Friday,19 July 2024

African Fintech Network's Agbo-Madaki: "We provide developers a platform to showcase what they have"

5 min read

Interviewed By The Asian Banker Live

Andrew Agbo-Madaki, chairman of the African Fintech Network and chief executive officer of Decy-4 Technologies, shares his opinion on the recent movement of financial technology in Africa, the network's plans, and how his own start-up helps organisations develop their own payment solutions.

Here is the transcript:

  • The African Fintech Network connects start-ups and developers with the financial industry and the government sector
  • Agbo-Madaki believes interest in funding fintech and start-ups in Nigeria is growing
  • Regulation is still the biggest issue among financial technology start-ups in the African region

Emmanuel Daniel (ED): I’m very pleased to be able to speak with Andrew Madaki here in Lagos. He is the chairman of the African Fintech Network and also an entrepreneur and fintech owner yourself. Tell me a little bit about the fintech movement in Africa. How many members do you have in your association? How many such associations are there? And what are some of the parameters of your association; what are you working on?

Connecting start-ups with the financial industry

Andrew Madaki (AM): Okay. So the African Fintech Network is barely a year old, but so far we have about 500 members. The goal is to connect the dots between the start-ups to the developers to the financial industry and the government sector. What we planned to do and plan to do is to get the regulators to understand from the part of the start-ups, from the innovators, and for the innovators and start-ups to also understand what’s happening in the financial sector, so that way we are not creating square pegs in round holes.

So what we do have, we have quite a vast spread of majorities within the financial sector from the bank, but what we have also brought to the table is the developer. So software developers, the techies as well. They can come in and contribute to it. The end-goal is to be able to shift policy and regulation to fit with the current trend which is going on in the world, as opposed to just having policies created.

ED: So your membership is individual or companies?

AM: So we have company membership, and we also have individual.

ED: Okay. And of the 500 members, what is the concentration? Is it payment? Is it data? Is security? Is it…

AM: So about 70% of what we have is payments, then another 5% in data, and the remaining 25% in technology.

ED: Okay. And how many of these are bank-owned? Or are they not really bank-owned?

AM: Coincidentally, most of them are not bank-owned. So they are just start-ups by innovators, people who have left maybe the banking sector. What we’ve found out is that, mostly, the banks would rather create their own software and solutions, than collaborate and use the new ones coming out in the markets.

ED: Right. What are some of the big things that you’re working on? You are Pan-African. So how many countries are represented in your –

AM: So currently we have – and interestingly, we even have outside Africa. So currently we have Ghana, we have Kenya, and we also have Israel, because we initially started the support from an Israeli organisation. So we have Nigeria, Ghana, and Kenya, and the next step is South Africa as well.

ED: Right. So if South Africa isn’t a major membership member in a programme like this, is that a big deal? Are there lots of things happening in South Africa?

AM: So ideally, over the last ten years, South Africa was an ICT hub in Africa; but it shifted to Kenya. So you have the best opportunity to train with Kenya, Nigeria, and Ghana than South Africa because South Africa is more condensed and they are a little bit ahead of the rest of Africa when it comes to technology. So there’s a bit of exclusion when it comes to South Africa and technology.

ED: Okay. In terms of investors, how many of your members are investors and what is the interaction with the investor community like?

AM: So we’ve had in the last one year a lot of investors come in, but most of them would rather play an observatory role to find out what’s going on in sectors, find out businesses which they could invest in, as opposed to having a full participatory role. So we’ve had a lot of interest in the last one year. We’ve had a lot of big companies fund fintech and start-ups in payments in Nigeria. So it’s a growing process, but the interest has been really high.

Impact of regulations

ED: Okay. But what about some of the issues that you’re dealing with? What are your members talking about most of all?

AM: The biggest issue really is regulation. Most of the regulations have big financial implications to it. So say you want to do remittance, you may need as much as $280,000 (NGN100 million). How many start-ups can provide $280,000 (NGN100 million)? So what it does is it gives the bigger financial institutions an upper hand against the start-ups. So, the biggest problem really is regulation.

ED: Right. Regulation because of the cost and because of the capital cost or something like that that they’re seeing today?

AM: One, because of the cost; and secondly, because in most cases you have bureaucrats creating regulations for technocrats. And so that’s where you have a disconnect.

ED: Right. What about the relationship with banks; how is that evolving?

AM: The relationship with banks, thanks to people like The Asian Banker. It has stated a meeting point where you have people from across the table coming together. And so banks, like First Bank, have spoken about interest in acquiring some of this innovation as start-ups, and collaboration has been a major theme this year. And so it’s gradual, but it’s ongoing. We also have the government doing a lot of innovation competitions to see what can happen. The president as of that demo day last year where they picked ten start-ups out of so many, I picked three, to work with.

ED: Right. Okay, good. Thank you very much. And what about your own start-up; what are you working on?

AM: So what my start-up, has is I run in the information sector e-payments called Decy-4 Technologies. But we’ve started is a start-up called “Dev-4 for Rent”. So we have developers where you could rent them to come work on a solution or come work in your organisation for one month, a contract. Nobody really has the finances to get developers full-time because in most cases they may be working on other projects. So what we do is we pretty much rent them to you, do your work, and leave.

ED: Okay.

AM: And so that’s what we’ve been doing. We’ve been able to do three payment solutions for different organisations, as well as other software on Android, iOS platforms.

ED:  Where do you find a lot of good programming talent in Africa, whether it’s iOS or whether it’s security; where are the line coders like mostly to be found?

AM: Everywhere. Everywhere. The problem is we don’t have a Silicon Valley where everybody heads there. So lately we’ve had Lagos where everybody’s coming together. If you go to Abuja, you go to Kaduna, you go to… and Lagos, you find developers scattered around, which is what we are doing, bringing them together to create a platform for them to showcase what they have. I’ll show you for whatever development work you need, you can find that talent here in Nigeria.

ED: Okay, good, Andrew. Thank you very much, and all the best.

AM: My pleasure.

ED: And the fintech evolution, is funding an issue with some of your members?

AM: Funding is always an issue. Funding is always an issue, so investors are always welcome.

ED: What is the profile of investors? How many of them are institutional or are they just wealthy people?

AM: Lots of them are institutional. Lately, we now have – there’s an African Angels Network. I think there’s also the Nigerian Angels Network, which has just started. So you have individuals come together to create groups to invest in the products…

ED: Okay, good. Thank you very much, Andrew.

AM: Thank you.

Categories: Financial Institutions, Financial Technology, Technology & Operations
Keywords: Fintech
Institutions: African Fintech Network, Decy-4 Technologies
People : Andrew Agbo-Madaki, Emmanuel Daniel
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