Edoka Idoko, founder and CEO of OjirehPrime, a customer-focused digital bank in Nigeria that offers free credit cards, savings, and access to loans with the best interest rates, typifies the Nigerian spirit in this tell-all interview. He recently sat down to share his story with BusinessDay’s Technology and Media editor, Frank Eleanya, on his journey to building a fintech that is on the verge of closing a $21 million funding.
You have a unique story about starting OjirehPrime. Can you tell us about that?
Let me walk you back to pre-2016. I had played actively in the commodities market selling rice. I had a good experience of that market interplaying between the importer and the retail and sometimes connecting retailers. I looked at the space and thought there was a need to use technology to disrupt that space. There wasn’t funding. I moved to Lagos in 2016. My experience then in commodities had a lot more to do with talking to this importer, going out there to look for the buyer, convincing the buyer, connecting both of them, and making a margin off the transaction. But in 2016, I moved to Lagos and felt I needed to do something better, particularly leveraging technology to bring automation to the process. There was no funding or laptop.
I was squatting with someone. I had this Samsung tablet that a battery last only 40 minutes no matter how long you charge it. That was how we started. We got someone to help us build the site in terms of basic knowledge. He taught me through a two-week process.
We used that faulty tablet to build the site. Every time you have to connect the faulty tab to the light, lift the product online, clean the product out, and upload it from the backend. So it was more of an e-commerce site called Ojireh.com and we were focused on groceries. We took off from that foundation.
By 2017 we were already one year in business. Within 12 months we were able to build 54 customers (just individuals) that shop from us regularly. By regularly, I mean once a month.
After one year, we wanted to send them a mail to appreciate them for sticking with us. That was the only tool we had to retain customers – raising our game constantly on customer experience. If we had the funds, maybe we would have done a bit of marketing.
But we knew that the only we could retain them is by creating the best experience for them and through word of mouth we can scale from there.
At the point of sending out this mail, I was looking through our data at the backend and I noticed that 96 percent of payments came via bank transfers meanwhile we had integrated a payment gateway into the site.
God was so kind every one of the customers got our mail and responded telling us that they cannot expose their card details because of fear of cyber fraud. We did not know that the response was the beginning of a new phase. Because it was a case of the customer pointing us in the right direction. We felt that we needed to respond to this because this is the customer identifying the problem that you needed to provide a solution for.
In the course of thinking through this was when we came up with the prepaid card, thanks to brands like Interswitch Verve card, which gave us a lot of support during that period. We got this reloadable prepaid card out.
Our dream was to get 100 cards out, give 54 cards free to existing customers, and then use the remaining as a customer acquisition strategy. But at the point of the launch of this card, which was Social Media Week in 2018, we noticed the interest in this card moved up. The adoption of this card started ramping up.
Between then and the close of 2019 we already had about 40,000 cards in circulation and this number of cards in circulation were from customers that did not care about our e-commerce site. We thought we wanted to use this to drive e-commerce, but they got it for something else.
We took that 2 years to interrogate what is happening, we now realised that this product meant different things to different people.
Such as?
For some, it was budgetary control, for others it was utility cards, for others it was savings.
They used it for different purposes and they were largely young persons and not the older ones. We found a lot of students using the cards to keep their money in their accounts; put something they want to spend for the week and ensure they do not go beyond.
We found people saying that they refused to collect a card from their bank because it was connected to their accounts they didn’t want to spend. However, if they take our cards, at the beginning of the week, they would put exactly what they need for the week.
They do not have a bank card, hence they are holding themselves accountable to ensure that they stick to the money for the week. They will repeat the same process next week. They now have to go to their banks once a week. When the numbers started ramping up, we took the whole of 2019 to understand what we were building.
We knew we were in the fintech space but we didn’t know which part of fintech; is payment, banking, or mobile money. We were trying to get streamlined carefully but in early 2019 it was very obvious to us that we were playing in two different industries so we separated both companies.
The ecommerce went its way and the fintech got birthed as OjirehPrime Financial Services. That is how we hit the ground. Immediately after this happened, the whole of 2019 was more about understanding the customers. We had nothing to lose.
If you recall this journey from 2017 to late 2018 we did not know what we were building because there were no digital banks. There was no local example.
We kept asking ourselves, what exactly are we building? But we knew it had to deal with cards. Exposure has a way of opening your eyes we came across Amazing Digital Bank in the UK. their story looked like our story. They started with prepaid cards scaled their customer base, build their user base, and got a banking licence. So we could see our story in the face of every leading digital bank from the US to the UK. That was when we started fine-tuning what we were building to move in this direction.
Something interesting happened in 2020. We stepped into the banking space properly via an investment in Solid Alliance Microfinance Bank. It was more like an acquisition. That gave us some strong insight into the space. There was now that strong collaboration with OjirehPrime as an entity and Solid Alliance Microfinance Bank. They had the strength of a licenced microfinance bank that has been operational for 7 to 8 years.
It was purely traditional with little or zero investment in technology. OjirehPrime was big on tech. It was the perfect match. That significantly opened the door to a new phase of growth for OjirehPrime and Solid Alliance. This was the time of COVID, there was a lockdown and banks were not open. The banks were under their share of pressure in the sense that scaling was difficult.
Even in post-COVID scaling was difficult because to reach out to a customer you need that marketer that has to move around. They were restricted to how far a marketer can go. But technology has a way of giving you this wide reach that you can touch different parts of your geography.
We literarily spent the whole of 2021 building our technology and while we are doing this, ensure we got the beta version of the app. In the first quarter of 2022, we got it out and by the close of the year, we had surpassed 850,000 downloads across the Play Store and iOS.
This literarily pointed us in a very significant direction in terms of allowing us to prove our concept, it fortified our story because at OjirehPrime we believe that we are the clear definition of that Nigerian or African story.
Our story isn’t that of some guys that had access to a network that gave them funding or an uncle, aunty, or from a wealthy background. It is a clear story of blood and sweat.
One of my fond memories was in 2017 into 2018, while we were at the peak of trying to fine-tune our product, for four-five months I was sleeping outside. I was sleeping on the road. If you know Admiralty Way, I think there is a club there. I took advantage of the fact that was a busy environment.
I will finish work, I am in my suit and my tie looking all corporate, in the night time, I go to the location opposite road. I pull my suit inside out and wear my trouser inside out, put my bag and my laptop under a tree and I will sleep off.
Why did you do that?
I didn’t have a place to stay. I was homeless. For the little fund that was coming in; I had to choose between myself or OjirehPrime, if I took those funds and put it on myself then the company goes down straight.
It was a clear case of, there was no middle ground. You had to clearly define what you want. So my schedule was pretty straightforward, I find where to sleep. There was this uncompleted building at Jakande, I noticed that most of the agberos sleep there.
I just walk in there to sleep. At 4 am, I am in the public bathroom at Ajah Market. I will shower and wear my clothes. I had this brown laptop bag I moved all my clothes to a dry cleaner at Thomas Estate, Ajah explained my situation to him and told him that every day I will find a way to come and pick up the clothes that I wear the next day. I will wear a suit for two days but I will take two shirts.
The shirts are looking very clean and they cover every other thing. In that same bag, I had my toothpaste and toothbrush. I find anywhere to sleep.
Before that 4 am I am in a public bathroom to take a shower, dress up, and find my way back to a coffee shop I was using at Lekki. I had explained to the bartenders there that I will try my best to buy at least a cup of coffee each day, but the day I can’t afford to buy, they should please allow me to work from there.
We started in a shared office with a friend, but he moved out we couldn’t retain the rent, we were thrown out and moved to another serviced office at Igbo-Efon. After 2 months we couldn’t pay again. We were denied access. It was that phase that I knew that if you do not do something crazy now this is the end. I had to think of something. This was when I found myself at the coffee shop in Lekki. When they open their shop, I will go to their convenience and brush my teeth, wash my face, and brush my hair. I will set up my laptop.
Inside the coffee office, I was able to get one more staff. We kept pushing the business, and small droplets of revenue started coming in. We decided to go back to a serviced office. At the serviced office, the staff strength increased to three. We still could not afford accommodation because we were still struggling with salaries.
Yes, my family is in Abuja. Why I didn’t say anything to anybody then was because I understood that growth has a price. You have to be conscious to know that this is not your suffering. This is you paying the price. If you let people know they will approach you with sympathy and that will take you off your track.
The breaking point for us was the move into that acquisition. It was when we made our move into making a fresh line of funds which was a convertible debt. God was so kind some people looked at what we were doing and felt we were passionate and were willing to bet their resources. That was how we got funds in that period. The acquisition pulled through and we launched a mobile app.
How many customers came with the acquisition?
The bank had 40,000. We scaled that same year in terms of number of users. By 2022, we moved our headquarters to the UK with a bit of support from the UK government. That became effective in January this year because I had to take time to put things in place.
Why did you take the headquarters to the UK?
Global positioning is number one. If you look at our vision, we believe that we are building a global banking service for African Gen Zs. To do this effectively, truth be told we need a platform.
It doesn’t matter how fantastic your idea is, you just need the platform to achieve that goal. For us, it is beyond building for Nigeria. It is positioning ourselves for the future.
This decision is informed by certain data at the backend. Data tells us that Africa will account for 25 percent of the global population by the year 2050. That is 27 years from now.
We believe there is a need to position ourselves now. I will always tell my staff that if they think 27 years is very far, just blink their eyes. By that same time, Nigeria would account for 10 percent of the global population. I see a future where, first, Nigeria plays a strategic role in terms of the market. Secondly, I see a future where not just Nigeria plays a strategic role, Africa is the future.
Third, the Western world needs a bridge. We feel strategically positioning ourselves ahead of them. Even when you look at the median age range in Africa today, it speaks to this that this is the direction that we are going. We believe that the new generation of people that would shape the global banking industry is what is being raised now.
We are not looking at ourselves as people building products, we view ourselves from the standpoint of positioning that it is not about today, it is about tomorrow. We will win tomorrow. I believe that the digital banking market in Nigeria has not been established yet. Competition has not been established. We are still in the building phase.
Read also: CEO who slept on Lagos streets set to complete $21m funding
Why do you think that competition has not been established?
If you look at history it suggests that every time a generation begins to ask questions on how to do things differently it births innovations. We are privileged to find ourselves in a generation that has started questioning how we want to interact.
We didn’t want to keep sending messages through PoS or using typewriters. Those questions birthed social media. It altered the way we interact. Birthed Twitter, Instagram, Facebook, and Snapchat, among others. So the way we relate is different from how our parents interacted. This generation is questioning how we want to work. There are a lot of questions they have that have birthed different innovations like how we want to bank.
You are seeing how we are leveraging technology to alter products. This is our thesis that forms the foundation of how we operate.
You will agree with me that digital banking is in its early phase. That is why you will not find one that is ten years. We are still young. When innovation is birthed there is room for competition.
When competition is established customer experience will win. For example, seven years ago the selling point for several mobile automobile industries like General Motors is this product will move you faster than horses. That is not the selling point today. This is because the question was asked.
We believe that if you put human interaction into a critical touch point it will define competition in the future. People want to hear somebody talk to you. Imagine how restless you feel to get past that part where a robot is speaking to you any time you call your network. As much as we say we are doing digital banking and are trying to automate the process we still want to hear a human speak to us.
This is why we came up with relationship managers whose responsibility is to speak to customers. If you talk to a customer on an average of 2 minutes in a day you are engaging with about 100 customers in a day. We tried this at a micro-level for about three months with just about 10 people.
Now we are scaling that to a 70-man team because we have tasted and seen that it works. The effect of word of mouth is stronger than digital marketing. What happens if we scale the team to 200, we could reach 12,000 customers a day. If we do a good job of that the potential effect is 120,000 customers. We believe that investment in technology in itself is not a competitive advantage there has to be a human element to make it work.
How do you maintain that energy when the number of customers becomes too large? Do you not see complacency setting in, like the banks?
I will say every company understands how it would grow. For us, we believe that we are product-led. This means that this is the model for growth for us. And if this is the model for growth for us, how do we take the customer through a journey of acquisition?
Onboarding, retainership, and converting that customer now to an ambassador? We are also thinking of how we are going to build products that simulate this same experience, leveraging the power of technology and at the same interplay of human interference in it.
Yes, we want to be in the middle of the communication flow with customers but at the same, we also want to deliver products that are so well-built that you might not need us. For us it is the more we grow the more we fine-tune our products that we get you to the point where you realise that you do not need us. Think of it as nurturing a customer from a journey of customer tools to the mouthpiece.
I tell the marketing team to think of themselves as recruiters. They are not just paid to work, they also have to recruit customers to work. So they have to work the customer through a process that they can work. We are obsessed with building a community-style product. It is the customers that speak on our behalf. If it is left to us, there is a limit to what we can stretch.
