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By 2030, Embedded Finance Market is projected to reach $7 Trillion

By
Paul Ugbede Godwin
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0

The future of finance is embedded. This means that financial services are seamlessly integrated into other platforms, such as E-commerce, social media, or Mobility. Embedded finance enables customers to access banking, payments, lending, insurance, and investing without leaving their preferred apps or websites. This creates a more convenient, personalized, and engaging customer experience, while also reducing costs and increasing revenues for the providers.

According to a report by Lightyear Capital, the embedded finance market is expected to grow exponentially in the next decade, reaching a whopping $7 trillion in value by 2030. This would surpass the combined market capitalization of fintech startups, major global banks, and insurance companies. The report identifies four key drivers of this growth: technology innovation, customer demand, regulatory support, and competitive pressure.

Technology innovation refers to the development of new technologies and platforms that enable embedded finance, such as cloud computing, APIs, artificial intelligence, blockchain, and biometrics. These technologies lower the barriers to entry and facilitate interoperability and scalability for embedded finance providers.

Customer demand refers to the changing preferences and expectations of customers, especially millennials and Gen Z, who are more tech-savvy, mobile-first, and value-driven. These customers want more convenience, choice, personalization, and social impact from their financial services. They are also more willing to trust and use non-traditional providers, such as big techs, retailers, or telcos.

Regulatory support refers to the favorable policies and frameworks that encourage innovation and competition in the financial sector. Examples include open banking, which allows customers to share their financial data and access third-party services; sandbox programs, which allow fintechs to test their products and services in a controlled environment; and digital identity schemes, which enable secure and seamless verification of customers.

Competitive pressure refers to the increasing rivalry among existing and new players in the financial industry. Embedded finance creates new opportunities for non-financial players to offer financial services and capture a larger share of the customer wallet. At the same time, it also challenges traditional financial institutions to innovate and adapt to changing customer needs and preferences.

Embedded finance allows customers to access financial services anytime, anywhere, and on any device. Customers do not need to switch between different apps or websites, or visit physical branches or offices. They can complete their financial transactions within their preferred platforms, such as shopping online, booking a ride, or chatting with friends.

Embedded finance enables providers to offer tailored and customized financial solutions that suit the specific needs and preferences of each customer. Providers can leverage data and analytics to understand customer behavior, preferences, and needs, and offer relevant and timely financial products and services. They can also offer personalized recommendations, incentives, rewards, and loyalty programs.

Embedded finance creates more opportunities for customer interaction and engagement. Providers can offer more value-added services and features that enhance the customer experience and satisfaction. They can also create more touchpoints and feedback loops with customers and build long-term relationships and trust.

Embedded finance reduces the operational costs and inefficiencies of traditional financial services. Providers can leverage existing platforms and infrastructure and avoid the costs of building and maintaining their own systems. They can also benefit from economies of scale and network effects. Embedded finance also creates new sources of revenue and profit for providers. They can monetize their customer data and insights, cross-sell and upsell their financial products and services, and charge fees or commissions for their embedded finance offerings.

The embedded finance revolution is already underway. Examples of successful embedded finance providers include Shopify, which offers e-commerce merchants a range of financial solutions such as payments, lending, banking, and investing; Grab, which offers ride-hailing customers and drivers access to payments, insurance, wealth management, and lending; and Amazon, which offers online shoppers and sellers various financial services such as payments, credit cards, loans, insurance, and savings.

However, embedded finance also comes with some risks and challenges that need to be addressed. These include; Data privacy and security: Embedded finance involves sharing sensitive customer data across multiple platforms and providers. This raises concerns about data protection, consent, ownership, and liability. Customers need to be aware of how their data is used and stored, and providers need to ensure compliance with data privacy regulations and best practices.

Cybersecurity and fraud: Embedded finance increases the exposure and vulnerability of financial transactions to cyberattacks and fraud. Providers need to invest in robust cybersecurity measures and systems to prevent and detect unauthorized access, data breaches, identity theft, phishing, malware, and other threats.

Regulatory uncertainty and complexity: Embedded finance operates in a dynamic and evolving regulatory environment that varies across jurisdictions and sectors. Providers need to navigate the complex and sometimes conflicting rules and regulations that apply to their embedded finance offerings. They also need to monitor and adapt to the changing regulatory landscape and expectations of regulators and customers.

