Yesterday was amazing as a Microsoft manager took us to an excursion on strategy and business execution. Tomorrow,  Aderinola Oloruntoye is going to focus on Design Thinking. The ex Digital Transformation & Innovation Lead in West Africa for software giant, SAP,  brings the connection between design and innovation.

And the most amazing: an European bank which sent staff to Tekedia Mini-MBA asked Tekedia to drive a project, and he delivered with the team for the Institute – thanks Aderinola for making this small school stand before giants. Then on Saturday, I will close the week with “Building Great Companies and Brands”.

• Thur, Jun 17 | 7pm-8pm WAT | Design Thinking – Aderinola Oloruntoye, Dean, Workforce Group
• Sat, Jun 19 | 7pm-8.30pm WAT | Building Great Companies and Brands – Ndubuisi Ekekwe.

Zoom links in the Board.

Tekedia Institute school.tekedia.com >> Learn from the best.

Fatura, a Cairo-based B2B ecommerce marketplace, has secured $3 million in a pre-Series A round led by Sawari Ventures and Arzan Venture Capital. The deal also included Egypt Ventures, EFG-EV, Cairo Angels, and Khwarizmi Ventures. In July 2020, the company raised an unknown amount of money in a seed round.

With this financing, Fatura will be able to expand its services beyond e-commerce and digital financing, allowing it to optimize the interchange of products, money, and information in the B2B environment while concentrating on ease and user experience.

“There is a great opportunity in the B2B space in Egypt, that is growing as the players are becoming digitally mature and ready. Collectively, the digital B2B players in the FMCG space capture less than five per cent of the market and there is a long way to go. Our conviction is to stay asset-light, be inclusive to all the industry stakeholders and to attract the best on-ground acquisition force across the country,” Hossam Ali, Fatura’s CEO, said in a statement.

Fatura has established a solid basis and infrastructure for monetizing its data and services. New services to serve the many actors in the company’s ecosystem, such as manufacturers, wholesalers, and retailers, as well as diverse digitization projects with an emphasis on digital payments and regional development into new markets, are among the company’s future ambitions.

“Fatura’s existing infrastructure has enabled them to expand their offerings to new customers,” commented Hany Al-Sonbaty, Managing Partners at Sawari Ventures, adding that, “the team has demonstrated that they have the vision to identify new opportunities and the prowess and agility to implement and deliver. We are excited to become part of their journey.”

“Being part of Fatura’s success story is exciting for us. The FMCG industry is in need of Fatura’s product, which will solve many challenges faced by small retailers. Also, its fintech angle complements the core product and enables retailers to scale their business further with less working capital constraints,” Hasan J. Zainal, Managing Partner of Arzan Venture Capital said.

Khwarizmi Ventures recently participated in Egyptian ecommerce logistics startup, Bosta’s $6.7 million Series A round.

The B2B marketplace began in late 2019 and has already exceeded 1 billion EGP in annual GMV, and that’s just in the FMCG industry. The Fatura smartphone app links wholesalers and manufacturers with retailers across a wide range of sectors. The company has been functioning in the FMCG market and is now experimenting with other industries.

The firm has also expanded its reach to more than 25,000 stores and 500 wholesalers and manufacturers throughout 20 governorates, exchanging more than 10,000 SKUs in the last year. Fatura also pierced the surface of financial services by offering digital lending with a focus on retail financing, with plans to expand its retail financing offerings in the near future.

The Director, Information Technology Department, Central Bank of Nigeria (CBN), Mrs. Rakiyat Mohammed, stated at the banker’s committee meeting that the apex bank will be launching a Central Bank Digital Currency (CBDC) before the end of 2021: “As I said, before the end of the year, the Central Bank will be making special announcement and possibly launching a pilot scheme in order to be able to provide this kind of currency to its populace.” This follows a statement by the bank governor a few weeks ago: “Under cryptocurrency and Bitcoin, Nigeria comes 2nd while in the global side of the economy, Nigeria comes 27th. We are still conducting our investigation and we will make our data available.”

Across the world, central banks are exploring the options of creating digital currencies. Just like we moved from cowries to paper notes over centuries, it does appear that digital currency is going to be part of the history of this generation. As US moves with e-dollar and China ramps up e-yuan, Nigeria is making sure that it is not being left out.

“We have currency in two forms in Nigeria as of now, there are the notes and there are the coins. So the Central Bank currency is to be the third form of money which means just as we have electronic money, digital money is not new in Nigeria. Just as we are about the third or fifth in the whole world as far as advancement in the use of digital money is concerned. So this is going to compliment the coins and cash that we have. The Central Bank digital currency will just be as good as you having cash in your pocket and even as you have the cash in your pocket, you are going to have the cash on your phone.

“We all know how money has to travel for someone to send money from Nigeria to abroad and it is huge money in Africa. We also know that a recent report by EfiNA was that our target was to achieve 80% financial inclusion. We are about 60 percent and at the rate at which we are going, we are not going to meet this target. Central Bank digital currency will accelerate our ability to meet this target.”

