One of the major objectives for the creation of AfCFTA is the breaking down of national boundaries and other barriers that hinder cross-border trade, to allow for seamless trade and promotion of economic activities among African countries.

However, despite the very bright prospects of a new era of socio-economic prosperity on the continent, what may pose as an obstacle to the realization of the objectives of AfCFTA is the lack of visibility of African businesses, especially small and medium enterprises (SMEs), in the global business arena.

This lack of visibility, caused by the absence of a legal entity identifier (LEI), is the reason they cannot access the much-needed credit that should enable their growth.

Businesses in Africa face borderless trade financing challenges not only because of size, but because they are mostly unknown outside their domains.

While these businesses are not directly excluded from trade finance, they are often given unfavourable loan repayment terms which result in indirect exclusion.

To participate effectively in international business, therefore, African businesses, including SMEs and startups, must see Legal Entity Identifier as an imperative.

Legal Entity Identifier

Whether a business is registered on the African continent or in offshore locations as in some cases Mauritius.

The LEI is a major requirement due to mandates for trade reporting obligations such as the Financial Markets Act, 2018.

The use of LEI is required by African entities when they are trading and reporting and if conducting activities within the United States, European Union or the United Kingdom.

The global initiative gives business entities worldwide backing to succeed, especially with its roll out for African SMEs.

The LEI provides globally recognized business identities to SMEs. In innovative partnership local banks act as the first Validation Agent in Africa, using the bank’s usual onboarding process for business clients, including “know your client” (KYC) and “anti-money laundering” (AML) checks, to verify the identities and ownership information on businesses.

This helps SMEs access more favourable trade terms in international transactions and improve their access to finance.

The prospect of having African businesses best positioned for the global business arena explains the excitement that greeted the appointment of two African professional including Nigeria’s Dr. Folarin Alayande, a Nigerian international development economist, technology investor and financial services executive, as a non-executive director of the Global Legal Entity Identifier Foundation (GLEIF).

These appointments point to the significant and interest to drive the adoption of Legal Entity Identifier across Africa in alignment with GLEIF’s strategic priority of enabling digital trust for enterprises worldwide, and ultimately bringing more African businesses to the fore.

In 2023, Sub Saharan Africa witnessed significant growth despite the decline in funding over the last two quarters, which reflects global economic realities.

Although, Fintech startups and innovation hubs have thrived, particularly in countries like Nigeria, South Africa, Kenya, Egypt and Ghana, addressing diverse financial needs from payments to SME services.

Block chain and cryptocurrencies also gained traction; regulators worked on fostering innovation, while ensuring consumer protection. The use of AI and data analytics increased for credit scoring and risk management.

The Fintech sector played a crucial role in advancing financial inclusion, improving cross-border payments and addressing the financial needs of small businesses as well as individuals.

However, it wasn’t all rosy as concerns about e-fraud overshadowed some of the fine moments thereby highlighting the need for ongoing vigilance and regulatory adaptation in this rapidly evolving landscape.

This pressure persists, as industry watchers are concerned and worried about the rising global cost of funds and the declining shortage of investment across the continent.

Several startups in 2023, like PayDay, Bundle, Pivo, 54gene, Dash, Vibra, to mention but a few, either closed shop, or are on the verge of doing so, blaming the situation on financial and non-financial challenges, as well as lack of funding.

The year showed greater need to deepen corporate governance structures across Fintechs, and the overall financial service sector, especially for those seeking to explore international markets or seek funding rounds.

This is where LEI comes in to assist. As a globally recognized form of business identity, it would give African entities greater credibility when they apply for finance, engage in international trade and establish new supplier relationships for manufacturing processes.

The African Fintech landscape witnessed 26 publicly announced acquisitions over the last two years, according to Tekedia – a whopping 270 per cent growth from between 2019 and 2021. Industry players should therefore expect more of such moves from 2024. This figure is from publicly known acquisitions and shows significant growth of the African landscape.

It is expected that 2024 would bring in more consolidation of efforts among Fintechs and also between larger corporates and Fintechs, to explore synergies.

Mergers and acquisitions still serve as a strategic tool to allow startups to overcome the current funding landscape, while also delivering returns for existing stakeholders.