Customer trust and loyalty: Embedded finance creates new opportunities for customer acquisition and retention, but also new challenges for customer satisfaction and loyalty. Providers need to deliver consistent, reliable, and high-quality financial services that meet or exceed customer expectations. They also need to build trust and credibility with customers who may not be familiar with their financial capabilities or reputation.

Embedded finance is not a trend or a niche; it is the future of finance. But it is not without risks and challenges that need to be managed and mitigated. The implications of embedded finance are profound and far-reaching. It will transform the way customers interact with financial services, create new business models and revenue streams for providers, and reshape the competitive landscape of the financial industry.

Amazon’s New York City Airbnb ban and resetting from WFH to In-office Work Operations

By
Paul Ugbede Godwin
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0

Amazon will stop promoting Airbnb listings in New York City, following a recent ban on short-term rentals by the city council. The decision affects thousands of hosts who rely on Airbnb as a source of income and millions of travelers who use the platform to find affordable and convenient accommodation.

The ban, which was passed in July, prohibits renting out entire apartments for less than 30 days unless the host is present. The city council claims that the ban is necessary to protect the housing supply and prevent illegal hotels from operating in residential areas. However, Airbnb argues that the ban is unfair and violates the rights of hosts and guests.

Amazon, which has a partnership with Airbnb to offer discounts and rewards to its Prime members, said that it respects the local laws and regulations of each market where it operates. The company said that it will continue to work with Airbnb to find ways to support its hosts and guests in New York City, but it will not promote any listings that violate the ban.

New York City prohibits renting out entire apartments for less than 30 days unless the host is present.

If you are planning to visit New York City and stay in an Airbnb, you should be aware of the legal restrictions that apply to short-term rentals. According to the New York State Multiple Dwelling Law, it is illegal to rent out an entire apartment for less than 30 days unless the host is also staying there during the rental period. This law is intended to prevent the conversion of residential units into illegal hotels and to protect the rights and safety of tenants and neighbors.

The law does not affect rentals of individual rooms or shared spaces, as long as the host is present and there are no more than two guests at a time. It also does not apply to rentals of single-family homes, townhouses, or condos, as long as they are not subject to other rules or regulations that prohibit short-term rentals. However, renters should always check with their landlords or homeowner’s associations before listing their properties on Airbnb or other platforms, as they may face fines or eviction for violating their lease or bylaws.

Airbnb hosts who violate the law may face penalties ranging from $1,000 to $7,500 per illegal rental, depending on the number of violations. The New York City Office of Special Enforcement is responsible for enforcing the law and conducting inspections and investigations of suspected illegal rentals. Airbnb also cooperates with the city authorities and removes listings that do not comply with the law.

If you are looking for a legal and affordable way to experience New York City, you may want to consider other options besides renting an entire apartment on Airbnb. You can still find many listings of private rooms or shared spaces that offer comfort and convenience at a lower cost. You can also explore other types of accommodations, such as hotels, hostels, bed and breakfasts, or couch surfing. Whatever you choose, make sure you do your research and follow the rules to avoid any trouble and enjoy your stay in the Big Apple.

The move by Amazon is a blow to Airbnb, which has been facing increasing pressure from regulators and competitors in various markets. The company, which is planning to go public next year, has been trying to improve its image and reputation by introducing new safety measures, verification processes, and community standards. However, it still faces legal challenges and opposition from hotel groups, housing advocates, and some local residents.

Amazon is blocking the promotion of employees who don’t comply with the company’s return-to-office policy

The company claims that this policy is necessary to maintain its culture of innovation and collaboration, but many workers are unhappy with the decision. Amazon has been one of the most successful companies during the pandemic, thanks to its online retail and cloud computing businesses.

However, it has also faced criticism for its treatment of warehouse workers, who have reported unsafe working conditions and lack of adequate protection from the virus. Now, the company is facing backlash from its corporate employees, who have enjoyed the flexibility and convenience of working from home.

According to an internal memo obtained by The Wall Street Journal, Amazon’s senior vice president of global corporate affairs, Jay Carney, wrote that “employees who choose not to return to the office will not be eligible for promotions or salary increases.” He added that “this is not a punishment, but a recognition that certain roles require in-person collaboration and communication.”

