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Mr. K, AI & machine learning robust financial services virtual assistant launches in Nigeria

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  •  Mr. K is one of the most robust financial services virtual assistant around

KiaKia team, has introduce ‘Mr. K, KiaKia’s AI and Machine learning powered alternative credit scoring, customer service, Direct and P2P lending virtual agent.

Mr. K is credited as one of the most robust financial services virtual assistant around.

In a blog post, Co-Founder at KiaKia, Olajide Abiola said the team’s delight isn’t in leading in the creation of something innovative or unique, but about the mileages of modest impacts accomplished up to this point in the last one year.

“We are delighted that a year of patient, meticulous and diligent research and development has culminated in the birth of an efficient model of alternative credit scoring and lending, driven essentially by behavioural biometrics, data analytics, machine learning and Artificial intelligence.

How the idea was conceived 

Going memory lane on how Mr. K was arrived at, Abiola recalls: “In November 2015, we (the 3 founding team) firmly decided on the simple mission of making personal and business capital easily, quickly and conveniently accessible by millions of Nigeria’s underserved through the innovative use of technology. A decision that had taken over a year in the making.

“Three friends and associates from different academic backgrounds and careers came together with experience cutting across the Military, Software development, system design, data analysis, Sales, Business, IT Education, Financial Legislation, Technology, Betting and manufacturing. An unusual combination of professional pedigree that didn’t particularly indicate the conventional fit for the mission we had decided for ourselves to achieve.

“In all these, we were by no means deluded as to the price this goal would demand, as we had mentally prepared and meticulously simulated broad scenarios of possibilities. Most importantly, we were ready to learn. To learn right, learn fast, and transmute these into application.

The ambition was, and still remains, to help credible working adults and SMEs in the real sector access credit. We weren’t and still aren’t on any mission to save the world.

Worried about financially underserved Nigerians 

“To us, it is simply a disturbing reality that millions of credible individuals and SMEs remain financially underserved in spite of the huge amount of private and corporate monies in the financial systems across Africa. Being keen observers and people very familiar with the realities ourselves, we understood the situation and realities beyond the staggering arrays of statistics often reeled out in ritualised manner by development finance organisations and their likes.

“We sought to understand the real and factual underlining problems beyond classroom philosophies and expertise rhetorics and smart clichés by which they further become victims of professional egos and petty intellectual politics.

“Why couldn’t millions of working banked adults accounts access meaningful credit?

“Why couldn’t millions of SMEs access short term cash advances from their respective banks?

“Why does it seem getting the UNBANKED into the BANKING System is more important and prioritised than appropriately serving the Underbanked/Underserved?

“We were never hounded by the sense of haste to quickly develop a product and go to market. We wanted to really understand the real problems practically, reasonably and more sensibly. Serious caution against the danger in the false velocity of quick fixes was well taken, and the ample sense of discipline was exercised by the team.

What policymakers makers in financial sector are missing

“It is amazing how policymakers and stakeholders in the mainstream financial sector and the financial inclusion efforts have for long and so often overlooked the simple fact that the problem of financial exclusion seem to have defied solutions, or at best gain marginal tractions of successes because owning a BANK account isn’t inherently incentivised with appropriate services to justify why the UNBANKED should be encouraged to get into the financial system. Generally, at the moment, the only benefits enjoyable by over 90% of bank account holders are rudimentary banking services as cash deposits, physical and ATM withdrawals and funds transfers.

The economic and financial activities of most of the UNBANKED population restricted, mainly to their geographical locations with ample safety for their funds and transactional trust.

“It was understood that to solve the problem of minimal to outright lack of access to credit, it was pertinent to build a unique model of risk assessment and lending around the behavioural and cultural peculiarities of the African market consumer in order to deliver something truly feasible, workable and functional beyond satisfying the sentiments of necessity and pride in successfully applying home grown solutions to local problems.

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“It was well understood as well that technology as is often wrongly thought, is not the silver bullet to a lot of problems, but an enabler of solutions, being wary of following the bandwagon in hastily applying technology to problems not properly understood. To achieve this, focus was given to how to source high quality raw material, which in our case is data. Relevant, quantitative and qualitative data to build the right datasets for an efficient and effective predictive and risk assessment algorithm.

“Next, we set out conferring with professionals and experts across the broad spectrum of the financial sector with a view to enriching our insights to better enhance the solution being proposed. Simultaneously, we were pitching the idea with likely investors, all of who commended the novelty of the idea and plan but reluctant to commit capital at the time.

“To them, anything that had to do with remote and virtual access to credit, especially in excess of anything beyond micro in a country like Nigeria was practically impossible, and more worse, considered a risky backwater that must not be touched with a long spoon. In fact, the idea was considered too risky. Anyway, this didn’t deter from proceeding in taking out the appropriate license for the business. It is pertinent to note and state categorically here that KiaKia is not a Bank. We do not take deposits from the public and do not provide savings services. We are also not funds manager.