“Based on the current funding landscape, it is only fine to predict that more acquisitions would be considered by existing startups and the traditional banks and corporates seeking to leverage the strength and agility of the startups to consolidate on their offerings in the market”, according to Adeshina Adewumi, a renowned finance expert, Chief Executive Officer/Founder of Trade Lenda.

In conclusion, Africa needs improved investments to drive borderless economic activities with off-the-continent opportunity of creating an impact, particularly at a time AfCFTA is expected to boost borderless economic trade significantly, making Africa a single market of 1.3 billion people, and a cumulative GDP of over $3 trillion.

The post Leveraging Legal Entity Identifier (LEI) for Borderless Economic Activities across Africa in 2024 appeared first on Tech | Business | Economy.

While initial reports suggested Moniepoint might acquire Payday, the deal appears to have hit roadblocks, with sources citing Moniepoint’s board’s lack of enthusiasm for the acquisition. Nonetheless, talks to sell the company are ongoing.

However, the startup has faced challenges, including bad press due to fund loss from fraudulent activities. The company temporarily restricted customer accounts after detecting fraudulent activities but didn’t publicly acknowledge it until accusations surfaced. 

Internally, Payday encountered issues, including a contentious salary adjustment. The company reduced the salaries of some Nigerian staff by 30-50% in July, citing the need to align with Naira payments for resident employees. Employees expected their Naira salaries to match their dollar equivalents but were disappointed. Payday promised stock options as compensation, which have yet to materialize.

Furthermore, the departure of several employees, including co-founder and COO Ogechi Obike, raised concerns about misaligned goals and disagreements between the co-founders. Obike’s exit note cited goal misalignment as the reason for her departure, but Payday’s management denied these claims, suggesting she left by mutual agreement.

Favour Ori, the CEO of Payday, has been characterized as making impulsive decisions and occasionally sidestepping the company’s product team. Some customers experienced disruptions when Payday switched its Mastercard provider without adequate vetting. Ori has reportedly reduced his involvement in the company lately, leading some to speculate about his commitment.

Despite these challenges, Payday continues to explore options, including potential acquisition, in the competitive Nigerian fintech landscape.

The post Payday Explores Acquisition Options appeared first on Tech | Business | Economy.

Payday, the leading Pan-African neobank issuing global (USD, GBP & EUR) accounts to Africans, has announced its re-entry into Rwanda, following the official launch of SpaceX’s Starlink in the East African country. 

The re-entry into Rwanda marks a significant milestone in Payday’s Pan-African and global expansion plans, as well as its burgeoning working relationship as a payment processor for Starlink by SpaceX.

Announced in February 2023, Rwandans can purchase Starlink routers from the satellite communications corporation, as the country looks to meet its overall targets for widespread internet connectivity and broadband reach across urban and remote areas.

Payday customers in Rwanda will be able to use their virtual cards to not only pay for the routers, but manage their subscription payments. As with customers in Nigeria, they will also be able to send and receive Rwandan Francs (RWF) as well as USD, GBP, EUR using the Payday App.  

Payday recently announced a $3M seed round aimed at securing operational licensing in the UK and Canada; while laying the foundation for entry into several other countries across Europe and Africa – beginning with Nigeria and Rwanda. 

Commenting on the expansion, Favour Ori, Payday’s CEO said, “We are excited to expand our digital banking services to Rwanda as well as grow our partnership with Starlink. This not only presents an opportunity for us to play a significant role in driving financial inclusion in the country but also contributing to affordable internet connection regardless of location.”

Ori continued “Access to the internet is no longer a luxury, but a necessity for personal and economic growth. We believe in the importance of providing a payment solution that empowers individuals and businesses alike to connect to the digital world and unlock new opportunities for growth and development”.

Founded in June 2021 in Kigali, Rwanda, Payday supports African remote workers, freelancers, business owners and digital professionals with frictionless, borderless payments.

This enables global payment processing from over 130 countries, allowing Africans to work remotely for international organisations, and be paid and withdraw money in the currency of their choice regardless of location.  