Many employees disagree with this rationale, arguing that they have been able to perform their tasks effectively and efficiently from home. Some have also expressed concerns about their health and safety, as well as their work-life balance, if they are forced to commute and spend long hours in the office. Some have even threatened to quit or look for other jobs if the policy is not revised.

Amazon is not the only company that is trying to bring its workers back to the office. Other tech giants like Google, Facebook and Apple have also announced plans to require some form of in-person work in the near future. However, Amazon’s policy seems to be stricter and more punitive than others, as it directly affects the career prospects of its employees.

The company has defended its stance, saying that it believes that “the office is essential for fostering culture and innovation.” It has also said that it will offer some exceptions for employees with medical conditions or other special circumstances. However, it has not specified how many employees will be affected by the policy, or how it will enforce it.

The policy has sparked a heated debate among Amazon’s employees, as well as the wider tech industry and society. Some support the company’s decision, saying that it will help restore a sense of normalcy and community after a long period of isolation and disruption. Others oppose it, saying that it will harm employee morale and productivity, as well as limit diversity and inclusion.

On New York City prohibition, Airbnb said that it is disappointed by Amazon’s decision and hopes that it will reconsider its stance. The company said that it believes in the positive impact of home sharing and the benefits it brings to hosts, guests, and communities. It also said that it is willing to work with the city council to find a fair and reasonable solution that balances the needs of all stakeholders.

Nigeria’s Inflation Rate Climbs to 27.33% in October, As the Cost of Goods & Services Soars

By
Samuel Nwite
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0

Nigeria’s inflation rate surged to 27.33% in October, marking an increase from the previous month’s rate of 26.72%, as reported by the National Bureau of Statistics (NBS) on Wednesday.

The month-on-month analysis revealed a rise of 0.61 percentage points from September 2023.

On a year-on-year basis, the headline inflation rate was 6.24 percentage points higher than in October 2022, where the rate stood at 21.09%. This reflects a significant acceleration in inflationary pressures over the past year, underlining economic challenges.

This upward movement in the headline inflation rate reflects the challenges faced by the Nigerian economy, with the soaring cost of living tied largely to food inflation. However, the data indicates that various economic factors, including policy changes and external influences, have influenced the inflation trajectory.

The food inflation rate for October 2023 quickened to 31.52% on a year-on-year basis, indicating a 7.80 percentage point increase compared to the rate recorded in October 2022 (23.72%). Factors contributing to this surge include the removal of subsidies on petrol and other government policies, impacting the prices of goods and services.

“The average annual rate of food inflation for the twelve months ending October 2023 over the previous twelve-month average was 26.33 percent, which was a 6.50 percent points increase from the average annual rate of change recorded in October 2022 (19.83 per cent),” the NBS noted.

The depreciation of the naira, by over 50% in both official and parallel FX markets, following the Central Bank of Nigeria’s decision to collapse all forex windows into the Investors and Exporters (I&E) window, has added to inflationary pressures.

Also, President Bola Tinubu’s announcement in May regarding the removal of the petrol subsidy has contributed to the current economic hardships faced by many Nigerians, with an attendant increase in the prices of essential goods and services.

The Central Bank of Nigeria (CBN) responded to the high inflation by raising its benchmark lending rate to 18.75% in July. The bank asserted that this rate hike had made a substantial difference in moderating the inflation rate. However, concerns remain about the impact of inflation on the cost of living and economic stability.

In response to the increasing food prices, President Tinubu declared a State of Emergency on food insecurity in July, emphasizing the inclusion of food and water availability and affordability within the purview of the National Security Council.

The agency indicated that the main contributors to the rise in the headline index at the divisional level were food and non-alcoholic beverages (14.16%), housing, water, electricity, gas, and other fuel (4.57%), clothing and footwear (2.09%), and transport (1.78%).

Other notable contributors include furnishings, household equipment, and maintenance (1.37%), education (1.08%), health (0.82%), miscellaneous goods and services (0.45%), restaurant and hotels (0.33%), alcoholic beverages, tobacco, and kola (0.30%), recreation and culture (0.19%), and communication (0.19%).

