of course you still have to authorise certain things before the agents can act. The future is that we will be able to do SMS, USSD and chatting by AI bots to make our services more efficient.
What has the reception been so far?
We kicked off with a good number of take-off clients. We have gone from 4,000 users early last year to about a 100,000 users today. We have about 900 groups, about 10 different company partners and clients. We are growing at about 500 to 1000 users every day. We have groups that are using our platform to save and to lend among themselves. For us the big thing for uptake right now is to strengthen our products. That is why we are going into partnerships with Microsoft for instance. We also got a grant from the World Bank GEMs. So we have the capacity to drive the ability for our users to do literarily all the things we hope they can use our platform to do.
In what ways do your products vary from the conventional credit services firms?
We are not even a financial services company; even though we have a few things we are working on to make sure that we can provide financial services when we need to. At the core we provide just technology. We allow the individuals and the groups to engage with the financial providers that they want to engage with be it the microfinance banks or the regular banks through our platforms. Where the financial institutions are not providing such services the groups provide it for themselves. We just automate that experience. So it is not us that are actually competing with the banks or financial institutions, it is the people that are using our platform that are going side by side with the banks. In any case, the banks have to say “We can provide a better service, than you can provide for yourselves”.
What characteristics stand out with cooperatives with regard to savings?
There are two things. First, it is difficult to lend in Nigeria. No credit record. With payment, collection is tough. There are no data to actually validate people. All of these are tough so I can understand the position of banks. Nobody knows anybody technically. But the groups know themselves. So it is a lot easier for them than me just lending to somebody that I am meeting for the first time compared to somebody that I have known for ten years. That is what makes it easy for the groups. So what we are doing for them is to make sure that while they are doing all of these activities, that they are registered with the state or local government although they are doing it now in an automated way. For example is a guy that was able to take a N9 million loan when he was only qualified for 10% of that amount, based on his savings within the group, but because he is a treasurer and he can literarily write the cheque and talk to the people approving the loans to approve it, he was able to do that. But with technology you cannot do that because it is transparent and it is easy. Ideally in the future, when the banks open up their system which I think they will, we should be able to even integrate into the banking system and get the real-time balance of your group. So each member knows the status of their funds. It is clear, it is easy but the beauty of it is for groups that are properly well governed and are not doing any shady business, it makes it extremely easy for them to run all of their process without having to be using pen and paper. Even if they use that, it would just be some recording, some second factor or third factor authentication as opposed to being the primary channel.
In trying to set up a relationship between the cooperatives with the banks, how did you deal with trust issues?
The banks have their own indicators, their risk assessment that they use to qualify any lender. We just helped them to automate the process. What our system provides is a place for the banks to manage these groups because they do not have that feature in their core banking application, whether it is mobile banking or agency banking. They do not have a platform where they can assess groups or gain valuable data on the groups. Our role is the initial provision of that data and when necessary we provides some credit scoring based on the data that we have. They take that and combine it with what they have in their bank system and make an assessment of whether to give someone a loan or not. That is on the banking side and they do that on their own.
What is your organisation doing about millions of unbanked Nigerians who are unable to access loans?
Frankly we will only be able to get between 20 to 30% of the people into the system today. The rest of it will be manual and offline. So there will even be need for an agent to physically meet the people at the far bottom of the pyramid. So we are going to need to rely a lot on our agent network. We are also going to need to expand our offerings beyond regular internet based services to what I have already mentioned, the USSD, SMS and simple chat-based type interaction systems.
What really works the most, is it word-of-mouth or internet-selling?
It depends on your products. For us it has been relationship, word-of-mouth and direct-selling. Internet-selling eventually will happen but it is very generic. Everybody is in it already. But when you have a relationship and there is a referral system that is better. What we run away from on the internet is “Oh I am this, I am that”. We do not want to be one of the noise makers.
But now we have over 100,000 users, we have proven sufficiently that we know the market and a huge one at that in what we are doing. So we think it is time for us to begin to position our brand, position our services. Our business is very personal so screaming at the top of your voice will not make a huge difference.
Does taking financial planning beyond the cooperatives, the groups and individuals you already target to schools and other unserved markets feature in your long-term goal?
We do have plans. As a matter of fact, one of our investors and partners asked us “Don’t you guys have something for kids?” may be to combine both education and financial literacy in fun ways. Ways that we can teach kids how to spend their money and save. We have a lot of these request and we know the size of what needs to be done – like the magnitude of financial education, planning, change of culture, change of attitude and the things that need to be done. So yes we do have these plans but we just have to manage how we are deploying resources and when we activate the plans how beneficial is it for us a business and also how we are going to serve our clients.
In view of your recent partnership with Microsoft and other corporate organisations and institutions, what are you planning for the future?
The critical goal is 2 million users good, 5 million users fantastic, 10 million users awesome, and 20 million users now we are talking. The objective is to get to a point where we know that millions of Africans are using our products to sufficiently become wealthy and having a life where it is easy for them to go from salary to good life. Our goal is one single platform where all your finances can be managed.
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