Jean-Marie Kananura, Acting Chief Investment Officer at Kigali Financial Centre, commented on the Rwandian expansion, “We are very happy to witness Payday’s continuous growth. This is a testimony that Kigali International Financial Center has put in place a trusted framework for Rwandan-based startups to raise capital and scale up globally. Ahead of our Inclusive Fintech Forum in June, we aim to highlight these successes that will continuously position Rwanda as the home of fintech on the continent”.

With the country’s ambitious target of achieving 90% financial inclusion by 2024, Payday’s innovative banking solutions are expected to play a crucial role in achieving this goal.

With this latest launch, Payday is set to increase its customer base and establish a strong presence in Rwanda as well as the East African region.

The post Payday Relaunches in Rwanda with SpaceX’s Starlink appeared first on Tech | Business | Economy.

The fund will help bolster the success of the neobank’s “future of work” initiative focused on ensuring borderless payment alternatives in major currencies.

Moniepoint Inc., initially known as TeamApt Inc, led the oversubscribed seed round which included participation from investors such as Techstars, HoaQ, DFS Lab’s Stellar Africa Fund, Ingressive Capital Fund II. Follow-on investment also came from Angel investors such as MFS Africa Founder and CEO, Dare Okoudjou, as well as Norebase CEO Tola Onayemi. Existing investors like Techstars and Angels Touch also participated.

First launched in 2021 by Favour Ori, Payday started in Rwanda before expanding to Nigeria. The company was the first Rwandan company to join Techstars Toronto Accelerator programme. It enables African remote workers and freelancers to send and receive money in USD, GBP, EUR, and 20 other currencies, making work and payment from international companies easy. 

With over 300,000 users, Payday asserts to have daily new customers over 4,000+, processing an average of 40,000 transactions per day. The company makes monthly revenues by charging a fee on transactions, and its increasing user base keeps boosting this profit rate. 

Recently, PayDay also became a payment partner for SpaceX’s Starlink, facilitating the purchase of Starlink routers by its Nigerian and Rwandan users. In line with this, it affirms to have helped process about $1 million so far.

PayDay seeks to obtain operational licensing in the U.K. and Canada, while expanding operations in the U.K., where it has newly been incorporated.

The fintech is intensifying its marketing and adding more talent as it plans to grow from 35 to 50 employees in the coming weeks. Two Co-Founders have joined Ori – Elijah Kingson from Revolut, who will also function as the CPO and Yvonne Obike, the COO who formerly worked for Nigeria’s Bank of Industry. Sean Udeke, formerly with Goldman Sachs and Expedia, is the new head of products and may oversee new loan and credit card offerings.

The post With $3 million Oversubscribed Seed Round, Payday Strengthens Efficient Borderless Payments appeared first on Tech | Business | Economy.

TechEconomy.ng’s findings show that the fintech startup headquartered in Rwanda has reached 17,000 users within the first six months of its launch.

PayDay rolled out services in July 2021 and has been regarded as the ‘PayPal of Africa’. The reasons are not far-fetched. PayDay is regarded as the fastest and most efficient way for technology talent and creatives throughout the African continent to receive payments from their global or foreign clients within minutes all on their mobile phones or personal computers.

PayDay also functions as a multiple purposes fintech app that delivers payment of tuition, application and Student and Exchange Visitor Information System (SEVIS) fees in the United States, United Kingdom and Canada.

Interestingly, the platform enables you to perform these transactions within one to five days maximum.

You can also use the dollar ($) tag to send money to family and friends. This is quite strategic, especially now that the Central Bank of Nigeria has introduced and maintained the “Naira 4 dollar scheme”, where citizens are given back a certain amount of Naira for receiving dollars in their account (home).

More so, PayDay enables you to hold your cash in USD (for stability) and shop with the Virtual card.

For the crypto fans, you can withdraw money to your crypto wallet (BTC), bank account and Momo account.

In a LinkedIn post, Favour Ori, the founder/CEO, revealed that PayDay carried out over 56,000 successful transactions within the period under review.

PayDay which has secured over two million dollars ($2m+) in funding is now available in 10 countries.

The Fintech startup, founded by Nigerian entrepreneur, Favour Ori became the first Rwandan company to join the prestigious Techstars Toronto Accelerator program in 2021.

PayDay is definitely one of the Fintechs to watch in 2021

The post PayDay hits over 17,000 users six month after launch appeared first on Tech | Business | Economy.