The report highlighted that on a month-on-month basis, the headline inflation rate in October 2023 was 1.73%, which was 0.37% lower than the rate recorded in September 2023 (2.10%). This indicates that the rate of increase in the average price level in October 2023 was less than the rate in September 2023.

Furthermore, the percentage change in the average Consumer Price Index (CPI) for the twelve months ending October 2023 over the average of the CPI for the previous twelve-month period was 23.44%, showing a 5.57% increase compared to the 17.86% recorded in October 2022, according to the report.

Experts have recommended to the central bank the option of lowering interest rates as a strategy to alleviate inflationary pressures. Despite these suggestions, there is an anticipation that the interest rate may undergo another upward review. It’s worth noting that previous increases in interest rates have not succeeded in effectively curbing the persistent rise in inflation.

Improving Food Preservation in Nigeria

By
Paul Ugbede Godwin
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0
Spices in markets

Nigeria is a country with a large population and a rich agricultural potential. However, it faces many challenges in preserving and processing its food products, especially fruits and vegetables, which are highly perishable and prone to post-harvest losses. According to the Food and Agriculture Organization (FAO), Nigeria loses about 40% of its annual food production due to poor post-harvest management.

One of the indicators of economic development and living standards is the ownership of household appliances, such as refrigerators. Refrigerators are essential for preserving food, reducing food waste, and improving food safety and quality. However, not all countries have the same level of access to refrigeration, and there are significant disparities across regions and income levels.

According to the World Bank, in 2019, only 38% of households in India owned a refrigerator, compared to 99% in China and 98% in Brazil. India’s refrigerator ownership rate was also lower than some of its African counterparts, such as Nigeria (22%) and Ghana (37%). These figures reflect the challenges that many developing countries face in providing reliable and affordable electricity, as well as the low purchasing power of a large segment of their population.

There are several factors that affect the demand and supply of refrigerators in these countries. On the demand side, some of the barriers include the high cost of refrigerators, the lack of awareness of their benefits, the cultural preferences for fresh food, and the limited availability of credit and financing options. On the supply side, some of the challenges include the lack of domestic production capacity, the high import tariffs and taxes, the poor quality and durability of refrigerators, and the inadequate after-sales service and maintenance.

To increase the refrigerator ownership rate in these countries, there is a need for concerted efforts from various stakeholders, such as governments, manufacturers, retailers, consumers, and civil society. Some of the possible interventions include:

Subsidizing the cost of refrigerators for low-income households or providing them with vouchers or cash transfers to purchase them. Promoting energy efficiency standards and labels for refrigerators to reduce their energy consumption and environmental impact. Educating consumers about the benefits of refrigeration for food preservation and health outcomes. Encouraging local production and assembly of refrigerators to create jobs and reduce dependence on imports.

Improving the quality and reliability of refrigerators by enforcing quality control measures and warranties. Expanding the distribution network and service centers for refrigerators to increase their availability and accessibility. Developing innovative business models and financing schemes for refrigerators, such as pay-as-you-go systems or leasing arrangements.

Refrigerators are more than just appliances; they are enablers of economic development and social well-being. By increasing their ownership rate in developing countries, we can help millions of people improve their living standards and achieve their aspirations.

Some of the factors that contribute to this problem are:

Lack of adequate infrastructure, such as cold chains, storage facilities, processing plants, and transportation networks. Lack of access to modern technologies, such as industrial dryers, sorting machines, packaging materials, and preservation methods. Lack of knowledge and skills among farmers and processors on how to handle, process, and store food products safely and hygienically. Lack of market linkages and incentives for farmers and processors to invest in quality improvement and value addition.

To address these challenges, Nigeria needs to adopt a holistic approach that involves the following strategies:

Promoting indigenous food preservation and processing methods, such as sun drying, fermentation, germination, and soaking, which are low-cost, environmentally friendly, and culturally acceptable. Creating food processing opportunities for entrepreneurs, especially women and youth, who can use locally available resources and equipment to produce value-added products, such as dried fruits, jams, juices, sauces, snacks, etc.

Providing training and extension services to farmers and processors on best practices for post-harvest handling, processing, and storage of food products. Improving access to finance and technology for farmers and processors to enable them to acquire modern equipment and materials for food preservation and processing. Strengthening market linkages and policies for farmers and processors to enhance their competitiveness and profitability in the domestic and export markets.

