E-Financial
Cashing In On Mobility To Boost African E-commerce
Technology is helping to mould a more connected world, one where people are able to interact as they want or shop and transact in a way that fits their lifestyles.
E-commerce is one of the most significant innovations of our lifetime, and is helping more merchants connect with more consumers around the globe at a speed never seen before.
But, are banks taking this opportunity seriously and is enough being done to ensure e-commerce is not only supported but that transactions are secured?
The public and private sectors definitely cannot ignore the incredible possibilities the online ecosystem presents, especially when looking at the facts.
The African e-commerce market is forecasted to grow into a USD $50 billion industry by 2018 and this should come as no surprise considering that seven of the 10 fastest growing internet populations in the world are in Africa.
Ultimately the online ecosystem presents a unique opportunity for banks, as it is empowering more consumers who want to gain access to more efficient ways of engaging with their world, whether paying bills or planning the family holiday – but growth in the sector will be slow without real investment and resource allocation from financial institutions.
If you consider the penetration of the mobile device in Africa, and the fact that more people are shopping online via a mobile or table than ever before, it is clear that new technologies will help to stabilise and grow e-commerce.
Better infrastructure will however be needed to achieve this, including better internet connection.
Consumers are more willing to try new technology solutions, and with mobile penetration currently at over 85 percent and nearly half a billion Africans subscribing to mobile services, it is clear that this platform will help to drive growth through fresh opportunities.
The future for e-commerce is looking bright, with player’s local players revolutionising the e-commerce space by making the overall experience more efficient and secure for both merchants and consumers.
It is for this reason that Mastercard partners with leading organisations – such as Jumia and NetPlus – to build stronger and safer digital payment ecosystems that will allow merchants to grow their businesses and consumers to buy online with greater peace of mind.
Banks and financial service provider’s cannot afford to be left behind on the e-commerce journey and those that realise this potential and invest in developing and rolling out solutions that make it easier for Africans to purchase goods and services online without the hassle and danger of cash will undoubtedly reap the benefit.
Over the past 12 months more banks have looked to mobile than ever before as a tool to connect with their customers, allowing them to transact like never before.
In a short while, many of these mobile banking apps will carry Masterpass QR, a mobile solution developed by Mastercard to streamline person to merchant payments by working to overcome infrastructure challenges – and giving them a smart way to pay in-store and in the near future, online.
That being said, there are still of course challenges facing the online retail sector on the continent. A major hurdle for the rapid uptake of e-commerce for instance is the cost of broadband.
Even as the footprint of reliable connectivity as well as the general speed of connections increase across the continent, pricing still remains a significant barrier to getting more and more households adopting broadband internet connectivity.
Additionally logistics, including unreliable postal services and frequent electricity outages are a major obstacle to overcome. There is also a real need for more secure payment options for consumers given that cash is still widely used by consumers as well as e-retailers. It is estimated that between 65 and 95 percent of all online purchases are paid using cash on delivery indicating that consumers remain hesitate to pay online.
However, digital payment solutions will help curb this hesitation and meet the needs of both the consumer and the e-retailer, removing the risk of carrying cash but also the inconvenience of not having the correct amount available when your package is delivered.
Who would feel comfortable carrying large amounts of cash around waiting on your new pair of sunglasses to arrive after your weekend online shopping spree, this just does not make sense and consumers are rightfully demanding more from their favourite online stores.
Partnerships like those being developed by Mastercard is helping to educate consumers but also provide solutions that allow them to be more secure when online, and also gives them some sense of control over the process.
In order to grow and develop the e-commerce sector, all stakeholders especially the banking sector must work to remove cash from the online sector and replace it with digital solutions using the latest technology.
E-Financial
Fidelity Bank Reports N124.3Bn Pre-Tax Profit for 2023
Fidelity Bank Plc has recorded a profit before tax of N124.3 billion for the year ended December 31, 2023, indicating a 131.5 per cent increase from N53.7 billion posted in the 2022 financial year.
The bank disclosed this in its 2023 full year audited financial statement issued to the Nigerian Exchange Ltd. (NGX) on Tuesday in Lagos.
Fidelity Bank said it would also pay investors a final dividend of 60k per share and a total dividend of 85 kobo per share for the reporting period.
This represents a 70 per cent increase compared to the 50 kobo per share paid to its shareholders in the previous year.
The financial institution stated that this led to an increase in return on average equity of 26.5 per cent in the year under review from 15.6 per cent in the corresponding year.
According to the financial statement, the bank’s gross earnings increased by 64.9 per cent year over year to N555.83 billion.
The bank stated that this was driven by 81.6 per cent growth in net interest income which increased from N152.7 billion in year 2022 to N277.37 billion in the 2023 financial year.
This led to a profit after tax of N99.45 billion, representing a 112.9 per cent annual growth.
