Unleashing Africa’s Economic Potential: Olugbenga Agboola on the Significance of Credit Accessibility.
Olugbenga Agboola, the CEO and founder of Flutterwave, believes that expanding credit accessibility is crucial to boosting African economies and helping them reach their optimal potential. Agboola’s Flutterwave, a company that processes transactions, allows users to send money to loved ones and friends for business purposes. Moreover, the company helps create local businesses and start-ups and makes and receives payments.
The CEO opines that the need for a structure and advanced consumer credit systems make it difficult for businesses to obtain credit. In countries like the US, entrepreneurs, and businesspeople often establish their credit profiles in their early adulthood. In doing so, they can create dependable and trustworthy profiles, making it easy to get credit. In contrast, many African country’s bureaucratic structures restrict business people from demonstrating credit reliability.
The growth of businesses in Africa is hindered mainly because of reduced opportunities for getting capital due to credit inaccessibility. Agboola’s motivation is making credit information more available to companies, and Flutterwave ensures it is achieved. For a company to increase its operation and growth, sharing its information correctly and replenishing its inventory makes it easy for lenders to verify and approve their credit applications.
More information and data are needed to ensure innovative lending in Africa. Contemporary credit bureaus depend on reliable data-driven credit scoring systems to help companies get credit. Lenders can reduce the risk associated with credit defaulting by having records of the applicant’s credit history, funds utilization, and payment history before making loan considerations for a business. Africa has the perfect opportunity to develop a very efficient financial system without going through the painful stages other continents had to go through.
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Agboola has established differences and successes in credit accessibility and operations of credit bureaus in Eastern Europe, the Middle East, and Asia. Agboola and Flutterwave have also found how these bureaus benefited from existing models in these regions.
It should be straightforward to move from a cash-based economy to a credit-based one, according to Agboola. Many Africans have used Flutterwave’s technology to establish enterprises, send money to friends and loved ones, and make and receive payments. Using credit progressively becomes a way of life, even as consumers become more knowledgeable.
Read more about Olugbenga Agboola on The Guardian
Flutterwave primarily operates in Nigeria, a country where cash is the most preferred payment method. Many people need bank accounts. However, debit cards are widely used in many parts of the country. Chip and PIN technology adoption happened in Nigeria before it was introduced in the US. Right now, the main objective is improving credit uptake, which will start by making data access more straightforward and easier.
There is a need for some African countries to start building credit bureaus from scratch. Those slightly ahead must expand their existing systems and accommodate clients with low credit profiles and micro businesses. In many African countries, consumers spend much of their money at small shops and kiosks. They could expand and attract even more customers if facilitated to obtaining credit.
Through the model of economies of scale, businesses can buy more inventory frequently at reduced costs and make sales at low prices, thereby making higher profits. ‘It is a transformative thing when business owners are enabled to get credit access through their mobile phones, ‘ Agboola says. He believes increasing credit access to credit is the ideal way to unlock Africa’s potential.