In the lendtech space in Nigeria, Kiakia has not only carved a niche for itself; it has gone ahead to set a standard for not just its contemporaries but older and more connected companies.
Founded nearly eight years ago, the fintech giant started with a few million personal funds after losing a pitch for an investment of ₦40 million in Lagos. The company has now grown beyond an oak in the financial services sector.
At the top of that company is its founder, Mr. Olajide Abiola. The former soldier turned computer scientist turned serial entrepreneur is making headlines in various sectors of the economy.
He, his co-founder, and the rest of the team have made strides where others feared to thread by supporting businesses, creating jobs, and encouraging economic growth.
After the successes at Kiakia, Mr. Abiola has moved to real estate, where he is chaperoning a slew of hospitality centres, especially in the nation’s capital. Introducing innovations and recreating the living space.
Our Nigeria of the Week has helped to facilitate major investments in agriculture in particular, even where big banks feared to try. The same way he has opened up the hospitality sector in a manner that makes competitors green with envy.
Mr. Abiola sat down with a team from Newspread to speak in the journey so far. Excerpts:
Question: Can you tell us a little about Kiakia and when you started Kiakia?
Answer: Kiakia is a pioneering fintech digital lender that started operations in 2016. Prior to the start of business for about six months, it was in a beta version. The beta version is the trial or private version where a selected group of users are testing it, both on the demand and supply sides.
Question: What exactly does Kiakia do?
Answer: Essentially, Kiakia is a digital lender that facilitates credit to individuals and micro, small, and medium Enterprises (MSMEs) with loan sizes as little as N10,000 to as high as N120,000,000 across the country.
Being a digital lender, we are not restricted by geographical location within Nigeria as a country.
Though the supply side is open to Nigerians even those in the diaspora and foreigners. Here, these people and even commercial and microfinance banks licensed by the Central Bank of Nigeria (CBN) provide the funds that enable us to facilitate credit for individuals and MSMEs.
Question: To what extent will you say some of the set objectives have been realized?
Answer: Since inception, which is about eight years ago, we have been able to disburse about N13 billion till date. We have also been able to uptake more than 467,000 users, split into individuals and MSMEs, across the country and have successfully disbursed this credit to about 23,000 beneficiaries out of the total of 467,000.
We do not have infinite resources, and this is why we narrow down our disbursement to a specific number of beneficiaries based on the parameters of priorities that we use.
Question: From our research, we understand that you part-funded one of the biggest farmers’ cooperatives; why did you decide to invest in farming when big banks are shy?
Answer: Most conventional financial institutions have over the years designated the agricultural sector more or less as a no-go area. But when you look at it, it’s a viable sector that essentially feeds the country. Without the activities of those within the agricultural sector, which involve all of the value chain—planting, farming, processing, storage, logistics, and all of that—there is no way we can have a healthy and strong nation through proper nutrition, which is guaranteed by agriculture. So we felt that it was because they actually do not adopt a research-driven approach to funding this sector, so we tried as much as possible to understand them at the grass-roots level.
Over the years, most of the mainstream financial institutions have actually focused more on portfolio farmers, people who do not understand or engage in any form of farming at all, but as a result of their proximity to those in power, they have actually extended credit facilities to these people. Hence the seeming failure of the agricultural sector over the years…so it’s for us to identify, isolate, and mitigate against some of these cultural or institutional biases against the agricultural sector. And this was what enabled us to secure strategic funding.
We provided the seed capital for NFGCF Farms Limited before they even became attractive to the CBN and the conventional banks to step in.
Question: You are into other ventures; can you tell us a bit about them?
Answer: I am into food processing through the corporate vehicle of House of Commodities. We actually produce and supply primary and secondary raw materials to larger companies like Kola, and we supply the World Food Programme, an arm of the UN. We supplied Amo Byng; these are big, large-scale multinational companies into large-scale and cross-border agricultural businesses.
After years of involvement and participation within the supply side of things, we decided to take it a little higher by going into manufacturing and food production, and at the moment, we are processing groundnuts to produce high-premium groundnut oil for cooking and export.
That’s why we obtained five NAFDAC numbers to be able to achieve this. Our products come in five variant sizes.
We are also into real estate, hospitality and construction, licensed precious metal trading working directly with artisinal miners.
Question: What motivated you to go into the hospitality industry?