By implementing these strategies, Nigeria can reduce its food losses, increase its food security, create employment opportunities, generate income, and improve the quality of life for its people.

Economic Woes Cast Shadows on Tinubu’s Early Presidency, Amid Public Outcry and Loan-Seeking Approach

By
Samuel Nwite
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0

Barely five months since President Bola Tinubu assumed office, the Nigerian economy has maintained an accelerated downward trajectory – resulting in public outcry. Inflation has risen to 27.33%, triggered by some of the president’s economic reforms, including the fuel subsidy removal and the floating of the FX market.

The backdrop of the soaring cost of living, against the meager earnings of about $30 monthly minimum wage in Nigeria, is increasingly fueling the public outcry. Coming from eight years of what many have described as the worst leadership in Nigeria, under former President Muhammadu Buhari, the Nigerian people can’t wait for economic relief under the new government.

Alas, the Tinibu administration, under intense pressure to ameliorate people’s suffering, is beginning to cry out.

On Monday evening, in Mecca, Saudi Arabia, Tinubu said that his administration inherited serious liabilities from the previous government but assured that he would not make any excuses.

This is as the President has advanced negotiations concerning a multi-billion dollar infrastructure finance facility from the Islamic Development Bank to fund a multi-sectoral portfolio of infrastructure projects at the federal and sub-national levels in Nigeria.

President Tinubu in a statement issued by his Special Adviser on Media and Publicity, Chief Ajuri Ngelale said: “We have serious deficits in port infrastructure, power infrastructure, and agro-allied facilities that will enable sustainable food security in our country. These deficits present an unrivalled opportunity for savvy investors in a market that is by far the largest on the continent.

“We inherited serious liabilities, but also assets from our predecessors. We do not make any excuses.”

The president’s declaration found reinforcement in the remarks of the National Security Adviser, Nuhu Ribadu. Speaking at the Chief of Defence Intelligence Annual Conference 2023 in Abuja, where he addressed leaders under the theme “Leveraging Defence Diplomacy and Effective Regional Collaboration for Enhanced National Security,” Ribadu asserted that the current administration inherited an economically challenged and depleted financial situation.

In his speech, Ribadu did not mince words, stating, “Yes, we’re facing budgetary constraints. It is okay for me to tell you. Fine, it is important for you to know that we inherited a difficult situation, literally a bankrupt country, no money, to a point where we can say that all the money we’re getting now, we’re paying back what was taken. It is serious!”

At the same time, the governor of the Central Bank of Nigeria (CBN) confessed that the financial regulator does not have the “magic wand” to change the nation’s current economic dynamics.

“The CBN does not have a magic wand that can be waved at the current economic challenges,” he said.

While several economists have admitted that Tinubu’s administration inherited a deplorable economic situation from Buhari, they have expressed concern that the growing outcry from the present government signals cluelessness.

Although Tinubu said he was not making excuses by voicing out the poor state of the economy, the Nigerian masses bearing the brunt are seeing the complaints as a sign that his administration lacks the wits it takes to revive the economy.

One focal point of criticism is the administration’s reliance on loans to mitigate revenue shortfalls – which is largely tied to the crisis in the oil sector – the nation’s major means of revenue generation. Another notable factor is the extravagant utilization of borrowed funds. In a recent revelation, the 2023 Supplementary Budget was identified for its opulent expenditures earmarked for public officeholders. This includes allocations running into multibillion naira for activities such as building renovations, the acquisition of luxury cars, and even the purchase of a yacht.

The president’s trip to Saudi Arabia involves seeking financial assistance from the kingdom and lenders. The presidency announced that Tinubu secured Saudi’s commitment to provide funding to boost Nigeria’s ailing foreign exchange market, and he also entered advanced negotiations with the Islamic Development Bank for a multi-billion dollar infrastructure finance facility.

These are in addition to other multibillion-dollar loans secured since Tinubu assumed office. Critics argue that he is mirroring the approach of his predecessor, who embarked on a borrowing spree that skyrocketed Nigeria’s public debt stock to N87 trillion, without tangible results to justify such borrowing.

As the economic challenges persist, Tinubu’s administration’s responses determine its readiness to navigate the delicate balance between addressing inherited issues and demonstrating effective leadership to steer the country toward recovery.

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