Against all odds

“With no investor willing to commit capital to kickstart, we had to follow our own philosophy of “putting our money where our mouth was” by tapping into our personal savings and making a commitment to bootstrap. It was reasoned that if this was an idea backed by the conviction on the strength of inherent functional viability and real market opportunity, there should be neither hesitation nor reluctance in investing personal capital.

“Voila! we cleared our own doubts. While we were at it, a friend of the team in the diaspora got wind of our plans, and without any investment solicitation, offered to be an Angel investor. Our protest to the proposition was instant. She persisted with the offer for weeks before finally accepting, but not without some disclaimers. We interrogated, “are you aware this is a risky venture in which all capital could be lost?”, she confidently retorted “I know how business works”, “If it fails, we will do something new”, “I trust and have confidence in you guys”. Never had so much trust, faith and confidence been firmly and assertively communicated to my hearing.

“Development began in earnest in February of 2016, and by the first week of July, an MVP, a beta web version of our service was rolled out after some few weeks of false starts prior to that. A lot of people had expected us to have adopted a Mobile first strategy, as that often seems the general sentiments here in Africa. We elected to think and act otherwise for some rational reasons.

The model

“Firstly, a much broader approach that will increase quantitative data collection for a more robust and improved analysis, research and development was required.

“Secondly, majority of Nigerian adults (especially millennials) and SMEs had never accessed any type of formal loan. In fact, according to broadly available data, over 80% (Not our stats). So, it was considered a poor approach creating a casual loan application process/experience similar to how virtual betting or gambling is performed, as this will minimise the behavioural sense of responsibility and commitment that ought to go along with a financial contract defined for which future repayment obligation was expected. The role of psychology to financial behaviour is too crucial to be ignored.

“Thirdly, we needed to capture data in a repetitive manner in order to enhance and enrich the datasets for behavioural mapping and structuring, which forms a vital component of our proprietary alternative credit scoring and risk assessment algorithm.

“After five months in Beta, we rolled out fully on December 1. The same week the first seed investment was secured. Something we would definitely consider as an acknowledgement of our huge commitment, immense capabilities and modest results. It had been demonstrated with some measure of proven result that the value proposition of KiaKia was real, functional and practical. The KiaKia algorithm could identify and determine borrower character and creditworthiness.

“There is unanimity in agreement that an excellent performance the first, second, third, fourth, fifth, sixth, seventh, eight, ninth and tenth time might be considered a fluke, but the supposition of fluke cannot be associated with several hundreds of satisfactory outcomes directed by organised planning, input and execution.

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“As of today, tens and tens of millions of Naira in loans have been successfully granted to and repaid by hundreds and hundreds of borrowers across 22 States of Nigeria, with a Loss/Default/NPL ratio of below 2.3%, consistently maintained over a 12-month period. Stable results over an appreciable period has exceeded the scope of beginner’s luck. And the most fascinating aspect these results is that, numbers don’t lie. These very modest results has signalled and proven the feasibility of homegrown solutions.

At the time of setting up, a lot of people had expected us to go about things the conventional way, launch quickly, rapidly rack up some vanity metrics (It does give the good feelings anyway), hug the limelight, and hastily covet the commendation and verdict of the tech media community as the next big thing.

“Rather, we opted for the steady, diligent and sure path which has enabled us to build a solid foundation upon which we are now in good stead to scale rapidly, with reasonable predictability of success on a large scale. Slow and steady still does it.

“The proverb hasn’t expired with time or modernity. In all these, it is important to mention that KiaKia’s growth to date has been driven mainly organically, with the aggregate marketing, sales, adverts and publicity spend of less than $1,500 in one year. KiaKia has enjoyed the unquantifiable goodwill of the community of loyal customers, friends and partners to genuinely thank for its organic growth through their unflinching loyalty, word of mouth referrals and testimonials.

“At this point, it won’t be out of place to highlight some unique and pioneering strides KiaKia has made, no matter how modest. It is noteworthy to mention that KiaKia was the first and the only lending fintech granting loan sizes above N200k ($547) to borrowers virtually and remotely, without any form of paper work or physical meetings. We took it notches higher by granting loan size ranges of N250,000 ($685), N500,000 ($1400), N1,000,000 ($2700), N1,500,000 ($4100) and N2,000,000 ($5,500), entirely online and in real time. By all conventional Nigerian thinking, these amounts are considered outrageously risky to disburse to typical Nigerian borrowers without having any form of physical meetings.

“The emphasis here is on the sizes of loans in relation to absence of physical meetings or paper documentations. Don’t take our word for it because it sounds plausible or articulate, verify the veracity. To KiaKia, of what use is a system touted as effective and efficient at identifying creditworthiness and credibility, and ensuring safety of lender capital without pushing it to the limits? This is no swanky talk, but a confident citation of modest achievements supported by facts, which is worth giving mention because it highlights something significant in Nigeria’s financial ecosystem. Come further on our journey. Don’t get bored yet. If we don’t tell our story, who will?

