It's Christmas again, and everyone is out getting gifts for friends and family. For many people around the world, the biggest concern is what to get that nephew or this sweetheart this season. Yet still for a few others in countries like Nigeria, where electronic payments have not penetrated deeply, a major concern is how to manage the cash requirement of the holidays. The Holidays are auspicious enough that even bankers are allowed to go on this one. Thus, there is a slowdown of financial services when you need financial services the most. Businesses have the unenviable task of managing the risk of holding onto large amounts of cash during banking holidays.
Desola is worried about long queues at ATMs during the Yuletide. She is considering making a cash withdrawal for all her projected expenses during the festive season. One look at her budget, however, makes her think twice about such a move, as the security situation in Port Harcourt does not give Desola enough confidence to carry around that much cash.
The ATM penetration in Nigeria is very low. According a study by the Nigerian Central Bank, there are 17 ATMs for every 100,000 persons. The number of available ATM cash points is not enough to meet the demands of holiday shopping, and the available few are distributed with a bias to urban centers.
On the 1st of December, 2017, Kpolom, a financial technology startup, created a cash back service to address this massive challenge. The app uses GPS services to map the locations of ATMs and Kpolom service providers to users who need cashback services. These users can get cash from businesses who need to reduce their physical cash, and the businesses get a bank deposit made electronically.
Kpolom plans to give their users access to a cashback service provider every 10km (or roughly six miles). This could not be coming at a more opportune time - with the Yuletide celebrations upon us there is bound to be a strain on financial service providers. The demand for financial services tends to escalate during the holidays, when, ironically, the financial institutions are slowing down for the year. Innovative products such as these are bound to help stem the tide for the season and all through the year.
It is the goal of every startup to grow into a large corporation. In fact, that is the difference between a startup and a small business. The ability to scale and replicate a proven business model into new markets geographically and along its own verticals is a key determinant of a successful startup. Kpolom is no different; they are looking to tap into the banking deficit in sub-Saharan Africa. A huge number of Africans, who make up at least 20 percent of the world's population, are unbanked. Kpolom would be looking to tap into that market, providing financial services to what can easily become a goldmine for its investors.
Currently, Kpolom is live for users in Port Harcourt, Nigeria for the winter holidays, with plans to expand its services to other major cities in southern Nigeria in the coming months.