SEMINAR RECAP ON THE TREASURED ENTREPRENEURS ASSOCIATION TEA HALL OF WEALTH GENERAL ACTIVE GROUP PAGE
👉🏼Theme:
❤ Online Banking Business in NIGERIA
🎤SPEAKER/FACILITATOR/DISCUSSANT
🗣Mr Abe Sam….
Good evening ladies and gentlemen of the Treasured Entrepreneurs Association…
How has your day been sir/ma???
Great I guess my people???
If so!! Glory be to God Almighty…
The topic we shall be looking at tonight is not a strange one.
The business model is almost everywhere now.
Like I used to say, if a business is not a profitable one, why do we have exodus of people trooping into it on almost daily basis?
Alright, I’m to share some insights with us on the topic;
(Online banking) + (Business)A brief definition/explanation.
Online money transfer is another way of saying Internet enabled banking system in which money leaves the bank account of a sender (upon some programming commands) to a receiver’s bank account.
Let me share this brief storyline (experience) with us to drive in my point.
Few years back during my NYSC, I was posted to Jigawa State. And after the 21 days orientation camping, I was mobilised to a local govt called Ringim.
Getting there for my 11 month primary assignment, we were welcomed by some older folks who had stayed in that town for a while.
One of the shocking news that was difficult for me to understand was the fact that the town practices Sharia…and that, they don’t want anything called western.
In this town, as at then, there were no power grid (ie. NEPA), no commercial banks, no conventional schools,…
They just want to remain in the dark and isolate themselves from the growing world.
Now, my issue is not about their choice of life BUT how I (a confirmed Lagos boy 😀) will live in such a cave and isolation for a whole 11 month!
It means for my entire stay there, I won’t see light except I use Gen…and secondly, to even access my own moni (alawee) na war
Considering this situation, …necessity became the mother of invention!
Now, this is a typical situation that brought about the business aspect of the Internet banking system in that town that year.
This is so because people needed to make monetary transactions meanwhile the banks are no where near.
This became a necessity.
Then, Págà, pocket money, quick money were very much prominent.
So I opted to calve a business out of the situation.
So what is this Internet banking business model about?
The business in the situation is that you get the necessary affiliate approval from the financial institution then you position yourself as an agent in your community and on your street.
With this, your are bringing the bank to the people within their easy reach.
Not just that, getting the necessary affiliate approval will mean that you get some awareness items like flyers, banners, sometimes kiosk…all to help you get the necessary branding for your retail business
The good thing is that different companies have different affiliate policies.
While some will require that you be a registered entity with the corporate affairs commission (ie. CAC), others may just require that you have and run a functional account with them.
The benefit of operating an affiliate account is to help retailers accrue better profit.
Now let’s do some analysis.
Let’s look at how these mini-kiosk-banks make their money.
When I say mini kiosk bank, I’m referring to those people you see on your streets that helps people who couldn’t get to the bank to complete some monetary transactions.
The way they operate is that someone who wishes to withdraw some money walks up to their shop. You tell them how much you wish to withdraw and they tell you how much they charge per ₦1,000.
Some charge ₦100 on every ₦1,000, others may charge more.
The rate these agents charge is dependent on how much competition there is in there business vicinity.
Even in an area where you are the only one, you may charge ₦150 or even ₦200 during special days and festive times.
Now there are different angles in which different people venture into this business.
You’ll see some of these guys with POS of some banks.
The wise ones doesn’t even border to go that extra miles…because the banks won’t allow you to enjoy the fruits of your labour easily.
Their commission on POS is outrageous to manage for a growing business. Because if you charge a ₦100, the sọ called sponsoring bank will automatically share the profit with you.
Also, there are other hidden charges and their maintenance fees.
So putting these hiccups all together, some of these guys would prefer to operate directly from their account.
Yes, the POS is good if you have it. People will trust you adequately. You won’t go through the stress of asking them what their bank account is and what banker they are using.
With POS, customers just walks in, you give them the POS, they insert their ATM, then punch in their pin and boom…the debit it made.
This is indeed a great way to do the business BUT when you consider the way the banks will be smiling on your own efforts because you are using their POS for your own business, you will almost be close to tears 😀
So how do you thrive in this business?
Environmental study!
Or you call it…
Feasibility study!
This business may be profitable but requires careful study of the area you want to establish.
Ask these questions.
- Are there banks around? If yes, please flee because you won’t see desired customers.
- Do you see people already pitching their tents on the same business model in the area? If yes, please flee and find another area because competition disrupt the business a lot.
While you are charging ₦100, your competitors may want to play smart by charging less.
Another thing you should immediately begin to consider once you are able to endorse a place is to immediately saturate that environment with your brand.
Don’t waste time because it seems that is the working logic of the business.
Open one, and within short interval, open another branch around, then another then another.
With this strategy, competitors would be readily intimated to contend.
A guy in my area has like about 4 branches on 4 different streets in my environment.
I’m very sure he too is trying to apply the dominant strategy to chase away some cheap harvesters.
Lastly, on the strategy, it is important to note that this business requires you to have some capital for ;
- Registration with CAC
- Registration as affiliate
- Securing a POS with your choice bank
- Start up capital (say ₦50k)
The business is a number game. It thrives if it’s located in a place or on a street where people will have to board a bike or cab or kèké to get to the nearest bank.
If your area is located in such a way that the travelling cost is up to ₦50-₦100 before one gets to the nearest bank then the Internet banking business may thrive there.
…it may thrive on your street because what will be the point of travelling to a distant bank if I can as well withdraw/transfer money on my very street through an agent at the same cost?
For a start, If you have an average of 10 customers in a day; and your charge per ₦1k is ₦100. Then that’s ₦1000 profit on your ₦10,000 in just one day!
Please which bank can afford to give you ₦1,000 interest for just ₦10,000 in your account in a day?
If you have a business that is fetching you a thousand naira on every ten thousand naira in a day then that business is a good business.
Mind you, that’s just 10 customers ó.
In a while, after you are being known in the area, the customer base will sure skyrocket.
But I like being realistic…a more reason why I started with just 10
What is our take on this business?
With that I’ll like to take a bow!
Thanking you for sharing your precious time with me. I hope the chat is worthwhile.
God bless Nigeria
God bless TEA
God bless us all!
TREASURED ENTREPRENEUR ASSOCIATION 