Congratulations to our portfolio company Riby Finance Limited for being a recipient of the EFinA $2 million financial inclusion grant. This is a testament to the company’s ongoing hard work to drive the banked population significantly higher whilst building a strong and sustainable business.
At EchoVC, one of our investment theses is organizing the offline and then bringing the offline online. So we are always keen on partnering with businesses that can elegantly automate offline behavior. Group lending and savings is one of such behaviors. We had thought deeply about the best approaches to automating this and then we met Salami Abolore, the founder and CEO of Riby Finance Limited.
Salami has an unmistakable aura of passion, resilience and determination to solve the specific problems of the underbanked and unbanked using the existing group culture. Faced with a personal problem of financial management and access to loans himself, Salami created an offline group amongst his friends in a bid to encourage joint savings (and access to credit whenever the need arose), with the aim of promoting and digitizing savings, lending and investing amongst peers. This mission birthed Riby.
Riby distinctly operates in a highly fragmented marketplace of cooperative banking with the bulk of its target market being at the bottom of the pyramid. Starting with Nigeria, with less than 5% of adults having access to credit cards or bank loans, and 40 million people unbanked, Riby’s objective is to introduce and deploy the culture and practice of being banked to the millions of Nigerian adults currently financially excluded by allowing them to save, borrow and invest with ease.
Riby does this by strategically positioning itself as an aggregator platform where members of cooperative societies have a line of sight into their activities and can access short-to-medium term loans or grants from commercial banks, DFIs, development banks, not-for-profit organizations, etc, who, in the same vein, get high-value insights into disbursements of loans or grants to the final beneficiaries. As an example, one of Riby’s products has powered the group lending activities of a notable government entity enabling it to attain the status of being the second highest micro-lender in Africa.
According to EFinA research conducted in 2018, 75% of the adult population saved via informal structures (groups and cooperatives) and family and friends and 100% of the population borrowed from the same. While a lot has been done with regards to ensuring global financial inclusion, access to finance still remains a major inhibitor to economic growth. With at least 50 million adults in Nigeria being financially excluded, and a 4.3% credit penetration from banks in Nigeria, Riby has a large target market to which it can provide a viable alternative whilst championing the high-impact cause to increase financial inclusion.
We have always believed that in this nascent tech environment, industry winners in the near-term will be those who have chosen to first refactor rather than disrupt. Hence, by taking offline behaviour and replicating it online, Riby is not attempting change the decades-old tradition of communal savings but instead, optimizing and scaling it to ensure that its products are accessible and usable across the various age cadres and literacy levels.
We are incredibly excited to support Salami and the Riby team as they grow to become a centralised repository of financial data and a lending and savings platform for cooperatives and societies. We look forward to working together to onboard ten million unbanked Nigerians!