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Friday, 11 August 2023

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Good morning!

Welcome to the end of the week. For our State of the Ecosystem this week, we chat with Dayo Odulate-Ademola, Managing Director, Nigeria, at the credit company Branch. She dishes on the Nigerian credit industry, ethical means of loan recovery and how government can help.

Meanwhile, Moove, an actual fast-rising company, has raised $76 million in new funding at a $550M valuation. The round includes both equity and debt funding.

Then we have some news of our own. The biggest blockchain event on the continent, Coinference by Technext is back and bigger this year with the theme Disruptive Tech: New Frontiers, New Opportunities.

"Technology can disrupt an already established market by following a set of patterns. Over the past few years, blockchain technology, artificial intelligence, and other new trends have redefined how many Africans work and live," managing editor Tomiwo Ojo said. Read his full take on this year's edition here.

If this newsletter was forwarded to you, click here to subscribe now.

    Below are the tech stories and news you need to know to start your day, carefully curated by Technext.
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    A word from MyCover.ai

    We are thrilled to share that MyCover.ai has successfully raised pre-seed funding of $1.25M! This round was led by Ventures Platform and Founders Factory Africa, with participation from TechStars Toronto.

    With this funding, we can strengthen our operations in Nigeria and strategically fuel our expansion into other African markets. Join us on this exciting journey as we tackle the issue of inadequate insurance access, coverage and affordability in Africa and beyond!

    Sign up at www.mycover.ai or email [email protected] now!
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    Summary of the news

    • Moove has raised $76 million in new funding
    • The CBN said that FX inflows into Nigeria rose to $2.55 billion in two months
    • Safaricom has exited Ethiopia’s Amhara region
    • NITD said that NYSC certificates will now be issued on blockchain technology
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    Ecosystem

    Safaricom
    Safaricom exit Amhara: Following the declaration of a state of emergency in Ethiopia’s Amhara region, telecom company Safaricom has ordered the closure of its sites in the area. The emergency order became necessary as the battle between government troops and Fana rebels continued to heighten.

    The state of emergency is scheduled to run for six months. This implies that it may take a while for Safaricom to restart operations in that area. While it wasn’t stated, customers in that region could experience poor network delivery in the meantime.

    Michael Joseph the Chairman of Safaricom’s Ethiopia commented on the issue. He said, “Today as you know there is a state of emergency and we cannot go to the Amhara region and had to shut our sites down there. All these are challenges that we have to deal with.” (Technext)

    Other ecosystem news:
    • Moove has raised $76 million in new funding at a $550M valuation to help expand its operations and investments in the markets it operates. The company said the new fund included $28 million in equity from both new and existing investors, led by Mubadala Investment Company, $10 million in venture debt from funds and accounts managed by BlackRock, and $38 million in previously undisclosed funds that were raised over the prior twelve months. (Technext)
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    State of the Ecosystem

    In this week's edition of our series State of the Ecosystem, we chat with Dayo Odulate-Ademola, Managing Director, Nigeria, at the credit company Branch. Odulate-Ademola has spent the last decade working in financial services for some of the biggest financial institutions in Nigeria.

    This interview has been edited for clarity and brevity.

    How important is it as a business to recover every single kobo loaned?

    We need to recover every loan, down to the last kobo due to several reasons. It ensures financial sustainability, profitability, and the ability to reinvest for growth. Branch is committed to recovering loans while ensuring that we maintain a reputation for reliability and trust.

    How do you handle unrepaid loans?

    Controlling our default rate is one of our key business priorities. We maintain a healthy default rate that is sub-10% depending on the maturity of the market. It’s also worth noting that nearly 90% of our first-time borrowers repay and take out a secondary loan.

    For customers who delay repayment, we deploy a variety of loan recovery strategies to recoup the funds, while keeping the customers’ interest at heart. If a customer defaults, that customer is reported to the credit bureau for blacklisting and may no longer access loans from other lenders. When they repay, however, the blacklisting is reversed, and their names are cleared from the credit bureau.

    If a customer is unresponsive to all your methods, what happens?

    We hear a lot of stories about these quick loans apps and how they treat defaulters who are not able to repay their loans at the due date but at Branch, one of the things we are steadfast about in our organization is to never treat our customers that way. You'll never hear of Branch contacting friends or family members to report a defaulter. We are very clear on how our customers are treated whether they are owing us or not.

