Stonewalling Wallet Adoption.


If you can remember a company called zoto. I lost about #89k and they have govt license to operate. One morning their app won’t accept login. That’s how it started. The government did nothing. They took people’s money and vanished..

So-called Digital Banks have been opening left right and centre in Nigeria in recent times.

Some of them are Kuda, ALAT (by Wema), Rubies, PiggyVest, Cowrywise, etc

They are drastically more convenient to deal with than traditional financial institutions, with many of them offering loans that you can access in three minutes once you are qualified without any collateral required,or having to make any physical visit to any office anywhere.

Many of them also provide what is called an Electronic Wallet where you can transfer a lump sum to – either as investment or to utilize gradually for things like mobile top-up or TV subscriptions.

If you are into the Money Transfer / Mobile Money business, the Wallet serves as a depository from where you transfer money to / for your customers (usually for transfer rates that are far less than what you find with commercial Banks).

Just like many people have complained about, the interest paid by outfits like Carbon (like 10% -16% / annum) is laughable -viz-a-viz the astronomical interest rates charged ranging from 60% – 360%/annum.

In an inflationary economy like what we have in Nigeria currently, locking up your money for a period of time for such paltry returns is simply financial illiteracy. The interest earned on your fixed money must be more than the inflation rate for this to have any meaning.

There is a consideration stopping me from making an investment in any of these digital banks:

I am still not 100% convinced that a Carbon, PggyyVest, or whatever .. is as secure as a GTBank – for instance.
I guess that is a psychological barrier that can only be self-demolished, but the experience of what happened in the past where financial institutions will simply go under and nothing happens and people lose their money has made a lot of people really wary and cautious about where they place their hard-earned funds .

It is of course true that any financial situation anywhere can collapse but the truth here is that a more established brand that has been around for a while will likely just fizzle out overnight.

If a Digital Bank suddenly fizzle out the way ZOTO did the other time who exactly am I going to hold responsible?

I recently wrote about my experience with Opera’s oPay where my money got stuck on their platform for about 72 hours before it was eventually released. such scares do not the engender confidence in all these startups..

In order not to be penny-wise and pound-foolish, be very careful where you park your money so that the big bad wolf do not make mincemeat of your sweat.

Like a brother used to say,

You should be more interested in the returns OF your investment, other than the return On the investment

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