In a bid to help Micro, Small and Medium Enterprises recover from the impacts of COVID-19 and reposition them to take advantage of opportunities of a post-COVID future, Paylink, a payment and ecommerce solution for individuals, businesses and non-profits, has partnered with tech giant, Google.
The partnership is particularly geared towards empowering MSMEs with the digital expertise they require to thrive through the Paylink MSME Digital Bootcamp.
The organiser of the bootcamp, SystemSpecs, providers of Paylink, made this disclosure during the formal announcement of the expression of participation to MSMEs across Nigeria for the free seminar supported by Google.
Through a series of online trainings, MSMEs in Nigeria will be equipped with the relevant digital skills necessary to drive and scale their businesses in the digital era, recover from the impacts of the coronavirus pandemic, as well as sustain their business on a long term.
As a developing country, MSMEs form the bedrock of enterprise and employment in Nigeria.
A statement by the Ministry of Trade and Investment says Nigeria’s over 37.07 million MSMEs account for more than 84 percent jobs in the country.
MSMEs also account for about 48.5 percent of the gross domestic product as well as about 7.27 percent of goods and services exported out of the country.
The Ministry of Trade and Investment further stated that micro-enterprises, which are the smallest businesses, account for the bulk of the MSMEs in Nigeria with 36,994,578 enterprises (about 99.8 per cent).
Commenting on the partnership, SystemSpecs’ Executive Director, Corporate Strategy, Deremi Atanda, said: “With more than 41 million MSMEs spread across the length and breadth of the country, it is clear that if these enterprises are empowered to attain their true potentials, they would significantly impact all strata of our economy and society at large.
“This is one of the reasons we have partnered with Google, a reputable organisation that deals with businesses across various segments of the Nigerian marketplace, to equip enterprises in the micro, small and medium-scale cadre with key requirements to thrive in a post-COVID economy.
“It is our conviction that MSMEs are an essential stakeholder group in the Nigerian project and we are committed to advancing their causes.”
Covering themes that include brand building, business growth and tools for business management and to hold on selected days in the months of March, April and May, 2021, the training leverages Google’s Digital Skills Africa programme for existing and prospective Paylink subscribers.
“COVID-19 forced many businesses to re-think their strategies and challenged long-standing entrepreneurial approaches. Among others, it brought forth the need to adopt a digital-first strategy in order to reach an extensive and largely unexplored market and ultimately grow bottom-line,” said Google Nigeria’s Country Director, Juliet Ehimuan.
“While a number of MSMEs are aware of this progressive direction, many are not. As with our other trainings, partnering with SystemSpecs to train current and prospective Paylink customers will go a long way in empowering more stakeholders in Nigeria’s MSMEs space,” Ehimuan added.
Paylink.NG is a secure and seamless solution that helps individuals, MSMEs, religious organisations, not-for-profits, social media sellers, crowd funders, event planners, freelancers and others, to receive payments through multiple means, by sharing a customised link.
To register for Paylink MSME Digital Bootcamp, click here.
West Africa Launches New Payments Digitization Agenda
In Senegal, 8 out of 10 workers are paid in cash. Most are temporary workers and excluded from health insurance. A survey revealed that 77% of temporary workers would be willing to receive their wages digitally if this gave them access to health insurance. These are some of the major findings of the publication that the Senegalese government has launched today, with support from the Better Than Cash Alliance (United Nations), the World Bank and the National Agency of Statistics and Demography of Senegal. Combining digital payments with health insurance benefits offers an excellent opportunity for social inclusion, formalization, and financial innovation.
Digital payments stimulate domestic production and consumption. If 50% of temporary workers in Senegal received payments digitally, 45 billion CFA francs would be added to GDP per year (around $80 million USD). Paying workers digitally, speeds up the financial inclusion for the population, boosts business competitiveness and increases financial system liquidity. To tap into this potential, the SME Development Agency (ADEPME) plans to bolster its SME support fund with $20 million USD (around 11 billion CFA francs) from the World Bank. This will be used to strengthen SME digitization initiatives and support digital payment projects for workers.
High-level leadership speaks out in support of digital payments for workers
Senegalese President Macky Sall and H.M. Queen Máxima of the Netherlands, who serves as UN Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA), have launched an appeal to fellow leaders, the private sector and civil society, inviting them to: “use this report to ensure digital payments are at the center of a sustainable and fair economic recovery. We look forward to jointly providing leadership on this agenda to achieve an inclusive and digitally enabled recovery,” the two leaders added.
To set an example, the President of Burkina Faso, Roch Marc Christian Kaboré, also decreed, in late 2020, the digitization of payments for workers in the administration of Burkina Faso. When the COVID crisis emerged, the West African Economic and Monetary Union (WAEMU) and the Central Bank of West African States (BCEAO) took decisions aimed at reducing the circulation of cash in the 8 countries. These actions have had tangible impacts which are beginning to change the lives of workers and companies.
Digitizing payments and advancing universal health care coverage
While receiving a salary is often linked to health care contributions, globally at least 61% of workers operate in the informal sector without adequate coverage, according to the International Labour Organization (ILO). Indeed, in some countries, there is not always a legal obligation for employers to contribute to any kind of coverage for their informal/self-employed workers, which affects women more than men.
To meet this challenge of inclusion, the National Agency for Universal Health Coverage in Senegal has launched an ambitious digital payments platform. It has partnered with fintechs and private companies to link access to universal health coverage and digital payments – specifically targeting women. Flagship national enterprises such as the agricultural giant SODAGRI or SMEs such as QUALIOCEAN and Kossam SDE are setting an example by providing temporary workers with universal health coverage. More than 200,000 workers will now have access to quality, government-subsidized health care.
