Effective September 1, 2022, Emirates will suspend all its flights in and out of Nigeria. This announcement follows its inability to repatriate $85 million stuck in Nigeria. Since the announcement, several tech entrepreneurs and other Nigerians took to social media to share screenshots of their flight cancellations.
Nigeria has restricted access to foreign currency for imports and for investors seeking to repatriate their profits due to a shortage of dollars. Emirates said it would re-evaluate its decision if the situation over the blocked funds changed in the coming days. In the meantime, travellers will have to look for alternatives.
It's been a rough year for the aviation industry in Nigeria. In May 2022, a number of domestic airlines suspended flights due to soaring jet fuel prices.
For letter 126, we will examine:
- why FCCPC asked Nigerian fintechs to block predatory digital money lenders
- DR Congo's fintech ecosystem and Visa's expansion
- Microtraction's $15 million Community Fund for early-stage African startups
- the latest African Tech Startup Deals (in PNG and an interactive format)
- job opportunities, events, and more.
Consumer Protection agency asks Paystack and others to stop servicing online loan sharks
The news: The Federal Competition and Consumer Protection Commission (FCCPC) has ordered all fintechs in Nigeria (including Flutterwave, Opay, Paystack and Monnify) to stop providing payment or transaction services to digital money lenders under its investigation.
The commission also ordered telecommunication and technology companies which include Mobile Network Operators (MNOs) to stop providing servers, hosting or other key services such as connectivity to such disclosed or known lenders.
Why it matters: In the previous months, the FCCPC has continued to raid online loan sharks through its joint committee investigating rights violations and unfair practices. Some of the lenders have been shut down and/or fined for not registering with the Corporate Affairs Commission (CAC) and engaging in activities against the rights of Nigerian consumers.
Although digital lending is enabling easy access to credit for individuals and SMEs, the infiltration of predatory lending practices presents the need for more active regulations in the space.
Going forward: As an interim step to establishing a clear regulatory framework for the sector, FCCPC has developed a Limited Interim Regulatory/Registration Framework and Guidelines for Digital Lending which has been adopted by the inter-agency Joint Regulatory and Enforcement Task Force.
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Visa Inc. sets up in Kinshasa, DRC
The news: Visa Inc. has expanded its digital payments into the Democratic Republic of Congo (DRC). Visa has established a physical office in Kinshasa to enable its business operations and work closely with the government and financial ecosystem to bring the benefits of digital payments to consumers, merchants, and partners.
Additionally, Visa is introducing two initiatives to drive financial inclusion and job creation within the DRC. A new program being launched with Vodacom will drive financial inclusion for women living with disabilities and a three-year partnership with FPM where Visa will grant $1 million to a financial education program targeted at cooperatives, mobile money operators and learning institutions.
Why it matters: Although fintech and mobile money services are accelerating financial inclusion in sub-Saharan Africa, DRC is still behind—the estimated overall rate of financial inclusion in the country is 26%, and the country is one of the poorest in the world with more than 70% of its residents living on less than $1.90 per day as of 2018.
"The DRC is one of the most dynamic countries in Africa, and we are pleased to establish a local presence. By working closely with public and private sector partners, we have a shared goal to expand access to digital commerce and support the goals of the DRC economy," Al Kelly, Chairman and CEO, Visa said.
Zoom out: Per a report by Microsave and Mastercard, DRC’s fintech landscape is practically nascent with only 12 startups playing in the space as of 2018. The report identified poor internet accessibility and affordability, weak electric grid and ease of doing business as some of the challenges facing the fintech and innovation ecosystem in the country.
Microtraction's $15 million pre-Seed fund for Africa
The news: Microtraction, an early-stage venture capital firm based in Lagos has secured $15 million for the first close of its community fund to invest in pre-seed stage startups in Africa.
Founded by Yele Bademosi and Kwamena Afful in 2017, Microtraction has invested in 36 companies comprising 83 founders across two funds in Nigeria, Ghana, Kenya, and Rwanda. The VC firm has spread its portfolio across fintech, healthtech, SaaS, edtech, crypto, gaming, and mobility.
These companies—including 54gene, Cowrywise, Helicarrier, Lemonade Finance and Bitsika—have raised over $100 million in follow-on funding, currently valued at $760 million combined, and have created 900+ jobs.
Use of fund: With this fund, Microtraction intends to make first cheque investments into a minimum of 60 African startups. "Up to ~20% of those investments will get the quick top-up in their next round. So far, 20 investments have been made through this community fund," the firm disclosed.
Microtraction also disclosed that the LPs in its latest community fund are made up of over 30 venture-backed founders of African companies including; Helicarrier’s Ire Aderinokun, Paystack’s Shola Akinlade, Cowrywise’s Razaq Ahmed, 54gene’s Francis Osifo, Piggyvest’s Odun Eweniyi, Paga’s Jay Alabraba, Spleet’s Tola Adesanmi and Float’s Jesse Ghansah.
💰 BD Africa Funding Tracker
Agritechs in Kenya are getting funded ahead of other parts of Africa.
iProcure becomes the third in the line of Kenyan agritechs to raise/announce a round this year. The other two were Apollo (Series B of $40 million) and Victory Farms ($5 million), according to this Funding Tracker. In comparison, only two Nigerian agritechs have raised a round this year ThriveAgric's Debt Series B of $56.4 million and Hello Tractor's $1 million.
Get free access to our carefully-curated, real-time updated Funding Database for 2022.
Here are other important stories in the media:
- Bank of Ghana has launched its Regulatory and Innovation Sandbox: Following a successful pilot implementation, Bank of Ghana has leveraged EMTECH's regulatory reporting APIs to make sandboxing developer-friendly for new fintechs and banks.
- How to buy dollars from the Central Bank of Nigeria: This article is broken down into a background story about USD in Nigeria and then the actual step-by-step guide on how to buy dollars from the Central Bank of Nigeria.
- Getting a fintech-related licence in Nigeria: Compliance is a critical issue in the incorporation and operation of a startup, Stephen Oluwadara examined the requirements for fintech-related licences in Nigeria.
- How poor electricity supply affects remote work in Nigeria: Last Wednesday, Nigeria was thrown into darkness following an industrial action by electricity workers. Remote workers are one of the facets of the economy that was most affected by this blackout.
🧩 BD Trivia of the Week
Female founders are rare in tech's male-dominated field. Our last BD Trivia was dedicated to promoting and sensitising others about them.
Please spread the word and participate.
Every week, we carefully curate open opportunities in Product & Design, Data & Engineering, and Admin & Growth.
Product & Design:
Data & Engineering:
- Carbon — Senior Platform Engineer
- Interswitch — Head of Tech and Ops
- TeamApt — Software Engineering Manager
Admin & Growth:
- Binance — West Africa Regional Director
- Visa — Marketing & Digital Director
- Klasha — Sales Account Manager
- For postgraduates: Chevening scholarship applications are now open, fully-funded scholarships to undertake any master's course at any UK university
- For startups: Apply for the Smile For Success program to get $10,000 in usage credits to enable identity verification at your startup.
- For African early-stage startups: MEST Africa opens application for $50k Africa Challenge.
- For women (and men): Apply for Stutern's African Tech Sis Scholarship to get 50% off to learn Product Design, Frontend, and Backend Engineering.
- For Lagos-based fintech and proptech startups: The ARMS Labs Lagos Techstars Accelerator Program is now accepting applications from early-stage African fintech and Proptech startups.
- For women entrepreneurs in Côte d’Ivoire: DigiFemmes opens application, aims to empower women with data and digital skills to help grow existing or new businesses.
Thank you for reading.
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