FairMoney MFB, from lending app to full-fledged microfinance bank, bridging the gap in financial inclusion – TechEconomy.ng
The need for access to credit to cover personal and business expenses cannot be overemphasized, especially as a huge equalizer in the growth and development of the economy.
Despite the fact that more than 55 countries have committed to financial inclusion, more than 60 have launched or are in the process of developing a national strategy.
Many individuals and groups have come together to develop solutions for the sector, but the number of financially excluded businesses and individuals is still appalling.
In Nigeria, in 2021, the number of financially excluded individuals was 34.9 million adults representing 39.7% of the adult population, with only 28.6 million adults banked, representing 32.5% of the adult population according to EFInA (Enhancing Financial Innovation and Access, a financial sector development organization focused on financial inclusion.
Interestingly, innovators are continuously increasing to ensure the implementation of strategies to meet this challenge. This is where the FairMoney microfinance bank revolution as a digital bank for emerging markets!
The evolution of FairMoney
Licensed by the Central Bank of Nigeria, FairMoney became a full-fledged digital microfinance bank last year.
FairMoney was incorporated in 2017 with operations in Nigeria and India. Over the past 4 years of operation, it has grown its customer base to over 5 million users and 1.9 million bank accounts.
FairMoney has since reinvented itself by breaking away from the tradition of a simple lending app to become a full-fledged Microfinance Bank (MFB) – a credit-focused digital bank that massively promotes financial inclusion and access to digital banking services for the unbanked and underbanked masses.
With a presence in Nigeria and India, FairMoney, which started as a lending app, is ready to go the last mile to meet the needs of the unbanked and has expanded its scale in the process. “We are willing to partner with regulators and other fintech players to build the right layer of infrastructure to include the 60 million customers who do not have BVN and do not have access to financial services today. today.” siad Laurin Hainy, CEO/co-founder of FairMoney.
Reasons why FairMoney could have switched to MFB?
The first thing that comes to mind is accountability and access to more financial services for as many people as possible. I believe FairMoney MFB understands the need to be responsible and play by the rules.
Today, many Nigerians lament how notorious loan apps have ruined their lives, businesses and family ties. Some even went so far as to declare people “dead”. They have no respect for data privacy which is the key principle of the Nigerian Data Protection Regulations (NDPR). Fairmoney MFB is not in this league! FairMoney understands this is unethical and has maintained best practices. They are looking to extend this model to other financial services as a digital bank.
The promoters of this app have also understood the true essence of financial inclusion. According to the CBN, an MFB makes financial services accessible to a large segment of the potentially productive Nigerian population who would otherwise have little or no access to financial services.
The Bank (FairMoney MFB) also ensures synergy and integration of the informal sub-sector into the national financial system. Through the bank’s efforts to improve service delivery to micro, small and medium-sized entrepreneurs (MSMEs), it contributes to rural transformation by mobilizing savings.
FairMoney also creates employment opportunities and increases the productivity and household incomes of the country’s economically active poor, thereby improving their standard of living.
FairMoney MFB services/products and benefits for users
“Fair Banking for All” is the brand’s call to all those in need of financial services and opportunities to come forward and seize them; especially those who need flexible banking – the brand believes everyone should be able to access the best digital banking experience, regardless of status.
As a digital bank, SME and personal finance lender, Fairmoney MFB offers;
- 3% Off Airtime and Bill Pay:
- Fast loans in 5 minutes: almost instant digital loans 24/7 directly via its mobile application.
- Zero transaction fees
- 0% interest on 15 day loans for new users.
- Free debit cards
- 100 free bank transfers per month
- High interest investments – up to 21%.
FairMoney MFB is taking advantage of this rapidly growing digitization era to provide instant loans within 5 minutes ranging from ₦1,500 to 1 million. Digital consumer and SME lender focused on financial inclusion offers repayment terms from 61 days to 18 months, with monthly interest rates ranging from 2.5% to 30% — APRs of 30% to 260 %.
Last year, FairMoney disbursed more than £71bn in loans, a staggering spread considering the amount spent in 2020.
In the same year, FairMoney successfully raised over $42 million Series B funding round, launched a £10 billion private note program, received a microfinance bank license from CBN and has an Investment Grade rating from Global Credit Ratings (GCR).
The FairMoney app
The app interface is completely user-friendly and the navigation is completely lucid. Without a second party, you can easily interact with the application, transact quickly and without any confusion. From the registration process, through all the app activities, you get a satisfying feeling.
Interestingly, there is a digital customer assistant that walks users through the steps to navigate the app efficiently. The on-call customer assistants are totally friendly and have great customer relations skills.
While applying for the loan, you need to enter some personal information including BVN, phone number, name, monthly income, etc.
In this regard, the company has created more amazing products for the unbanked and underserved. As a digital bank, bank account holders enjoy 100 free bank transfers per month with no transaction fees.
You can pay bills and buy airtime on the app, by doing so you get a 3% discount. FairMoney has also created a physical debit card to make transactions even more convenient, allowing customers to do more with their funds.
We could say that the fintech company provides most of what a traditional bank provides and others are rolled out periodically. The bank is set to roll out a savings product and expand its transaction channels by adding features such as USSD, among others. All transactions with FairMoney are conducted online.
Doing business online is a “no no” for many people, but you can’t blame them. The rate of cybercrime is frightening globally, but measures are certainly increasing and being carefully put in place to address it.
Speaking of high interest rates, fast loan repayment allows users to become eligible for higher loans with lower interest rates, they don’t stay high.
So, as I said earlier, FairMoney has changed from a lending application to a microfinance bank and for this reason, it has come under strict CBN regulations.
The app is fast and reliable. It must be used to assess the level of relationship with its customers. The way the FairMoney MFB team maintains client relationships is impressive and highly commendable; it really shows that they care about people and not just profit.