While 81% of national companies have fewer than 20 employees, on average hundreds or even thousands of temporary workers are employed in their supply chains. Employees are generally banked, but 93% of employees on temporary contracts are paid in cash. The latter are systematically excluded from the formal health system.
The successful transition towards digital payments
Three obstacles have limited the growth of payment digitization in Africa: the size of the informal sector, sometimes up to 90% of the economy; the historically low financial inclusion rate; and most importantly, 21% of African workers receive a wage keeping them below the poverty line.
This has all changed dramatically. Financial inclusion has surged since 2010 with the arrival of electronic money issuers and fintech.
The country’s largest employer, Compagnie Sucrière Sénégalaise, has successfully digitized payment for around 8,000 workers via a partnership with local fintech. “We wanted to digitize payments without using the banking system, which isn’t suited to some populations,” noted Claude Fizaine, the company’s Secretary General, in an interview with an African media outlet. “For employers, the benefits of digitizing payments include avoiding the constraints of managing large amounts of cash, and all the risks that distribution can involve. It also makes it possible to offer employees tools tailored to their financial and family situations, which can only have a positive impact on their personal and professional lives,” he added.
WAEMU’s innovations should continue to inspire the rest of Africa. Since 2012, it has been the continent’s engine for economic growth and stability. The examples of Senegal and its neighbours reinforce the ILO’s global agenda that could well make digital payments for workers a new global standard for promoting decent work.
Global Investments into Fintech Companies Plunged by Almost 40% amid Pandemic
The year 2020 was a challenging year for many fintechs. The global slowdown in funding caused by the COVID-19 led to a significant drop in the number of venture capital deals and brought uncertainty for many companies operating in this market.
According to data presented by AksjeBloggen.com, global investments into fintech companies hit $105.3bn in 2020, almost a 40% plunge amid pandemic.
US Fintechs Raised 75% of Total Investments
Fintech companies apply modern tech solutions in the financial services industry to offer digitally enhanced products and allow widespread access to financial products at a lower cost than traditional players. Over the years, these innovative startups transformed how people and businesses spend, invest, save, or borrow money.
Even before the pandemic, many fintechs found it difficult to access funding, as investors focused on established companies instead of early-stage businesses. Nevertheless, the total value of investments into fintech companies increased dramatically in the last decade.
In 2010, fintechs raised $9bn in funding, revealed the KPMG’s 2020 Pulse of Fintech report. By 2015, this figure grew more than seven times to $67.1bn. In 2018, the total investment value jumped to $145.9bn and continued rising to $168bn in 2019, as the record year for fintech investments.
After the COVID-19 pandemic brought many deals to a halt in the first half of 2020, H2’20 reversed the trend as investors and fintechs learned to do business in a new normal. Nevertheless, statistics show that last year witnessed 2,861 deals worth $105.3bn, almost $63bn less than before the pandemic.
The Americas were the region attracting the most investments in the sector, accounting for 75% of the total, or $79.2bn. Fintechs from the EMEA region raised $14.4bn last year. Asian fintechs followed with $11.2bn worth of investments.
The Number of Fintech Startups Doubled Since 2019
Although the COVID-19 affected the investment activity in the fintech sector, it also triggered a surge in the use of fintech solutions, creating a huge space for new companies.
The BCG data revealed the number of fintech startups worldwide more than doubled since the pandemic struck, rising from over 12,200 in 2019 to almost 26,500 this month.
As of April 2021, there were 10,738 fintech startups in North America as the leading region, up from 5,800 in 2019.
However, statistics show Europe, the Middle East, and Africa have witnessed even more impressive growth in the number of fintechs. In 2019, almost 3,600 companies were operating in this sector. Since then, the number of fintech startups in the EMEA region surged by 160% to more than 9,300.
Asia and the Pacific ranked third with nearly 6,200 fintech startups as of April, up from 2,850 in 2019.
Specta Records N100bn Consumer Lending Milestone
Online instant lending platform, Specta and PaywithSpecta, a digital credit solution introduced by Sterling Bank has disclosed that it has disbursed over N100 billion in digital loans and about N5 billion digital credits, respectively.
Both solutions make loans and digital credits available in less than five minutes to banked Nigerians, irrespective of their bank, without paperwork and collateral.
But above all, they are also the best in the segment for providing the best lending rates and interest free funding up to 90 days for online and offline purchases.
Divisional Head, Retail and Consumer Banking at Sterling Bank, Mr. Shina Atilola, in a statement made available to the press explained: “Specta has disbursed about N100 billion in digital loans in three years. It is an important milestone worth celebrating by a platform that revolutionised and opened digital lending space in Nigeria.
“PaywithSpecta, the digital credit solution extension of Specta has also exceeded expectations. In a few months, it has provided over N5 billion in digital credits to Nigerians.
“We are proud to be at the forefront of deploying innovative solutions that meet the needs of everyday Nigerians and small businesses. Our profound gratitude to our esteemed retail customers and business owners for their loyalty that has made Specta and PaywithSpecta the country’s undisputed market leaders in digital lending and credit solution segments.”
Specta, an instant lending platform that offers up to five million naira consumer loans in five minutes, was unveiled in 2018 by Sterling Bank Plc.
The lending platform uses proprietary data and analytics to process and disburse consumer loans to borrowers who belong to pre-approved communities in less than five minutes without paperwork and collateral.
The types of loans offered include personal, payday, wedding finance, rent, education, and medical finance loans, among others, to salary earners and business owners.
Following the success of Specta, Sterling Bank recently creed another variant of it known as PaywithSpecta to enable customers to pay for goods in instalments. At the same time, Merchants are credited instantly, thereby helping businesses to increase sales.
PaywithSpecta offers digital credit limits to customers to purchase items in-store at Merchant locations or Merchant online platforms. It also allows Merchants to access credit for their business activities.
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