Banks Thrive with N280bn in E-Banking Revenues
A Financial Analysis of Nigeria’s E-Banking Sector
Eleven Nigerian banks have soared in profitability, collectively amassing N279.85 billion within the first nine months of 2023, marking a 29.89% surge from the preceding year’s N215.44 billion. This astronomical rise signifies an unprecedented surge in electronic banking activities across the nation.
The Central Bank’s Redesign Policy and the Cashless Surge
The Central Bank of Nigeria‘s strategic policy shift towards the redesign of the naira has been a pivotal factor in spurring this rapid escalation in cashless transactions. The enforced policy compelled a widespread embrace of electronic payment methods among Nigerians, resulting in a staggering 44.84% spike in total cashless transactions, catapulting from N87.49 trillion in the corresponding period of 2022 to an impressive N126.73 trillion in the first quarter of 2023 alone.
Banks’ Revenue Surge and Challenges
Despite the policy being temporarily halted, banks continue to revel in increased fee revenues generated through e-banking channels as Nigerians persist in adopting these electronic payment channels. The United Bank for Africa stands out, boasting the highest earnings of N75.75 billion from electronic fees during this period. Conversely, Jaiz Bank registered the lowest earnings at N696.03 million, although it exhibited a commendable 78.55% increase from the previous year’s N389.82 million.
Infrastructure Concerns and Regulatory Response
However, amidst these significant strides, concerns linger regarding the nation’s payment infrastructure’s capacity to effectively manage this anticipated surge in transaction volumes. The House of Representatives, responding to the strain experienced on online and electronic banking systems due to the cashless policy, urged the Central Bank to mandate banks revamp their electronic transaction platforms in early 2023.
Rwanda’s $30m Tech Fund Backs AltSchool Africa
Rwandan Investment and Strategic Support for AltSchool Africa
In a separate landscape, AltSchool Africa, a Nigerian educational technology startup, is poised to receive strategic support from Rwanda’s Innovation Fund. The fund, established with a $30 million loan from the African Development Bank in 2021, aligns with Rwanda’s ambition to position itself as a tech powerhouse in Africa.
Rwandan Innovation Fund and AltSchool Africa’s Growth
AltSchool Africa’s strategic partnership with Intellecap, facilitated by the Rwandan Innovation Fund, is designed to assist the company in planning its next phase of growth. This comes after the startup secured $3 million in April 2023, with Angaza Capital, a key participant in the Rwandan Innovation Fund, joining the investment round.
Rwandan Government’s Support and AltSchool’s Expansion
Expressing gratitude for Rwanda’s support, Adewale Yusuf, AltSchool’s CEO, acknowledged the government’s instrumental role in the company’s success. AltSchool Africa established an office in Rwanda last year, aligning with Rwanda’s larger strategy to attract and support African companies. This move follows Flutterwave’s establishment of an East African hub and Paystack’s confirmed expansion plans in Rwanda, signifying a growing trend of companies eyeing Rwanda’s promising market.
Rwandan Innovation Fund’s Ambitious Goals
The Rwandan Innovation Fund, beyond its initial $30 million AfDB loan, aims to secure an additional $30 million from private investors, with substantial contributions from the government. This financial arsenal is earmarked to support 150 tech-enabled companies, ten incubators and accelerators, and 20 early-stage growth opportunities across Africa. So far, the fund has deployed $6.6 million in 11 startups within East Africa.
AltSchool Africa’s Impact and Educational Model
Empowering African Youth through Tech Education
AltSchool Africa distinguishes itself by providing online-only learning encompassing a diverse curriculum spanning business, data, engineering, media, and the creative economy. Operating on a subscription-based model of $20-$50 per month, the platform also adopts the income-sharing agreement (ISA) common among online educational startups like ALX. Additionally, AltSchool actively connects learners to internships, striving to bridge the gap between education and employment.
AltSchool’s Societal Contribution
With a reach extending to 20,000 learners across eight African countries, AltSchool Africa is committed to empowering African youth with the necessary skills and knowledge essential for building sustainable careers within and beyond the tech ecosystem. Given the prevalent challenge of youth unemployment across Africa, initiatives like AltSchool play a pivotal role in equipping young individuals with globally sought-after skills.
Funding Support and Future Prospects
This recent funding round marks AltSchool’s second achievement, following an earlier $1 million in pre-seed funding secured in 2022 from venture capitalists and angel investors. Notable investors in the round included Voltron Capital and Obda VC, alongside influential figures like Paystack’s Sola Akinlade and Nigerian musician Folarin “Falz” Falana.
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