“Before all these, KiaKia had quietly achieved firsts in a few other areas. KiaKia pioneered real-time, same day loan application and disbursement here in Nigeria. Let me explain this in detail. While others delivered Micro-loans within 24 to 48 hours, we delivered same day, between 15 minutes to 2 hours depending on loan size and borrower digital savviness. The records and timelines are indelible.

“We know pioneer accomplishments are only as good as the records they represent, but it still helps to state it, especially in a society that has a poor record keeping habit. We also pioneered customised loan offers instead of imposing inflexible amount and tenure as others did.

“Let’s just say, we did to online lending, what Glo did with flexible per second billing. Also, over a year ago, when KiaKia mentioned its use of digital forensics and proprietary risk assessment algorithm, it was considered empty tech sloganeering by some.

“We didn’t cut the academic and professional background of those stereotyped to such big tech buzzwords. But here we are today, to our credit, the Nigerian Farmer’s Group, a millennial oriented farmer’s cooperative is a huge success story. Schools, retailers, food vendors, pharmaceutical operators, solar entrepreneurs, startups, healthcare providers, commodity traders and suppliers, printers et al from across the country are thriving because we were able to utilise our proprietary system to uniquely identify their credibility and creditworthiness, and granting them access to capital in the process. We will continue to not just diligently take our time to get it right, but always be on time to serve our people right. This is our value proposition.

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Mr. K ushers in new era

“With the launching of Mr. Kwe usher in a new era of alternative credit scoring and risk assessment, customer service, direct and peer to peer lending, powered by data analytics, machine learning and artificial intelligence, all on a single platform and through a very friendly interface and end to end user experience.

“Through Mr. K, we are hoping to further drive down the interest rate for unsecured loans. KiaKia has always offered the most competitive interest rates for unsecured loans from between 8% to 24% for 30 days, depending on the borrower’s kiakia proprietary credit rating, while our competitors have a going rate of 30% flat for 30 days. In fact, 80% of our high scoring borrowers access these same loans at between 7.5% and 15% as against the 30% of our competitors.

“KiaKia is also the only lender that offers duration flexibility, in that borrowers could choose the exact number of days between 7 and 60days for short-term loans and are charged interest only for such number of days, unlike others who charge flat rates. Through our peer-to-peer, we have been able to connect credible borrowers with lenders offering loans as low as 5.5% interest rate for longer tenured loans.

As Mr. K ushers in a new vista of boundless opportunities of financial inclusiveness for millions of Africa’s financially underserved, we are promising our existing and prospective users a new era of responsible access to capital. Access to capital that is geared at liberating them financially, helping small businesses differentiate and grow, rather than sinking them under the crushing weight of debt.

“Credible users will always be gold to us as they have been over the last one year.

The modest strides KiaKia has made to date wouldn’t have been possible without the assemblage of incredible individuals that constitute the team. The level of spartan discipline, grit and commitment always brought to bare is immeasurable. Immense credit also goes to our unique investors, who have consistently demonstrated faith and confidence in the team’s potentials and capabilities.

“This is followed by the thousands of KiaKia’s valuable and credible customers who have consistently kept faith with the company as it navigated through small and expectedly imperfect beginnings; who exercised patience and understanding as thing were tweaked here and there to enhance and improve the user experience, quality of service and enrich our knowledge in serving them with more efficiency and improved value delivery. They are the reason KiaKia has gained the few performance mileages covered thus far. These credible customers represent great hopes for Nigeria and Africa’s success in financial inclusiveness.

“In all of these, we are by no means claiming any success yet. In fact, it is our thinking at KiaKia that our work and mission are now only properly. Efforts which require not just a few hands, but of many brilliant minds and diligent hands, in closing the numerous financial exclusion gaps. We also understand that no true success story is the same. The reason we will diligently follow in the path we have created for ourselves, with conviction and determination in our hearts, and the right knowledge in our heads, hoping it will lead to great ends for the benefit of country and the continent.

“We will continue to perform with a mindset of excellence, collaborate with like minds, and stride graciously side by side with other great startups in rebooting a new definition of digital access to capital in Africa. Without a whiff of rhetorics, it is clearly evident KiaKia has come to stay for good.

“Kudos to all startups in the Nigerian and African grind, who against many odds keep hands to the plough to create value in several ways. Continue to stay the course. Don’t give up, but quit when you need to quit, pause when you need to pause, rejig when you need to rejig, pivot when you need to pivot, and restart again when possible. Sometimes, there is need to pause or reverse in order to go forward.

“Oya now”, go along. Engage Mr. K. Let’s have your valuable feedbacks for continuous improvements. But make sure you are at your credible best if Mr. K must grant you access to capital. And make sure not to fake it because Mr. K is intuitive and has a mind of its own.

Source: Medium.com

@TechEconomyNG connects past-present-emerging technological impacts on Businesses, People and Cities. All Correspondence to: [email protected]