Financial inclusion can help Nigeria reduce poverty rate, sustain leadership in Africa, says Tom X Credit boss
Nigeria is still on the process of achieving up to 80% target of financial inclusion as set in 2019 as about 40% of Nigerian adults remain financially excluded. In this interview, Tomilayo Akano, the CEO and founder of Tom X Credit, a startup focused on using technology to get Nigeria’s unbanked population banked speaks more on the ecosystem. Excerpts. Daniel Obi reports
With Nigeria’s inability to achieve its set target of banking over 70 percent of its population, what could be your reason to focus on financial inclusion?
I had my first work experience at one of the leading banks in Africa. It was during my time at the Global transaction banking unit of the bank that I identified and started using certain tools that gave me the idea to establish a credit business called Starlite Credit. I started the company because, while working at the bank, I realized how difficult it was for small and medium-sized businesses to get financing for their business as the requirements were too outrageous for small business owners to meet. Starlite credit helped businesses grow their business and operations. With an examination of the market size and opportunities inherent, we then decided to scale up operations, leveraging both traditional means and technology to assist a lot of other businesses and even salary earners grow in capacity through financing. As demands increased in 2019-2020, the Tom X Credit brand came to life.
After a year as a value chain product expert, I decided to leave the bank and work full time on taking these small businesses and those outside the circle of the organized and established financial sector to greater heights with Tom X credit.
So to answer your question, as much as there are opportunities in making financial inclusion a reality, the only way Nigeria can reclaim its leadership position in Africa is by reducing its poverty rate, and this can be achieved by having the majority of its population financially active and included.
What role is Tom X credit playing towards boosting financial inclusion, and what are the untapped opportunities you think Nigerians are overlooking?
Nigeria’s population is currently estimated to be slightly above 200 million, yet 62 percent of the population live below the poverty line with a further 36 percent of the population being totally excluded financially. This statistic shows how massive the untapped opportunities inherent in the nation are.
At Tom X credit, our main objective is to make the world a better place, by creating jobs and making financial inclusion a reality. By staying true to this objective of ours, we provide credit facilities to these low-income earners and businesses to help scale up their growth and flatten the poverty curve. We offer loan services, payment services, and saving services. We have become experts in providing financial services as we maintain an NPL of less than 2% for our loan product, and we have disbursed to the tune of N300 million within a year. To us, access to financial services should be everyone’s right and not just a privilege.
We are not trying to build just a payment system. We’ve made it a lifelong mission to design products and solutions that solve every financial problem from the beginning to the end for the unbanked and those struggling to find their feet in the ambiguous financial scene.
Going by the numbers, how is Tom X Credit currently faring?
The company has done over 2,000% in revenue within a year, with an estimated $150,000 in revenue EOY 2021. Our clients have increased from 100 to over 2500 in one year. We launched a product we called TOM X save in March 2021; the purpose of the product is to encourage people without bank accounts e.g the market women and unlearned people to save per day, in a way paying themselves salaries at the end of the period (30 days cycle and they earn appropriate interest on their savings).
Within the first month of launching our TOM X save product, we helped the unbanked save up to 5 million naira, and today we are on 12 million naira per month, witnessing a strong and unstoppable month on month growth.
What do you think are the major factors retarding the quest to expand financial services access to the unbanked population?
Asides the wave of instabilities in our policies, I believe the challenge that takes the bulk of the blame is funding. Tom X is currently funded internally, and we hope to get positioned for the injection of more capital that would enable us to reach even more of this identified market segment.
With Tom X credit and your quest for financial inclusion and banking the unbanked, what next?
The company is presently looking at the activation of our next band of investments to help us build a more robust system, scale up and advance our technology, and also meet the required minimum capital requirements for more regulated licenses e.g PPSP, MFB, etc, that would help us see no limit to our growth into the Nigerian and African market. This will help us easily improve on our technical standpoints, technical capabilities and make our processes simpler than they already are.