    How can we begin to build a creditworthy society?

    Building a creditworthy society starts with three key pillars: financial education, accessible credit, and responsible lending. By providing comprehensive financial literacy programs, ensuring easy access to credit for underserved populations, and promoting responsible lending practices, we can empower individuals, foster a culture of creditworthiness, and drive economic growth

    Through collaboration with stakeholders, leveraging technology, and working with regulation, we can lay the foundation for a creditworthy society that promotes financial inclusion and unlocks opportunities for all Nigerians.

    What will a world where Nigerians are incentivised to pay their loans look like?

    In a world where Nigerians are incentivized to pay their loans, a culture of responsible borrowing and financial empowerment would flourish. Borrowers would be motivated to fulfill their loan obligations through enticing incentives and personalized rewards programs. Timely repayments and good credit behavior would unlock benefits such as reduced interest rates, increased loan amounts, or more favorable terms.
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    Policy

    NITDA's Kashifu Inuwa Abdullahi
    NITDA's daybreak: The Director-General of the National Information Technology Development Agency (NITDA), Kashifu Inuwa Abdullahi, has announced that the certificate of the National Youth Service Corps of Nigeria will now be issued and certified on blockchain technology.

    And according to the NITDA chief, one of the practical ways to explore the numerous possibilities that blockchain technology offers a developing nation like Nigeria is its deployment in the issuance of certificates.

    “The present administration has a strong interest in blockchain. I believe blockchain, with the ability to add $1.7 trillion to the global GDP, will be a good technology for Nigeria to leverage. And if we position ourselves well based on the BWC report, Nigeria can add about $40 billion to its GDP by 2030. And I believe we can do it. With the people, I see in this room, and the strong interest in the ecosystem and energy, I believe we can do it. We can use it to solve so many problems,” he said. (Technext)

    Other policy news:
    • Nigeria’s internet subscribers grew by 9% in 2022 hitting 154,847,901 subscriptions by the end of 2022, about 12.8 million more than the previous year according to NCC. (Technext)
    • The CBN said that foreign exchange inflows into Nigeria rose to $2.55 billion in two months following the naira unification. According to CBN, the total inflows into the Investors and Exporters (I&E) window increased for the second consecutive month in June to $1.41 billion from $1.14 billion in May. (Nairametrics)
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    Giveaway with Yellowcard

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    Social Tech

    Spotify
    Spotify giveaway: Spotify said Nigerian artists generated over N11 billion in revenue from its platform in 2022. The 2022 streaming revenue was 74% growth year-on-year and even higher than the 64% revenue growth recorded by the entire Nigerian music industry last year.

    The number of Nigerian artists who generated more than 5 million NGN and 10 million naira in royalties from Spotify alone has increased by nearly 25% over the last year.

    “Our commitment at Spotify is to ensure that professional musicians make a living from their work. Releasing the revenues generated by Nigerian artists in 2022 on our platform is our way of keeping ourselves accountable, and keeping true to our mission to enable artists to live off their art.” MD for Sub-Saharan Africa, Jocelyne Muhutu-Remy said. (Nairametrics)

    Other social tech news:
    • X CEO, Linda Yaccarino said that the platform will roll out video calls soon. “Soon you’ll be able to make video chat calls without having to give your phone number to anyone on the platform,” Yaccarino said. (Technext)
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    Global News

    ByteDance
    ByteDance rise: ByteDance might be best known globally as the parent company of TikTok, but the bulk of its money comes from its home base of China, thanks to its Chinese video app Douyin.

    But previously unreported internal data shows that the tech giant’s red-hot pace of growth in China has slowed markedly, underscoring the importance of TikTok for the company’s future.

    Last year, ByteDance’s revenue in China grew 25% year on year to $69 billion, according to three people with knowledge of the company’s detailed financial results. That compared with growth of 68% in 2021, 105% in 2020 and 150% in 2019, according to the people.

    ByteDance still managed to increase its total revenue 38% last year to $85 billion, because its overseas revenue—mainly from TikTok—more than doubled.(Information)

    Other global news:
    • Elon Musk has reportedly decided to part ways with the iconic Twitter bird logo and Twitter-related memorabilia and office equipment through an online auction sale next month. (Technext)
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    Latest in funding

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    Other stories we are following

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    Written by
    Dennis Da-ala Mirilla
    Edited by
    Tomiwo Ojo

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