‘We want to reach out to those at the bottom of economic pyramid’

Onyeka Adibeli is co-founder and Head of Implementation at Oradian, a Fintech company that offers software-as-a-service (Saas) to microfinance institutions. In this interview with Frank Uzuegbunam, he discusses cloud banking software for microfinance institution amongst other issues. Excerpts:

Oradian works with 30 microfinance institutions in Africa, out of which 22 are in Nigeria. How did this focus on MFIs come about?
We want to reach out to those at the bottom of the economic pyramid. Unlike the commercial banks that target corporate entities, Oradian focuses on bringing the unbanked into the formal banking system which is why microfinance institutions are the focus of our activities.
I can recall while I was working with a big microfinance institution that the first set of disbursements to a client was done using cash. However, when the institution needed to guard against fraud and fraud related issues, they had to issue cheques. When the clients would get to the bank, most them would pull off their shoes outside before entering the branch, and when inside would sit in one corner. When we started Oradian, our target was to reach out to these clients so that they too have access to financial services. So it is more of a passion that aligns with our business.

Oradian provides cloud banking software for microfinance institutions: how did you decide on providing such a specific solution for microfinance institutions?
Technology is out of the reach of most microfinance institutions. This is because of the high cost of setting up software, the cost of power, the cost of human resources, and the cost of systems maintenance. Some microfinance institutions in a bid to adopt technology sign 5-year contracts and pay up front for software that will run for 5 years with about 20 percent of the cost going towards maintenance. This impacts cash flow tremendously.
When we started, we made up our mind to cut out unnecessary burdens and provide Software as-a-Service so that institutions pay for what they use– and only for what they use. If I have a thousand clients, I should pay for a thousand clients. The barrier between MFIs and effective tools becomes much lower when they pay for only what they use. With traditional systems, if you have a thousand clients you still have to pay the massive cost of the system. Because Oradian allows customers to pay based on what they are using, our customers can focus on their core business and growth.
We recommend laptops, because the keyboard makes it easier for the staff to just key in the data and print reports, but also because of the life span of the battery; a new laptop battery should last for about 4 hours so while you are on a laptop you are not dependent on electricity, which is intermittent. Electricity will only be necessary when printing out reports or other activities which might take an average of one and a half hours to complete a day’s transaction in the system. All these are what we have factored in to provide services, because we are looking to provide services which will reduce the customer’s cost of operation so that they can free up funds to do their business.

What are the biggest challenges faced by your customers?   
I think the major challenge that we have is reporting. Usually if the reports are done manually they receive it in the head office on the 7thor 10thday of the month. Sometimes, the report for the previous month is finalised around 20thor 21stof the month. At that point, the information in the reports is outdated and decisions cannot be made based on it. With Oradian, you have access to your data in real-time, allowing you to make informed decisions and instantly react to your key indicators and what your business needs now, instead of waiting a full month to respond. The only challenge I would say for now is the fluctuation of the monetary policies.

Why should financial institutions adopt Instafin instead of other finance software?
Instafin, Oradian’s flagship software, was designed for financial institutions serving the bottom of the pyramid, the unbanked, at minimum cost. And most importantly, we immediately see the impact of our work because our customers quickly take control of their portfolios and grow their business year on year. Their growth is directly proportionate to the impact we deliver. We know how to design impactful processes and technology because we are experienced practitioners who know the sector and its challenges well. Experience and a passion to provide the services that work specifically for MFIs is what actually differentiates us from other providers of finance software.

Most software come with license fees. Do Oradian’s customers need a license to access Instafin?
Unlike most software providers, we offer an annual subscription. Rather than requiring the customer to pay a 5-year contract upfront like traditional software providers, we believe in the subscription economy. Customers spread their capital over years with a subscription rather than buying the software licence upfront and instantly taking full ownership of their IT. Subscriptions make it possible for them to have enough funds to run their business, while becoming massively more efficient. The subscription includes the full service from infrastructure, database management, local support and licence to use the software. Customers are essentially outsourcing their IT challenges to Oradian and giving themselves the ability to concentrate on the core business competence and growth. Part of the reasons why we adopted the one year subscription is so that at the end of the year if a customer is not satisfied with our services they can let us know or can just quietly walk away, rather than being tied down with a contract of 5years. That said, our customers don’t leave us because we deliver true value to their business.

Could you tell us about your presence in Nigeria? How deeply involved are you with your users in Nigeria in terms of support and after-sales services?
Oradian’s system is designed specifically to deal with issues that microfinance institutions experience. Our biggest customer in Nigeria is DEC and we like to do routine visits to keep learning about their business and evolving requirements. DEC operates across 109 locations in the northern part of Nigeria across 19 states. We don’t receive many support calls because our system has been properly built. We built Instafin in collaboration with MFIs so we could overcome the challenges and technical issues before our customers ever have to face them. Our customers test our system to ensure it works for them before we roll out. The system is built properly and is properly tested. From time to time we do a routine visit to check how the systems are working but calls about issues and complaints are rare. However, when they occur, we deal with the issues within 24hours.

Your company is focused on enhancing financial inclusion and your end goal is to reach 100 million unbanked people around the world. Has the increased investment in Fintech helped financial inclusion?
Fintech is the way forward and that is why there’s a rush now. With the investments coming in, they will speed up the process and at the same time streamline it. So, yes it will go a long way.

Oradian recently won two awards at the just concluded Cashless Africa Expo; Best Microfinance Enabler Platform (Instafin) and Microfinance Empowerment Recognition Award (Oradian). What do these awards mean to you?
I will say it’s a recognition of the services we’ve been able to deliver. It’s more like a pat on the back and this for us is a challenge because we have to do more. So we have taken up that challenge to do more, so that by next year we will win more awards. The fact that we won an award is not enough for us to go back and relax. We will always be at the forefront.

The World Bank has set the target for Universal Financial Access by 2020. How do you see Oradian contributing towards the achievement of this goal?
We see this complementary to our own goal – we said we want to reach 100million unbanked around the world. All our efforts, all our resources, everything that we do in Oradian is targeted towards that. So if we, as Oradian, can actually bring in 100 million people into the financial system, that means we will have actually done a reasonable job and have become the part of the goal set by the World Bank.