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A Presentation at the RFP 9 Launch & Workshop of November 21, 2018

Introduction to Request For Proposal Round 9

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Contents

3

5

8

14

Background Information

About EFInA’s Innovation Fund

EFInA Request For Proposals Round 9 & Insights from EFInA A2F 2016 Data on the Window

16 Conclusion

2

Focusing on the Needs of the Target Audience

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3

About EFInA

3

Financial sector development organisation promoting financial inclusion Funded by DFID and Bill & Melinda Gates Foundation

Background

Vision

Mission

To be the leader in facilitating the emergence of an all-inclusive and growth-promoting financial system

To make the Nigerian financial system work better, especially for the poor

Pillars

Re

se

arc

h

Ad

vo

cac

y

Cap

acit

y

Bu

ild

ing

Inn

ovati

on

Youth

EFInA’s Strategic Areas

Electronic Payments With e-payments, providers can extend

fast, reliable financial services to the mass market in a cost-effective manner.

Agent Networks Agents enable delivery of financial services outside of traditional access points such as bank branches.

Women EFInA seeks projects that will address obstacles limiting access to financial services among low-income women.

Targeted Intervention in the North Adults in the North East and North West

geopolitical zones are more likely to be financially excluded than those in other

geopolitical zones.

Youth Developing financial services that are

relevant and affordable for Nigeria’s large youth population is essential to driving financial inclusion in Nigeria.

INNOVATION FUND 3

Financial Inclusion 2.0 EFInA seeks to test and support disruptive ideas and redefine financial inclusion.

Transformative Advocacy EFInA will push for an even playing field and support active players most suited

to rapidly increase financial inclusion.

Focus Areas

Cross-Cutting Themes

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5

About the EFInA Innovation Fund

5

Purpose of the Fund

Promote the development and implementation of innovative financial products and services targeting the unbanked and under-banked low income population

Shares Risks

Supports Commercial

Viability

Innovation Novel ways of providing/sustaining access to financial services in Nigeria

Innovation Fund

Technical Assistance Grants

Innovation Grants FinTech Challenge Grants

Fintech Challenge Grants

Support innovative use of digital technology to address specific financial inclusion challenges

Projects last up

to 12 months

Funding amount varies

by challenge round

No minimum

requirement for

grantee funds match

Grant applications are

solicited via Requests

for Proposals

Funding is used to develop, pilot and/or deploy an

innovative, technology-based solution to a

financial inclusion problem Start-up and growth stage Fintech companies in

Nigeria are eligible to apply

5

Fintech Challenge Grant Application Process

EFInA Announces a Request for Proposals (RFP)

Applications are submitted

Applications are evaluated on a competitive basis

EFInA notifies applicants of approval or rejection

EFInA conducts due diligence for pre-approved grants

Challenge Grants are awarded

10

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8 8

Supporting New Concepts to Enhance the Uptake and Usage of Financial Services by the Low Income Population in Nigeria by Leveraging Financial Technology Delivery Channels Provided by FinTechs

EFInA is looking to fund solutions that are innovative and scalable, including focus on fintech use cases

EFInA Request For Proposals Round 9

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9 Source: EFInA Access to Financial Services in Nigeria 2016 survey

There is a Significant Opportunity for Fintechs in Nigeria as 71% Underserved Adults said they are interested in adopting New Financial Technology

9

• 19 million (38.4%) of the informally served and financially excluded population own a mobile phone

• 71% of the underserved adults said they are prepared to use new technology • 33 million adults are willing to learn how to use new technology • Over 20 million are open to the idea of using financial technology to manage their finances

Financially Excluded (millions)

Informally

Served (millions)

26.0

14.1

23.0

17.1

14.1

26.0

1.4

38.7

Agree

Disagree

Agree

Disagree

Yes

No

Yes

No

I am

pre

par

ed

to le

arn

ho

wto

use

ne

wte

chn

olo

gy

I wo

uld

rat

he

rd

eal

fa

ce t

ofa

ce w

ith

ap

ers

on

th

an

wit

h a

ne

lect

ron

icd

evi

ce (

like

ATM

s) w

he

n it

com

es

tom

anag

ing…

Do

yo

u o

wn

am

ob

ile p

ho

ne

Hav

e y

ou

he

ard

of

mo

bile

mo

ne

y

7.03

2.40

5.70

3.70

4.90

4.50

0.42

9.00

Agree

Disagree

Agree

Disagree

Yes

No

Yes

No

I a

mp

rep

are

d t

ole

arn

ho

w t

ou

se

new

tech

no

log

y

I w

ou

ldra

the

r d

eal

face

to

face

wit

h a

pers

on

th

an

wit

h a

nele

ctr

on

icd

ev

ice (

like

AT

Ms)

wh

en

it c

om

es…

Do

yo

u o

wn

a m

ob

ile

ph

on

e

Ha

ve y

ou

hea

rd o

fm

ob

ile

mo

ney

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10

Request For Proposal Round 9: Fintech Challenge Grants

10

Savings

Electronic Channels

Insurance

Payments

considers proposals that help strengthen financial resilience in

Nigeria by aligning innovation and modern technology with the needs of the low-income population (defined as those earning N50, 000 or less per month).

