Exclusive: ‘Showing the love’ – Norah Ikoh, Kuda Bank in “The Paytech Magazine”

Nigeria’s first mobile-only bank has seen rapid growth as it embraces the unbanked and underbanked in a country where nothing usually comes for free. Kuda Bank’s Head of Client Relations Norah Ikoh reveals the beating heart of the nation’s generous fintech

The best things in life are free…or so the song goes. And tens of thousands of Nigerian account holders with Kuda Bank would tend to agree.

With ambitions to be ‘the Monzo of Africa’, it launched late last year as Nigeria’s first full-stack, licensed, mobile-only bank on the back of pre-seed angel investment of $1.6million, and was immediately hailed by the Nigerian Interbank Settlement Scheme as ‘revolutionising’ the country’s financial services. Its first challenge was the biggest: how to persuade the four in 10 Nigerians who hold an account of any kind to switch – and the other six in 10 of their unbanked fellow countrymen to break with the habits of several generations and enter the system for the first time. The answer, it decided, was ‘awoof’.

“In the Nigeria language, everybody loves ‘awoof’. Everybody loves ‘free stuff’,” says Kuda Bank’s head of client relations, Norah Ikoh. No account maintenance fees, free Verve (the pan-African chip + PIN) payment card, ATM fees waived and, crucially, the only bank to offer 25 free transfers a month, recently with the cap raised to $2,500 in a single transaction, were the carrots. To build traction quickly, the bank has used a tireless social media campaign and offered a 200 Nigerian naira referral fee. That will buy you about four Gala – Nigerians’ favourite sausage roll snacks – but, hey, if it works…and, according to CEO and co-founder Babs Ogundeyi, it does. For each of the last couple of months, the bank has seen accounts opening at the rate of ‘tens of thousands’, propelling it towards the founders’ aspiration to build a ‘pan-African digital bank’.

“We’re growing fast,” confirms Ikoh. “We’re targeting customers between the ages of 18 and 35, the underbanked and those we can get to switch to Kuda. The reception we’re getting has been great. We’re keeping an eye on customer demand for our products. But if it necessitates more capital, then we’ll raise more money.” Styled as the #BankoftheFree, Kuda’s ethos is to be transparent, responsive and fun with no financial barriers to entry for the millions of Nigerians who are a long, long way down the world’s median per capita income rankings. But what they do have in common with the rest of the world is access to smartphones. According to Statistica, the number of smartphone users in Nigeria, Africa’s biggest economy and most populous country, is forecast to grow to more than 140 million by 2025, in a nation of about 60 million working adults.

“Most customers shop online, they want to be able to transact internationally,” says Ikoh. “We have partnerships with the Inter-Bank Settlement Scheme and other money routing agencies in Nigeria. It’s a process – we’re learning each day, discovering new ideas, new innovations to make transactions more seamless for customers, responding to their questions, understanding their needs and using their feedback to improve existing products and create new ones.”

A homegrown bank

Among the app’s newest upgrades is Payment Link, a faster way to send money, mobile-to-mobile, between Kuda Bank accounts, a card tracker to check the progress of a debit card request, the ability to change the account name through the app, and the introduction of transfer categories to its personal financial management tools. As it moves out of Beta this summer, Kuda plans to open up more payment channels and tools, including the introduction of virtual cards.

The COVID-19 crisis hasn’t knocked the young bank off course. If anything, being able to offer paperless, five-minute onboarding and a suite of digital money transfer and payment choices has stood it in good stead as the country’s government urges people to adopt cashless alternatives. The opening of an online Lagos Food Bank donation fund and regular updates during the lockdown has kept customers connected, informed and entertained over the last few weeks. It has even posted suggested lists of essential items to get in – yams and sardines are right up there – and distracted customers with polls about US rappers. It’s all helping to drive new users to the app, with many adopting Kuda Bank as their primary account provider. A crucial next step is to offer a loan facility, one of the most requested features from customers, and, given the bank’s free-to-use proposition, an important element of its revenue generation model.

“Our revenue stream right now is from collected deposits, backed by investment from government, interest from loans and merchant fees from card transactions,” says Ikoh. “We’re looking to scale that hugely by the end of the year.” The bank, which is a graduate of the Microsoft4Africa BizSpark programme, has been built from the ground up on home soil, using homegrown engineers. “We built Kuda in house, using the best Nigerian tech talent,” says Ikoh. “We wanted to be able to control our processes because if you depend on third parties, it’s always one hiccup after another. If we have our own core banking process and something goes wrong, we can manage it from our end – we’re not relying on a third party that relies on another third party to solve the problem.”

The same continuity of service and reliability concerns have driven challengers on the other side of the world to adopt the same approach – notably Starling in the UK. But the one Ikoh admires the most is Monzo. It has a similarly ‘casual, fun and techy’ vibe and Kuda aspires to match founder Tom Blomfield’s growth aspirations, too. Although still some way off Monzo’s three million users, Ikoh is fairly confident that, at the current exponential onboarding rates, it could hit 500,000 if not one million users by the end of this year. Kuda (a Shona word, deliberately chosen for being just a vowel sound away from kudi, the Nigerian for money) means love and everyone is feeling it for the bank right now, says Ikoh. “The kind of content we put on social media and in our newsletters attracts the best talent. They want to help Kuda grow and they have what it takes to do it. We position ourselves in a way that people say ‘what am I doing here? I can do better at Kuda’. We have people sending us messages every day who want to do that. Once here, we help them learn and grow.

“Kuda is the best thing in Nigeria right now. Everybody wants to be a part of this brand, everybody wants to be a part of the culture. We don’t have to go out and look for them. They look for us.”


This article was first published in The Paytech Magazine: Issue #05, Page 34 & 35.

(This article is a special preview of the publication – due out in May)

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