Answer: Studying the hospitality and real estate landscape and the emerging seismic shift and paradim shift in travel and accommodation as it relates to hospitality, we wanted to give the new age consumers, which consist of Gen Z and millennials, whose taste and preferences over the last decade have actually changed in terms of design, functionality, aesthetics, service delivery and efficiency.
And that was what inspired the hospitality aspect—to introduce and infuse those preferences as they relate to customer demand as shaped and dictated by the paradim and seismic shifts of Gen Z and millennials. And that’s what informed the birth of smart residences: to develop fashionable homes and fashionable accommodation spaces to serve this population of new-age travelers and accommodation seekers.
Through Smart Residences, we are operating under multiple trading names to reflect that vision and mission statement with regards to the focus group of the market we are serving, and we have Gidanka, Home Away, Glass Residence, De Residence, and Diplomatic Hills, and these are brands under which Smart Residences are operating and functioning.
Question: In what areas do you think government, both at subnational and national levels, can help the financial services sector?
Answer: I feel the government should play a major role by providing security and infrastructure that will actually stimulate the right type of investment suited to our socio-cultural dynamics. Invest in a great deal of PR for the country.
Citizens are the country’s number one marketers and should play a great role in doing that with their messages, attitudes, and dispositions toward foreigners. Especially in today’s global village, the level of intensity and attractiveness to your prospective visitor of the country will determine.
Question: Where do you see your hospitality portfolio in the next five years?
Answer: We see ourselves as the number one leading provider of new-age accommodation for the hospitality sector. We are leading the pack and defining the trail within this sub-segment (new age) of our sector.
Question: As a young entrepreneur, what advice do you have for up-and-coming ones?
Answer: The old rugged principles and virtues are still very efficacious, and they should ensure they internalize and exemplify them through relational attitude, discipline, creativity, integrity, and trust. have the necessary grit and drive, as we are in the best of times and decades.
Question: Since you are really diversified, what areas should investors look out for in the Nigerian economy?
Answer: Manufacturing, food processing precisely, mining, real estate and hospitality, finance. Finance is the commodity in highest demand globally.
We are always open to talking with prospective investors.
Question: What was the biggest thing KiaKia brought on board that made it stand out from other finance sector players?
Answer: On the supply side, we brought in safety, comfort, and integrity, especially with regards to the banks, the individual lenders, and the corporate lenders who were providing us with finance. At first, it took consistency, stability, and reliability to actually get back their funds, and that’s why we have been able to build a very strong track record over the past eight years.
We were able to inspire confidence in the minds and hearts of those who were providing us with the funds. That’s the banks, the high-network individuals, and the corporate organization.
On the demand side, which is the borrowers, individuals, and MSMES, they pay back.
We were able to provide these funds to them in a timely manner. To most borrowers, it is not just access to funds; timely access to funds is what defines how useful that money is to them and also mitigates or prevents the risk or the chances of the credit going bad because if they have access to credit as and when due, they are able to apply it appropriately.
Most entrepreneurs and most individuals do not intend to misappropriate funds that they have access to. But because of the unnecessary, strenuous hurdles the main stream financial institutions face, At the end of the day, the opportunity had gone, and then the funds were disbursed to them. They had no choice but to misappropriate the funds, and once you misappropriate funds, it becomes difficult for you to actually put them to use and recoup the money back, and at the end of the day, we have a bad loan.
Since our inception until today, we have been able to achieve a non-performing portfolio of less than 3% throughout our history.
Question: Did Technology play a role in this?
Answer: Technology particularly played a role in this. It played a strong role in the areas of data collection, data processing, data analysis, identity authentication, and validation.
It played a very significant role because, in real time, we are able to cross-reference a large amount of data, synthesize and distill it into the relevant information we need, and make real-time decisions with it. Technology played a very critical role, but most importantly, the business model Which is very effective and efficient. Technology will be nothing without a good business model.
Question: How do you scrutinize your clients to know who is eligible and trustworthy?
Answer: We collect both voluntary and signed-off data, which we have access to via the BVN, and financial data from banks.
We cross-reference this information. There must be consistency across most of this information. It’s a combination of traditional data, voluntarily submitted data, and access through an application program interface, made available by many of the technology partners with whom we work in payment processing, including the CBN, the Nigeria Inter Bank Settlement System (NIBSS), and the banks themselves.
Once you sign and authorize as the prospective borrower, within a black box, the system, based on programming instructions, crunches this data, dispersing sources and synthesizing it into useful data with which we take decisions.
| Here are links to some of the companies led by Mr Abiola: