TechCabal Daily – The MainOne

HOW FINTECH INNOVATORS AND REGULATORS CAN WORK TOGETHER

Innovation in Nigeria’s fintech space has grown rapidly over the past few years, with at least three unicorn startups produced within this period. 

Much of this growth has happened without direct government involvement. However, there have been attempts—some successful—to create regulations guiding these fintech giants. 

But combining the rigidity of traditional financial regulation with the flexibility needed for tech-driven solutions is often a challenge. 

The fact that entrepreneurial innovation is usually steps ahead of regulations and policies play catch-up most times cause friction between startups and government officials.

Despite the fractious relationship, regulators and innovators share similar goals, and thus, there’s a natural common ground between both parties. With Africa’s rapidly growing fintech industry poised to play an even greater role in the financial services sector and record further growth, this potential necessitates cooperation between fintechs and regulators, going forward. 

That’s according to stakeholders that spoke during TechCabal’s recent event, “The Fintech Series: Regulation and Innovation – Finding common ground”.

Read a recap article of the event here OR Watch the full video on how Africa’s fintech innovators and regulators can work together on our YouTube channel.

MAINONE GEARS UP FOR A $320 MILLION ACQUISITION

MainOne, a West African data centre and connectivity solutions provider, with a presence in Nigeria, Ghana, and Côte d’Ivoire, is set to be acquired for $320 million by American multinational Equinix Inc.

The all-cash deal is expected to close in the first quarter of next year, subject to the satisfaction of customary closing conditions, including the requisite regulatory approvals.

Backstory: Founded by Funke Opeke in 2010, MainOne is a key provider of enterprise connectivity solutions, with an estimated 800+ business-to-business customers. These include major international technology enterprises, social media companies, global telecom operators, financial service companies, and cloud service providers.

The company owns and operates an extensive submarine network extending 7,000 kilometers from Portugal to Lagos, Accra, and along the West African coast, with landing stations in Nigeria, Ghana, and Côte d’Ivoire. These provide connectivity to and from Europe, West African countries, and the major business communities in Nigeria. 

MainOne also owns digital infrastructure assets that include three operational data centres, with an additional facility under construction expected to open in Q1 2022. These are in addition to key internet exchanges enabling low latency to key global networks, including Amazon, Microsoft, Apple, Google, and Facebook. 

What Equinix is planning

For Equinix, a global specialist in data centres and internet connectivity, the deal marks the first step in a long-term strategy to become a leading provider of digital infrastructure in Africa. 

Equinix believes MainOne to be one of the most exciting technology businesses to emerge from Africa, making the acquisition a pivotal entry point for the US company into the continent.

Read more about the deal in Funke Opeke’s MainOne set to be acquired for $320m by US giant Equinix.

IMPROVING FINANCIAL WELL-BEING FOR SALARIED WORKERS

In Nigeria, wages for formal-sector employees are paid monthly; in the informal sector, however, this is paid daily. Now, when salaried employees go broke between paydays, they have three options: borrow, take a loan, or request a salary advance. But loans, most times, come with exploitative interest rates and salary advance schemes could plunge an employee deeper into debt. 

But certain startups want to change that story. 

Earnipay, a fintech solution, founded by Nonso Onwuzulike, is one. The startup gives employees flexible access to their accrued salaries on any day of the month.

The payday cycle

In 2019, Onwuzulike started a recycling company in Accra, Ghana, to reduce plastic waste and enable plastic recycling in the capital city. While running the business, he hired waste collectors and placed them on a monthly payment schedule. However, these employees—all of them coming from informal-sector backgrounds—were unhappy about this. They were used to being paid after a job was completed, or at the end of the workday. The monthly payment cycle left them cash-strapped and unable to match their daily expenses to their income. Consequently, once salaries were paid at the end of the month, many of the workers quit the company in search of other employment.

Eager to stem the high attrition rate among the waste collection staff, the company switched from a monthly payment schedule to a flexible one, allowing the workers to be paid more frequently—weekly or bi-weekly. The change increased their productivity and fewer workers jumped ship. 

It was a light-bulb moment for Onwuzulike. He went on to survey 100 formal employees within his network to find out how often they ran out of cash before payday and what their employers did to alleviate their financial difficulties. 

Onwuzulike’s original intention for Earnipay was to build a salary advance solution—in keeping with similar solutions already in existence in Nigeria, some of them powered by traditional banks. But plans changed when the results of the 100-person survey showed that 90% of salaried employees would rather have flexible access to their accrued salaries. 

Kelechi Njoku has more in Earnipay is improving financial well-being for salaried employees.

MICRO SAVINGS, MICROVEST

The reality is that while everyone’s reason for saving might vary, there’s a common goal, which is financial discipline. 

Without a solid plan, it’s harder to save money or cover important purchases and capital projects. This is where savings and investment platforms like Microvest come in.

Following the launch of its savings and investment mobile app, Microvest is helping users to clearly define their vision of financial growth. According to Robert K. Okiyi, Microvest Chief Operating Officer (COO), the goal of Microvest and its existence is to provide to the public an alternative and credible platform for them to save and grow their funds.

For Mi and you

Microvest offers products that are tailored to meet the specific needs of users. For instance, its saving options come in three variants: MiSafe, MiTarget and MiLock.

MiSafe is the most flexible savings plan where users can fund their wallets and create a plan with as little as ₦1,000 ($2). It allows withdrawals anytime and also gives users the opportunity to transfer funds to any bank account. MiSafe has an interest rate of 10.5% p.a.

There’s more in How Microvest is building a financially disciplined community.

OPPORTUNITIES

• Applications are now open for the first all-female cohort of eHealth Africa Academy. The free 10-week software development training programme seeks to groom tech talents in Nigeria. Selected participants will get basic web development skills in HTML, CSS, and Javascript. Check it out.

• The MEST Express Acceleration Ghana Programme 2022 is now open for applications. Early-stage Ghanaian startups with $100,000 or less in funding can apply to get equity-free funding, mentorship, and network access. Learn more.

• The Udacity/Access Bank Advance Africa Scholarship Programme is open giving 2,000 nanodegree programme scholarships to Africans interested in building practical, in-demand tech skills like Business Analytics, Intro to Programming and Digital Marketing. Find out more.