Investments

Credit

Mobile Phone

Digital/Fintech Platforms

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11

Thematic Areas for the RFP 9

11

• Development of Initiatives aided by formation

of clusters and refining ideas to bring about innovation (i.e. Garage and Innovation Hub). Designing Financing and Risk Mechanisms to manage challenges with product and technology development.

FinTech Challenge 1 Grant

FinTech Challenge 2 Grant

• Creating platforms that facilitate savings,

electronic payments, loan disbursements and collections, etc. with products market ready for pilot and roll out.

$50,000

to $200,000

$200,000

to $500,000

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12

EFInA is looking for proposals that make a strong case for success

12

Applicants must have a track record of success for providing financial technology services

Applicants must provide a strong business case that demonstrates how the proposed products/services

and channels meet the needs of the low income population (defined as those earning N50,000 or less per

month)

Applicants must develop effective customer awareness campaigns that demonstrate the benefits of the

products/services. and provide information on agent locations, if applicable

Applicants must indicate that they have the capacity to implement the proposed project and demonstrate

sustainable impact within 12 months

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13

Who can Apply?

13

Who can

Apply?

Eligible organisations are start-up and growth stage Fintech Companies in Nigeria offering innovative financial services solutions that promote financial inclusion

Applicant should be legally incorporated within Nigeria Have the capacity to implement the proposed project for the applied funding and

evidence that the business is viable Applicant should have 2 Guarantors to provide a formal assurance, especially that

all project conditions agreed by EFInA and Applicant will be fulfilled

The EFInA Fintech Challenge Fund is open to proposals around two thematic challenges and a special focus area. Individual projects may focus on one or multiple thematic areas. A clearly identified need or problem and a practical application of the proposed innovation will be important for a successful proposal

All proposals need to demonstrate a new or different approach which requires funding from the challenge fund to get off the ground, and the proposal should demonstrate why this could not be supported from the Applicant’s funding sources. Ensure that all approaches are scalable

All products and outputs should show a clear path to ultimately be operationalized on-the-ground

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14

Focusing on the specific needs of the target audience

14

Start with understanding the financial needs of low-

income Nigerians

Create convenient access points

“I feel discouraged to pay N600 to and from the bank just to save a few

thousand naira”

Establish trust at the outset

“I will not allow anybody to use my money as experiment, when I hear

that they are good then I can put my money there”

Develop a clear value proposition for

customers and agents

“They (banks) will charge me almost N200 for some services and later pay me an interest of N5 on my deposit…imagine!”

Incorporate financial education into customer

interaction

“They are supposed to inform me before they deduct any money from my account, even the ATM card nobody told me that there would be charges for it. If you’re lucky to meet the good bankers they’ll

explain to you but if you meet the wrong one they won’t explain anything to you”

Focus on usability

“The process of mobile internet banking can be long

and boring, you may even need your BVN to be able to

use it”

Sources: EFInA Access to Financial Services in Nigeria 2016 survey Focus Group Discussions; EFInA Focus Group Discussions with Uses and Non-Users of Mobile Money (2015)

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15

RFP 9 Has Several Important Dates

15

Launch Event

Deadline for

Proposal Submission

1:00pm

Deadline for submission of second round

proposals following shortlist

Announced RFP 9 in

Newspapers

Follow-up RFP 9

adverts via Online

Platforms

EFInA will announce final decisions to shortlisted applicants in January 2019

November 2nd, 2018

November 2nd & 4th 2018

November 21st , 2018

November 22nd , 2018

December 7th , 2018

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16

Conclusion: Strategic Considerations for Fintechs

16

Collaboration -

A win –win

situation

Fintechs are encouraged to collaborate with other financial services providers and should be seen as enablers and not solely as competition. These win-win partnerships between financial services providers can help advance financial inclusion faster for us to achieve the financial inclusion targets for 2020 set by the NFIS.

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17 17

All applicants must complete the EFInA Fintech Challenge Grant Application Form. For further information on the application and submission process please visit (http://www.efina.org.ng/fintechchallengeRFP).