Business Ideas

Exploring Moniepoint’s Multi-Million Dollar Offline strategy.


The first place you most likely will not look when searching for the presence of a fintech company is in the gathering of commercial bus drivers. The National Union of Road Transport Workers (NURTW) consists of almost 2 million members including taxi, bus, and truck drivers.

It is this association that presents the biggest opportunity for Moniepoint. NURTW also has something that fascinates Moniepoint. It is difficult to find a commercial vehicle that doesn’t remit to the association.

In September, Moniepoint announced that its average monthly transaction value hit $12 billion for about 1.6 million businesses in Nigeria. It plans to target at least 4.8 million retail customers in the next three months. The company also disclosed that the offline market generates the most revenue compared to the online market.

“We studied their (NURTW) distribution to see what we could learn and adapt it to our specific use case,” says Tosin Eniolorunda, group CEO of Moniepoint.

According to Eniolorunda, Moniepoint’s offline strategy is rooted in first-principle thinking. First principles thinking is a problem-solving thought process of attacking problems by first identifying the fundamental issues. The CEO said the company had to re-imagine the process of reaching a critical mass, before considering what other competing companies were doing.

For many experts, the actual addressable market for financial service providers is the total number of people with Bank Verification Numbers (BVN), which stood at over 57 million citizens as of March 31. This is because one person cannot have more than one BVN though the person can have multiple bank accounts. This leaves a critical mass of people outside the financial services market. There are therefore millions of Nigerians left unbanked and underbanked.

Over the years, the Central Bank of Nigeria (CBN) has made several efforts to bridge the gap between the banked population and the unbanked as well as the underbanked. In 2013, the apex bank created a national financial inclusion policy with a target to reach at least 80 percent of the population by 2020.

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As part of efforts to achieve the target, the CBN initiated different policies including the Shared Agents Network Expansion Facilities Limited, which gave banks the mandate to achieve at least 500,000 banking agents by December 2020. It also issued mobile money licences to new fintech operators and later – reluctantly – approved Payment Service Bank (PSB) licences for telecom operators to be part of the market.

The initiatives notwithstanding, the progress towards including more Nigerians in the financial system has been very slow. The CBN failed to achieve its 80 percent target by 2020 forcing it to increase the target to 95 percent inclusion by 2024.

Experts say banks and many other financial services operators are not pushy about financial inclusion because of the cost of onboarding new customers. Telco-led PSBs are thought to be the answer to financial inclusion, given their wider reach, but so far, their efforts have not produced the expected results.

One of the issues experts say is lacking in the push for 95 percent inclusion is the overdependence on online strategy.

“We keep talking all of this nonsense about ‘tech’ but the truth is that those who have succeeded in tech stumbled on demand. OPay or Moniepoint didn’t have a grand strategy to go offline from the beginning, the market pulled them into it,” says Osaretin Victor Asemota, growth partner at AnD Ventures.

A study of the NURTW showed that it has officials at every single bus stop. These individuals were responsible for the collection of fees from all vehicles that pass through their station and remit fees to a park boss. The park boss remits the money to another official at the local government level, who in turn remits to the state level.

“This informed our strategy because we began to see that if we are going to get to these agents (now merchants), we have to get people within their communities who are close to them,” Eniolorunda says.

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Like the NURTW, Moniepoint’s offline strategy functions through different tiers of thousands of relationship managers situated in every community in the country.

While many fintech companies would have preferred to recruit merchants directly, Moniepoint went in the reverse direction. It recruited people who were centrally positioned within the community and handed over the responsibility of onboarding merchants to these people.

The thinking was since the merchants were very well known to these people, they could establish trust quicker compared to outsiders working as staff of Moniepoint. To guarantee the success of the people, Moniepoint provided incentives.

“That’s how we hacked distribution,” says Ezekiel Sanni, senior vice president, offline distribution.

Moniepoint has a 24-hour resolution service for false debit card withdrawals to the market. This usually takes eight days after a customer physically visits a bank branch to resolve an unsuccessful card withdrawal and the account is debited.

Moniepoint’s onboarding process is a combination of online and offline methods. Sanni says the strategy is integrated but also allows some level of independence.

After onboarding online, a merchant may need an offline payment device – a POS terminal. It is at this point that he or she is required to meet an offline sales personnel to issue the device. Merchants also have to interface with Monnify, an online payment gateway that allows them to be integrated and enables them to collect payments online from their own app or website. Monnify enables merchants to collect payments. There are also payment codes for offline engagement that enable customer and a Moniepoint agent anywhere in the country to conduct effective transactions.

Eniolorunda says its offline strategy is important in a very low-trust business environment like Nigeria.

“We’ve seen people say they want to know who’s behind the brand and want some comfort that it’s not some anonymous folks they are dealing with online. There is also an emotional connection, rooted in trust, which is still important in banking and is one of the key distinctive elements for attracting and retaining customers. So, the offline strategy does have a lot of merit in a society like ours to provide the well-needed assurances that their monies are safe and secure, and they are dealing with a reputable institution. Our offline strategy caters to these nuances, and we are confident that things will improve even as we deepen confidence, trust and reliability via our systems,” he adds.

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In August, Moniepoint announced that it has hit over 640,000 mobile money agents. These agents are not managed by Moniepoint staff directly. It is the company’s relationship managers that have the responsibility to interface with merchants and agents. This system makes it possible to escalate issues when necessary, providing fuller local support.

Moniepoint engage with the relationship managers, providing them with needed resource materials, which come in the form of weekly training programmes around critical business, self-improvement and regulatory subjects.

There is also an internal assessment and early warning systems to help detect challenges before they go out of hand. There is a dedicated team, Moniepoint’s Learning and Development, which ensure that the relationship managers are up to speed on pertinent issues weekly. The team achieve this through an online portal as well as frequent physical training.

“The entrepreneurial and ownership mindset is key to the way our people operate, and we provide all the accoutrements needed to ensure that our offline strategy works. But clearly, our offline strategy is premised on hard data and human insights. We also understand that a strong feedback loop facilitates rich market intelligence, which enabled the company to successively introduce groundbreaking features to the market, which some competitors adopted and eventually became industry standards,” says Eniolorunda.

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