Múyìwá Mátùlúkò here
Today we are discussing
- Activation of Facebook Marketplace in Nigeria
- Agrocenta’s $790k pre-Series A round
- Chronic digital debtors in Kenya
Facebook Marketplace finally in Nigeria
Facebook has announced the rollout of Facebook Marketplace in Nigeria. Facebook Marketplace is a tool that enables Facebook users buy and sell anything within their immediate community.
Nigeria will be the 4th African country – after South Africa, Ethiopia and Kenya – to get Marketplace since it launched in 2016.
It did not get off to a great start; in 2016, some early adopters used Facebook Marketplace to peddle guns, sex and illegal drugs. But Facebook has since added community standards and policies which include age and old-timer filters, among other security and safety measures.
But Facebook Marketplace is no silver bullet for Nigeria’s eCommerce challenge. You can think of it as a Jiji or OLX – essentially a classifieds marketplace – with a dash of community elements.
Buyer and sellers are still 100% responsible for verification, their security, safety and privacy; Facebook doesn’t even handle payments. So much for the community effect.
Pro Tip: 5 red flags you’re about to get scammed on
OLX any online marketplace. I wrote this almost 7 years ago (cringing at my closing dad joke) and it’s still valid, even for Facebook Marketplace.
Agrocenta raises $790k pre-series A
Ghanaian agritech startup, Agrocenta has raised $790,000 pre-series A funding, with participation from the Shell Foundation, FCDO, AV Ventures and Rabo Foundation.
Founded in 2015, Agrocenta operates a mobile merchanting platform that provides market information, storage and delivery solutions to smallholder farmers in Ghana.
According to co-founders Francis Obirikorang and Michael Ocansey, their flagship app, CropChain which enables trade between smallholder farmers and consumers, has rapidly grown from 3,000 to 48,000 registered farmers. The startup also provides credit and insurance facilities for smallholder farmers via its LendIt app.
I find myself more interested in LendIt because while agriculture makes up about 18% of sub-Saharan Africa’s GDP, lending to stakeholders represents only 1% (World Bank, 2018).
You see, one of the biggest hurdles to lending for smallholder farmers is a lack of accurate credit profiles. This is further impeded by the remoteness of these farmers, which makes gathering relevant data capital-intensive.
So, for the immediate future, Agrocenta will focus the new capital injection towards doubling down on its flagship offering.
“The demand for agricultural raw materials from off-takers in the brewery, manufacturing and consumer sector is increasing exponentially because of the easing of the COVID-19 restrictions that were put in place by the government of Ghana, hence this capital injection will help to secure purchases at fair and transparent prices from smallholders — a much-needed lifeline for many who are at the proverbial bottom of the pyramid,” said the founders in an official statement.
Kenya: Online loan defaulters peak at 14 million
WeeTracker reports that between August 2020 and January 2021, the number of non-performing digital loans in Kenya rose by 45% to 14,035,718.
Quick context. At the peak of the pandemic in April last year, the Central Bank of Kenya (CBK) issued a 6-month ban on Credit Reference Bureau (CRB) listings, essentially preventing many digital lenders from blacklisting defaulting borrowers.
The move was primarily aimed at cushioning the economic effects of the government-imposed lockdown. But it was also necessary to mitigate complaints from the public about the misuse of credit information and other predatory practices akin to Nigeria.
But it appears to have backfired. The ban encouraged more Kenyans to take multiple loans, at an unprecedented rate, from multiple platforms without the fear of being blacklisted. And now, over 14 millions Kenyans are in debt and have been blacklisted, even after an additional 90-day grace period that followed the lifting of the ban.
Non-performing loans – i.e. loan defaults above 90 days – and related fraud are a continent-wide problem in the digital lending space. Last year alone, two different Nigerian startups – Voyance and The Blacklist – launched to tackle the problem.
However, for the sake of fairness, many digital lenders employ extremely predatory methods to stay viable. You should read “X-raying the emerging culture of digital predatory lending in Nigeria“.
My weekend read/watch
- Why Nigerian legaltech, insurtech startups are not automating estate planning yet. Read.
- Silicon Valley: History’s Greatest ‘Ponzi Scheme’ (Mini Documentary). Watch.
- The Fatal Flaw of The DTC Playbook & The Search for Internet Diamonds. Read.
- Keep in mind: Register for the Digital Currency Summit with this link.
Have a great day!
Múyìwá Mátùlúkò for Techpoint Africa.
Nigerian startups raised $120.6m in 2020, with fintechs getting a bulk of the share. Find out more when you download the report.
On March 25, 2021, Techpoint Africa will be hosting the brightest minds in decentralised finance/crypto at the Digital Currency Summit tagged “Building the money of the future” Click here for more details, registration and sponsorship. Location: Fourpoint by Sheraton, V.I. Lagos.