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Nigerians lack credit culture-Kwikpay MD, Gbemi Adelekan

Nigerians lack credit culture-Kwikpay MD, Gbemi Adelekan

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Gbemi Adelekan is the MD/CEO of Trafalgar Group. He studied at both the South Bank University and the University of East London, United Kingdom. For more than 20 years, he was into finance business both in Nigeria and abroad. He later set up Trafalgar Group. The firm provides business support for traders and salary earners via Kwikpay. He speaks with OVWE MEDEME about his foray into financial services, business in Nigeria and sundry issues.

When did you first get the vision to set this up?

This was about four years ago. I was talking to a couple of people, and what they told me was that a lot of them were in employment. They came to say that their salaries were due at the end of the month but something came up so they needed assistance. Abroad, when you need assistance, you either have your credit card, or you have businesses around that would be able to assist you, provided they know you have a full time job that you get your salary monthly.

I realized that we don’t have something like that here. Then, when we started, we had like two or three companies that had only just come into the system then. So, we decided to set up something small, know our customer more and interact with them closely. And because of that, most of our customers had never been to our office. So because of these people coming to me then, I was able to speak with people around me to set up something like this. So they asked me to anchor it. I had to leave everything to grow this business.

What exactly is your business purview?

We help people to meet their needs, whether financial or in other areas as well. The company was set up about three years ago and we just realized that there is a niche in the society where people need to get financial assistance. Something can come up as an emergency. Something might have happened. Maybe a medical bill for the wife, they can’t go to their banks to get an overdraft because it takes a while before some of these banks are able to process documents for credit. So all we basically do is to be able to meet the need of our customers as quickly as possible

You have been running Kwikpay for the past four years. How has it been so far?

Where the company is set up, we have a lot of businesses around, and we have a lot of corporate organizations around as well. When it was set up, what we said we were going to do was to go to corporate organizations to see whether we could assist some of them if their workers needed funds quickly, instead of them dipping into their working capital by giving IOUs to their staff, we would take that from them. That was the plan and we signed up a lot of hospitals, and schools. A lot of private organisations keyed in. But as we continued the business, we realised that there are other people that we didn’t even think of, people in salaried employment that need finance quickly come to us and we’ve been able to model our products to meet those needs. But in addition to that, because of where we are, we have a lot of markets around us. What we’ve been able to do is to be able to call some of these market people in to say ask what their needs were. We found out that a lot of them, in terms of financial literacy, are not aware. They need funds, but they don’t really believe in banks. So what we’ve been able to do is to design a product for them as well, whereby we give them funds and weekly, they are able to pay us back, just to assist their business. So, that’s what we’ve done in the last three years.

How do you guarantee that they will pay back?

Nigerians don’t have a credit culture, but because of the way we are set up, we are quite conservative. It is not by force that we give people money. Out of 10 people that come through the door, we only give one or two. What we do is, we make sure we analyse them. People coming to us, especially the business people, we want to develop their business for them. That’s why I mentioned that we give them like a financial literacy talk to say that this is what they should do. It is better for you to grow your business rather than be dipping into your capital. And at the end of the day, an obligation is an obligation. It’s not like when you collect money, you will now come back to say that you are not able to pay. We do a lot of checks in terms of people that we give money. What we do is we make sure that the Human Resources is involved. For those who don’t want their HR involved, we ask them to bring someone who can stand as a guarantor and we will do a research on those people as well. And if they are able to meet our requirements, fine. Currently, we are trying to use technology to develop the business by using algorithms. We do a lot of checks even up to the people they are associated with in their social media. That is where we are going in terms of knowing those who are serious about obligations.

How technologically inclined is the business?

We are talking to a group of technology companies so that we will be able to automate a lot of our process and make it easier for people to apply. With consumer finance, you need to be able to meet needs as quickly as possible. When you come in through the door and you submit all our requirements, within hours, you are able to get your funds. So in terms of all the checks that we need to carry out, we are registered with the credit reference agencies. They will be able to check whether the person has defaulted in a loan before now. In terms of the algorithms we are trying to design with the tech companies we are working with, those checks would be carried out for people to be able to apply even with their phones. Those are coming in hopefully before the end of the year. Currently, people can apply online. We’ve got our website which is quite interactive. They are able to send in their request and we will be able to get back to them. But we want to improve on the process more, so that even when we are telling people that we do it within 24 hours, we want to do it within three hours, to be able to say that they will be able to get their funds.

How is the company being financed?

I’ve got a group of investors that work with me, so for my investors, I need to pay them their returns, and that is what we use. We don’t take deposits from customers.

Have you had any experience with loan defaulters?

With this type of business, there’s no way you can’t find them. Out of 10 people you give a loan to, you still have like one or two people that are just impossible. Yes, we’ve had experience of people being given money and they came back to say they were not able to pay because of one excuse or the other. But we’ve got stages. What we do is, we take it to the organisation that the person works in, from there, we take it to the authorities. We also lease them on other credit agencies so that in the future, there’s no way anyone will give them a loan because that is what they will use to check whether they are actually credible or not. So as soon as we put these checks in place, they come back to pay, even though it may not be during the tenor that we gave them. We’ve had situations where some of them have even relocated out of the country. In those cases, there’s nothing we can do.

Did the recession in any way affect your operation?

It did because people are always very careful when it comes to credit during a recession. Most of the credible ones will tell you that because of the recession, they don’t know what is happening to their jobs, whether they will still be there in the next year. So even when they come for a loan, they just take it for short term; maybe for a month or two, where they could have taken for as long as six months. Our products are for short term needs. We don’t advice people to come to us when they need money long term. If they want that, they can wait for their banks to approve something which takes a longer process. So there’s a niche that we are chasing. It is that category of customers that we target.


The post Nigerians lack credit culture-Kwikpay MD, Gbemi Adelekan appeared first on The Nation Nigeria.

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