I know what you might be thinking, “Who does this guy think he is, sending us a newsletter out of the blue without any explanation on why he has been gone this long”. Well, I am truly sorry that it has been a while since I put anything out. But I do have a (probably valid) reason for that; I have been learning.
During the past few weeks, I started a couple of programs on different topics that I think can move me forward. My favorite so far was a Bootcamp organized by Mind-Capital that I attended. It was focused on start-up ideation and product validation. An important lesson learned from the whole thing was that while you might have identified a major problem that needs to be solved, it is still up to the market/customer to determine whether your proffered solution is the solution to the problem or just a vanity project.
A great example was just a few days after the Bootcamp. I was looking at Loan Friends (a product that I’ve discussed without fail since I started putting out newsletters) and I thought of a feature that would allow people to buy things on credit from shops, with shop owners having the full assurance of getting paid later. After my initial excitement about finding the next best thing, a little further thought poked a huge hole in my product: shop owners don’t want to be owed, they have things to buy too. If customers want to buy something on credit, they can use BNPL. There was no problem being solved with my genius, I was just building nonsense in my head.
Many of us do this a lot, not just at work but even in the weirdest parts of life. The key is to listen to the people with the problem. What is the root of the problem? What, in their opinion, will solve it? What would have happened for them to consider the problem as solved? These questions could help solve a lot of heartache from both sides.
A Tale of Three Countries
A few weeks ago, the CBN imposed new withdrawal limits for Over the Counter (OTC), ATM, and POS services. ATM withdrawals were limited to ₦20,000 daily and ₦100,000 which is the same for POS withdrawals, OTC payments were reduced to ₦200,000 and ₦500,000 per week for individuals and companies respectively with a processing fee of 5% and 10% for higher amounts withdrawn.
My initial reaction to this was to pop fun of everyone that complained because I didn’t understand why they were so pained. I for one have never had to withdraw up to ₦400,000 in a month (because I don’t even have ₦400,000 lying idly in my account) and I know that this is the reality for many Nigerians. Weren’t we all meant to embrace this giant step we’re trying to take to a paperless economy?
Pictured above: Me popping fun at someone’s child
Someone then told me about how the account offices in government hospitals aren’t digitized, and the fact that many people still must carry cash to pay for treatments. It moved me a little, but I was like “So? All they need to do is digitize/ incorporate a payment system that would allow instant transfers”. I then saw a tweet complaining about how the aggregation of farm produce will be affected because the farmers trust only cash “well… that’s fixable with some sensitization”. The list of possible problems that can fall out of this directive is numerous. But it’s all worth it to achieve a cashless society, right?
India thought so. In 2016, the country did the same thing that the CBN did, and it was a disaster, the currency in circulation continued to grow, and people were continually complaining about being stranded because they couldn’t pay for things they wanted as they didn’t have access to cash. Things are a lot better now though because India now has an increasing acceptance of the cashless policy. This is mainly due to the fact that India has built enough infrastructure to carry this out.
Another cashless country is Sweden: Sweden has been working on its cashless policy since the 1960s. Creating an environment where there was enough infrastructure, and policy to guide the use of e-payment methods. For example, store owners insisting on cashless transactions were well within their rights and protected by the law. It also incentivized the use of cashless payments by making them less costly than cash payments.
These two countries have shown that initial gra-gra will only lead to premium tears. While there is an existing problem in terms of financial inclusion and the prevalence of cash in our economy. Is it possible that this reduction is not the solution that we think it is? People withdraw less these days because they know that the POS will be on-hand whenever they need to top up a bit. With more infrastructure (like Mo-Mo), even rural areas will embrace e-payment systems.
I do hope we learn from these countries. Just like my shop lending product, this problem exists, but the solution is too obvious for us to be trying to create a spontaneous effect. Build infrastructure, sensitize Nigerians, build their trust, and don’t force anybody.
What has been up?
1. I’ve been learning, as I said earlier. And it has been one of my most fulfilling paths in the past year.
2. Chiprent is still in the business! And we have the best deals on shared apartments and monthly rent. Check us out.
3. Loan Friends is how you can help your friends and family members to get that Christmas rice and chicken and still get your money back in time to weather the January storm.
4. I found this series “Single drunk female” and it has been absolutely delightful so far. You should check it out.
5. I made a Twitter poll asking whether people felt like the coming elections were a “make-or-break” moment for Nigeria and all (two) voters stated that it was. What do you think?
6. Finally, you might be wondering why Messi’s picture is the cover of today’s post. That’s because I dedicate the post to him. The one true GOAT (you can’t even argue anymore because it’s not up for debate).
7. Thank you very much Daniel Sule for always reading my newsletters and being an all-around awesome person. May your light never dim.
See you all next year! Please keep some chicken for me. Vamos!