Globally, there is a recurring problem in the FinTech industry: Reaching out and serving the underserved communities. Most often, FinTech founders believe that the underserved are those in the rural areas, and they believe that those in the urban areas are “over-served.” Although, this is true, a large number of people who are financially excluded in the FinTech wave are found in rural areas.
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But what if you are told that there are a lot of people who are underserved in urban areas, would you believe? There are a lot of immigrants who are underserved in Nigeria and elsewhere. It is often natural for immigrants/migrants to face challenges in settling down in their host countries, and Nigeria is not an exception.
According to a report by United Nations Department of Economic and Social Affairs (UN DESA), there are about 1.3 million migrants, including refugees, in Nigeria as at mid-2020. Although these figures largely cover registered immigrants as studies have shown that there are a lot of unregistered immigrants/migrants in urban cities like Lagos, Kano, Abuja, etc. Most of these migrants are from West African countries like Benin, Ghana, Mali, Cameroon, Guinea, The Gambia and Senegal. There is also a large number from Asian countries like India, China, Lebanon, and Syria. This is to say; over a million people are largely unbanked by FinTech standards.
Globally, over 3,000 Remittance Service Providers (RSPs), charge more than $30billion to process approximately 2 billion transactions annually. Hence, remittance is a profitable direction for Fintechs to pursue. Moreover, immigrants complain of difficulty in carrying out financial transactions in host countries. Studies have shown that Mobile Transfer Operators, banks and post-offices are difficult for old and new migrants in Nigeria and elsewhere in the world. Studies also indicated that banks are the costliest channel of sending remittances. Therefore, building a FinTech startup that meets the needs of migrants will fill the necessary gaps.
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In this article, I discuss how to build a FinTech that meets the needs of migrants/immigrants.
The first step towards building a FinTech that meets the needs of migrants in Nigeria is to identify the number of immigrants/migrants in Nigeria. There are various ways to do this. It is fundamentally about researching. There are existing research works online about immigrant communities in Nigeria. You can as well reach out to the various directories in Nigeria Immigrant offices in the country as well as the office in the capital city. Other places include embassies, foreign affairs commissions, etc. The goal is to know how many migrants are in Nigeria.
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Reach Out to Migrant Communities
The next step is to reach out to immigrant communities. Just like elsewhere in the world, there are various migrant/immigrant communities in Nigeria. Building a FinTech app that meets their financial needs will require you to reach the leadership of these communities who can then introduce you to the larger community. This will require a great deal of visitation and selling your product to them while winning their trust.
Moreover, ensure that you give every reason to believe in you and your team because immigrants are often skeptical about fraud and financial issues. Therefore, go with valid national documents and other registration papers as well. By reaching out to community leaders, you can get a whole lot of immigrants covered.
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Develop Customized Payment App
The next step is to design financial software that meets the specific needs of migrants. On this note, your software app must include language, customer care, exchange rate, local banks of country origin, etc. Furthermore, the software app must include symbols of country origin as well as local languages and regional lingua franca.
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The app must be able to give the user every sense of home and comfort while using it.
There are various pain points for immigrants. They have poor access to credit facilities and difficult saving mechanisms. Studies have shown that migrants find it difficult to access credit facilities to either start up their businesses or invest in them. It is common to see traditional banks give loans to migrants; hence, migrants’ biggest problem is access to credit facilities.
Another pain point is savings and financial management. For instance, providing a digital cooperative saving clubs specific for immigrants can help them retain and grow wealth in a foreign country. For instance, you can use the saving pot model, in which members will contribute daily and individuals are paid on a rotation basis.
Final Words
Adaptable to any country, an immigrant-specific FinTech service that allows immigrants to open bank accounts, get debit and credit cards, and bank-like they never left their home country is a huge opportunity for the industry to explore.
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