Nigeria’s Paylater raises $5 million as it begins transition into a full-fledged digital banking institution. And I do think Paylater has to change its name because a bank does not just pay customers. So, the name of a digital bank cannot be Paylater! PiggyVest did just that, after expanding its vision, renaming from Piggybank.
Nigerian retail lending startup, Paylater is working on a plan to transition to a full service digital bank after securing a $5 million debt facility from Nairobi-based Lendable, technology-enabled funding provider to African consumer and small business lenders.
Paylater is looking to deploy new products while transitioning to a digital bank. Since launching in 2016, the Paylater mobile app was downloaded by over 1 million users and disbursed loans of over 13 billion naira ($36 million). But now, the company is looking to get into the unbanked population of Nigeria and provide banking services for them. The startup will be announcing a name change to fit its new business in the first week in April.
I wrote about Paylater here on its promises in the Nigerian financial sector. Across many indicators, this market has many latent opportunities: “Nigeria has a total of about 32 million unique BVN numbers, notes Vanguard. This strongly supports our thesis of 30 million people as the addressable core market.” Simply, things can only get better.
That is why Paylater is exciting. Owned by One Finance & Investments Ltd,Paylater is going after that market where the highest pain points are found in the Nigerian banking sector. We can surely live without shopping through the modern digital payments. But we know that it is challenging when there is an urgent need for funds and no friend or family can help. That is what happens across Nigerian families today. Challenges go beyond how to move money fast across digital channels. Simply, we want credits. Paylater focuses on short-term loans, mainly for emergencies.
Yet, winning the market will go beyond smartphones and apps. Paylater team knows that: “As we are pushing on with our web and digital platforms, we also want to reach out to a segment in the economy that is always talked about but not really catered to,” says Chijoke Dozie, who co-founded OneFi with his brother Ngozi. Of the $301 billion that moves in the consumer domain in Nigeria yearly, 98% are still in cash, notes MasterCard. Simply, growth for emerging financial solutions can only come when there is a fusion of bytes and atoms.