Commenting on the performance, Nneka Onyeali-Ikpe, managing director of Fidelity Bank, said the financial institution closed the financial year with strong double-digit growth across key income and balance-sheet lines.
Ms Onyeali-Ikpe stated that the bank’s performance in 2023 was an attestation of its capacity to deliver superior returns to shareholders despite the difficulties in our operating environment.
She said, “A review of the financial performance showed that the bank grew its net interest income by 81.6 per cent to N277.4 billion. This was driven by a 55.5 per cent increase in interest income, thus reflecting a steady rise in asset yield throughout the year.
“The average funding cost dropped by 20bps to 4.4 per cent due to increased low-cost funds that grew from 83.6 per ent in 2022 to 97.4 per cent in 2023.
“The combination of higher asset yield and lower funding cost led to an increase in net interest margin of 8.1 per cent from 6.3 per cent in 2022 financial year.”
According to her, the total customer deposits crossed the N4 trillion mark, as deposits grew by 55.6 per cent from N2.6 trillion in 2022.
She noted that the increase was driven by 81.1 per cent growth in low-cost funds.
Mrs Onyeali-Ikpe explained that despite the challenging operating environment, the bank reaffirmed its devotion to helping individuals grow and inspiring businesses to thrive.
She said the bank also committed to empowering economies to prosper by increasing net loans and advances to N3.1 trillion from N2.1 trillion in the 2022 financial year.
The managing director stated that despite the growth in its loan portfolio, regulatory ratios were maintained well above the required thresholds.
Mrs Onyeali-Ikpe noted that the bank liquidity ratio stood at 45.3 per cent in the year ended 2023, from 39.6 per cent in the year 2022, while the capital adequacy ratio rose to 16.2 per cent, compared to the minimum requirement of 15.0 per cent.
“We recognise the changing dynamics in the Nigerian banking space and the need to monitor and proactively manage evolving risks. The proposed final dividend of 60 kobo per share reflects our commitment to strong value creation and returns to our shareholders.
“Fidelity Bank has consistently paid dividends since 2006,” she said.
E-Financial
ClaimBuddy Bags $5m to Streamline Insurance Claims for Hospitals, Patients
ClaimBuddy, insurancetech startup has raised $5 million in its Series A funding round led by Bharat Innovation Fund (BIF), with participation from Japanese VC firm CAC Capital, Chiratae Ventures, and Rebright Partners.
The Delhi NCR-based startup plans to utilize the capital to enhance its tech infrastructure, onboard skilled talent, and diversify its product offerings.
Founded in 2020 by Khet Singh Rajpurohit and Ajit Patel, ClaimBuddy aims to streamline the insurance claims process for both patients and partner hospitals through its digital platform.
ClaimBuddy has already assisted over 35,000 patients and collaborated with more than 250 hospitals nationwide, establishing itself as a comprehensive solution for medical insurance claims.
CEO Rajpurohit expressed confidence in leveraging the investment to introduce innovative financial tools and further improve healthcare experiences. ClaimBuddy’s focus aligns with addressing fundamental issues in insurance claim settlements and patient experiences, as highlighted by BIF’s Ashwin Raguraman.
ClaimBuddy faces competition from other insurtech startups but aims to disrupt the Indian insurtech sector, which is witnessing a surge in digital-first solutions and increased investor interest.
The Indian insurtech space is projected to be a significant segment within the larger fintech opportunity by 2030.
E-Financial
Recapitalisation: UBA Seeks Shareholders’ Nod to Raise Capital
United Bank for Africa (UBA) has said that it will seek shareholders’ approval at the company’s 62nd annual general meeting (AGM) to raise capital.
The AGM is scheduled to be held on May 24.
UBA disclosed this in a statement filed on the Nigerian Exchange Limited (NGX) on Monday.
The development is coming after the Central Bank of Nigeria (CBN), on March 28, directed commercial banks with international licences to raise their capital base to N500 billion, while national and regional financial institutions’ capital bases were pegged at N200 billion and N50 billion, respectively.
UBA said the board will propose the capital be raised in the Nigerian or international capital markets by way of public offerings, private placements, rights issue or other transaction modes.
The bank said the decision to raise the capital is subject to regulatory approval after consent from shareholders.
According to UBA, the instruments “can either be as a standalone issue(s) or by the establishment of capital raising programmes, whether by way of public offerings, private placements, rights issues and/or other transaction modes, at prices, coupon or interest rates determined through book building or any other acceptable valuation method or combination of methods, in such tranches, series or proportions, within such maturity periods and at such dates and upon such terms and conditions as may be determined by the board of directors of the company subject to obtaining the requisite approvals of the relevant regulatory authorities”.
The company said the board would also propose increasing its issued share capital, from N17,099,710,683 to N22,500,000,000.
UBA, with a capital base of N115.82 billion, needs to raise N384.19 billion to meet the minimum capital requirement for international licence holders.
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