But as this redesign happens, expect pressure on the commercial banks. You know what? If CBN has these digits, they can bypass commercial banks to reach the end users. So, government policies can be managed directly by the central bank, and there is also a concern that some customer deposits will now sit in the central bank’s vault instead of commercial banks’.  Yet, we do not know fully what we do not know, but one thing is evident, Nigeria is on the right path in reducing financial transaction frictions, and could possibly advance financial inclusion at scale. China is also showing that digital currency could remove ghost workers with the launch of its blockchain-enabled salary payment system: “China has taken a major step in its central bank digital currency (CBDC) tests. The country just debuted and successfully launched blockchain-enabled salary payments with digital yuan at Xiong’an. According to the official website of the Xiong’an New Area, the People’s Bank of China (PBoC) has successfully integrated the country’s first on-chain wage payouts in the digital yuan”.

The biggest threat from digital national currencies is sucking deposits from commercial banks. In other words, most customers will have to open bank accounts with a central bank, and that means moving some of their deposits from banks to the apex bank where the digital currency is domiciled.

A payment system which offers a seamless way to make transactions sounds interesting – and will thrive, even though it has no way to magically boost the strength of Naira. The opportunities could be for those companies which will play well at the edges of the smiling since the central bank will be the de facto operator at the center. The future of banking could possibly go to tech firms which offer banking services!

And as that happens, expect a phased disintermediation of 1st generation coins like Bitcoin as e-yuan, e-dollar, e-naira, etc evolve. Now, you know the risks!

The Challenge Ahead for Banks As Fiat Currencies Digitize

Imagine living in a country where you have access to almost all things. You have access to the financial system such as having a bank account.

You have the right to conduct a business that has a disruptive revenue model. Having the freedom to experiment ideas that will contribute to the real growth of the economy?

On the other hand, imagine you are in a country that lacks many things. The country has an undeveloped financial system, there is a problem of financial inclusion.

70% of the population is unbanked. Do you think you will be able to thrive in such a country?

To solve the problem of economic development is to address the financial inclusion problem. This is the story of a country called El Slavador, it has a huge problem of financial inclusion.

30% of the population are banked and 70% of the country is unbanked. According to a speaker at the Bitcoin 2021 conference held in Miami, 20% of the GDP of this country is from remittance sources, and 50% of the remittance goes into fee servicing.

But, they want to become like other countries that don’t have financial inclusion problems. 

In the Bitcoin conference, the president announced that Bitcoin will be made a legal tender. This is because with bitcoin the problem of financial inclusion, high rate of remittance, inflation due to the devaluation of currency will be solved.

But, what are the gains or the impact of making bitcoin and other cryptocurrencies legal tender?

Ways Cryptocurrency Adoption can Speed Up Economic Development.

While El Slavador became the first futuristic country that believed that a country can solve its economic development problems by embracing technology, the problem the country is experiencing is very similar to other developing countries and emerging economies.

When it comes to inflation, it is a global problem that every nation should fix. Imagine an open and trustless monetary system, where currency supply is fixed, will there be inflation?

The potential of bitcoin can help countries to solve the following problems and more. 

Financial Inclusion Effect:

Imagine what will happen to a country that has most of its population unbanked adopting cryptocurrency as a legal tender. When it comes to cryptocurrency, you don’t need a bank account to be part of the financial system, all you need is access to the internet. 

With access to the internet and software applications, you will be able to use bitcoins and other coins.

This will give freedom to the people and security. The poor and crude standard of living will be gone. What does financial inclusion bring to an economy?

Financial inclusions bring an increase in economic activities to an economy, this will translate to growth in GDP. Do the economies of Africa need this solution? Your answer is the same as mine…

 Economic Growth Effect:

According to a UN report, remittance to Africa has a 10% average fee rate. That means for every $1b remittance inflow would decrease by $1m.

This is a loss to the economy, and it will have a ripple effect on the economy. Imagine, a country like El Slavador that pays 50% of the remittance on the fee. That means the remittance to the economy is reduced by ½ due to the high rate of sending fiat money.

What crypto such as bitcoin does is that it makes cross border payment less expensive and efficient. What will take 10% can now be less than 2% .  A transaction that is supposed to take 3 days will now take minutes.

This gain in efficiency will generate gain in productivity which will lead to economic growth? Do Africa and Asian countries need this life-changing innovation? 

Technological Innovation Effect:

One of the direct impacts of the adoption of crypto, especially bitcoin as legal tender by a country, is the increase in technological innovation. A country that is friendly to blockchain and crypto innovation will surely attract the best tech brains. 

This will become a network effect that will lead the country to become a pioneer in that industry.   I can imagine the level of innovation that will be coming from El Slavador, because many tech talents will be opening offices there. 

What will this have on the economy of El Slavador? 

Entrepreneurship Explosive Effect:

Joseph Schumpeter, a legendary economist believed that the engine of economic growth is innovation. When innovation is added to entrepreneurship, it will create real growth to the economy. 

The government of El Slavdor had a foreign policy to offer a permanent citizenship to cryptopreneurs with a requirement of having 3 BTC.

When the effect fully matures, the economy will reap the benefits of reduction of unemployment, growth in productivity and economic activities, reduction in crime etc. When people have what to do, there will be less idle time to get involved in crime and social vices.

Can you see that to solve the problem of economic development technology is the sure solution?

However, making bitcoin a legal tender will be a great stride by countries as the benefits are too great but implementing policies to maximize the benefits are far more important. What policies will your country adopt to maximize or optimize the benefits of making crypto a legal tender?.

Here is an article that explains how to use ERC20 USDT and TRC20 USDT. 

Originally published on Trenndify