Babatunde Akin Moses is the founder of Sycamore, a P2P lending platform that is committed to creating a more seamless lending process for users by connecting them directly with their peers. In this interview, TechCabal asks Babatunde about their business model as well as Sycamore’s plans for the future.
1. The peer-to-peer (P2P) lending model for fintechs isn’t quite popular in Nigeria. How have operations been so far?
You are right. P2P lending isn’t very popular in Nigeria. What is popular in Nigeria and globally, however, is that people lend to friends and family. In fact, there’s a report by the African Development Bank that shows that 44% of all credit gotten by people in sub-Saharan Africa is from friends and family. So unlike the regular P2P lending model, which typically entails lending and borrowing among people in the open market, Sycamore has narrowed the concept to focus on lending between friends and family, which is already common through our Loan Friends product. We have seen success with this model. Our platform also offers normal loans to those not looking to borrow from friends and family, but our P2P lending model works through Loan Friends, and it has been great so far since it’s adapted to suit an existing problem.
2. What are some things you wish you knew about running this model that you wish you knew before starting out?
It is a model that relies on having much more experienced people, in terms of software engineering and risk management, than we had originally anticipated. Though we have been technology-driven from day one, we initially had to rely on a number of off-the-shelf software tools in the early days. As the business grew, we realised that a lot of tools available simply couldn’t serve the growing needs of our customers, so we had to get in the talent to start building in-house. We are still on the journey, so it’s not like things are perfect. But I’m confident that we have established a world-class team and things can only get better from here.
3. What challenges do you believe are specific to the Nigerian fintech space?
There are several challenges, but one major one we face is the uncertainty of the regulatory environment. Contrary to popular opinion, I think the Nigerian environment has actually been supportive of fintechs to a good extent, and that’s part of why it’s the most thriving startup space in the country. The major challenge is that policies seem to sometimes come up too suddenly, and it seems like there is little coherence among different government bodies. And, of course, like every other sector, we also have to deal with doing business in an environment that needs more supporting infrastructure like power, better roads for logistics, and so on. Until we can eat kilobytes, there are still a good number of offline infrastructures that fintechs rely on to thrive.
4. There are a lot of fintech loan apps available currently. What makes Sycamore different?
Sycamore aims to simplify lending and borrowing in their entirety. We’re not only working on institutional loans: we’ve also gone into the “relationship lending” space with our product, Loan Friends. With Loan Friends, we are creating a seamless process of lending and borrowing between friends and family. In fact, we recently expanded it with a PayForMe feature, which allows you send a request to a friend to sort out a bill on your behalf while you pay them later. This might sound unreal, but I believe we have one of the most dynamic and versatile lending apps on the continent, when you look at the number of things Sycamore enables one to do, in terms of lending and borrowing.
5. What should we expect from Sycamore in the next five years?
Global reach! We have major plans in place for Sycamore to be a global brand within the next five years, and we look forward to this becoming a reality even as we implement and work towards it.
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