Africa - Afrikan Heroes

Kenya: How Smallholder Farmers Can Benefit From The Newly Signed EU Bank ’s EUR 50 Million Deal For Smallholder Farmers

June 17, 2019

Good news for small-scale farmers in Kenya. This is a huge opportunity to benefit from the newly signed deal between the European Investment Bank and Equity Bank of Kenya. The two banks have signed an Sh5.7 billion (EUR 50 Million) deal to finance agricultural development in the country.

Here Is The Deal

In the deal with EIB, Equity Bank through the program termed Kenya Agriculture Value Chain Facility will provide smallholder farmers and small agriculture-based Small and Medium-sized Enterprises (SMEs) with credit to expand their operations.
Working with Equity Bank across the country, the new Kenya Agriculture Value Chain Facility will help agriculture companies to modernize and harness the full economic, employment and export potential of agriculture as well as expand business with local smallholders.
The European Investment Bank aims to extend the project to other financing partners in the future with a focus on service providers expanding their reach to rural communities and smallholder farmers.
Agriculture is the leading source of economic activity, employment, and exports in Kenya. Agriculture contributes directly and indirectly to 51% of Kenyan GDP and accounts for 60% of jobs in the country.

Who May Get The Loan?

The loan program is strictly for agriculture companies and ventures that intend to modernize their ventures as well as embark on agriculture projects that are capable of creating employment opportunities for Kenyans. Agricultural businesses that are also interested in expanding their venture capacities may also apply. The enterprises targeted include Value Chain SMEs in agribusinesses that are supporting a smallholder farmer base.

“Equity Bank has aligned its strategy with the Big Four agenda, which includes agriculture, and our focus is on growing the agribusiness portfolio through servicing all segments from retail to SME to large enterprises and corporate banking customers,” said Equity Bank Kenya Managing Director Polycarp Igathe.

Is The Loan Attractive Enough For Kenyan Small Scale Farmers?

The sum of £50 Million has been budgeted to make this happen. This is the first ever dedicated support for long-term investment by agriculture companies in Africa backed by the European Investment Bank, the world’s largest international public bank.

When procured, beneficiaries will have up to seven (7) years to pay back. This is expected to take care of the highly risky agricultural sector mostly affected by adverse weather patterns.

The maximum amount of loan to be procured by the beneficiaries is 50% of the project cost as long as the beneficiaries are eligible.

Presently, the duration of most loans in Kenya is 12 months. 7 years to pay back the principal sum is a big edge. The new funding would be made available in Kenya Shillings. This will mitigate exposure to foreign exchange risks that currently hinder agriculture investment in Kenya.

“It is good to see the European Union’s bank, the European Investment Bank, partner with Equity Bank. This is the first time the EU funds the private sector in the agricultural sector in Kenya directly. There is a great deal of expectation on this new approach. The EU chose it in Kenya because we recognize that smallholder farmers do not need handouts: they need an enabling environment to be successful market operators. This requires access to finance and reducing the risk of investing in a difficult environment.” said Walter Tretton,Chargé d’affaires of the European Union delegation to Kenya.

Which Bank To Get The Loans From?

Equity Bank is the only Kenyan bank to get the loan from, in the meantime.

Equity Bank is the first Kenyan partner to participate in the Kenya Agriculture Value Chain Facility and other financial institutions are expected to join later. Equity Bank is one of the key financial institutions supporting the agricultural sector in Kenya and is a leading provider of financial services to rural communities and smallholders, the EU bank noted.

The EIB also noted that Equity Bank has identified the potential for growth, by adding medium size and large commercial farmers to the Agriculture portfolio as well as focusing on the financing of the Agri-Food processing companies.

Since 2007, the European Investment Bank has made available one billion euros (Sh114 billion) for private sector investment in East Africa through credit lines in both local and international currency in partnership with more than 25 banks and financial institutions.

Equity Bank Now Has Branch In Addis Ababa Ethiopia

Small scale farmers and businesses in Ethiopia may also now benefit from Equity Bank’s line of credit. This is because the bank has set up a commercial representative Office in Addis Ababa, Ethiopia as it prepares to expand into the hitherto protectionist economy. The bank’s Ethiopia branch is expected to be fully operational next month.
The entry into Ethiopia, a country with a population of nearly 100 million people, follows the Government’s appointment of a privatization commission and the ongoing reforms which are aimed at promoting a growing private sector.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

At Last Ethiopia Opens Up Its Telecom Industry, Bidding To Start September

June 16, 2019

At the moment, there is no MTN, Airtel, Safaricom, Vodafone or any other mobile telecom operator in the East African country of Ethiopia, but that will no longer be the case before this year ends. The country is set to award its first set of telco licenses to multinational mobile companies by the end of 2019.

Before this happens, Ethiopia’s government has continually monopolized the country’s telecom industry. Hence, this is expected to end a state-wide monopoly and open up one of the world’s last major closed telecoms markets.

When This Happens, Investors Would Be Looking At Ethiopia’s Population As A Big Bait

With a population of 105 million people, the second most populous country in Africa after Nigeria will be baiting in squads of investors.

“There will be a bidding war. It’s the last greenfield site. There’s an opportunity to be market dominant,” said one company executive.

A law to create the new watchdog — the Ethiopian Communications Regulatory Authority — is already being debated by parliament. The new telecoms regulator will issue the licenses when the law is approved and this institution set up.

“By this time next year, we hope that many Ethiopians will be using different SIM cards. We are operating on a very aggressive timeline,” Ethiopia’s State Minister of Finance Eyob Tekalign Tolina said.

Vodafone, South African operator MTN, France’s Orange and Etisalat of the United Arab Emirates are likely to be among the leading contenders vying for entry into the Ethiopian market. Senior executives from those companies attended a telecoms conference in Addis Ababa this week and met with government officials.
The bidding process for two licenses will open in September and the licenses would be awarded in December.
Company executives who met with government officials this week were told to expect an announcement on the liberalization plan, possibly next week.

A Look At Ethiopia’s Telecom Market

Right now, the average rural inhabitant of Ethiopia has to walk 30 kilometers to the nearest phone. The ETC announced 7 September 2006 a program to improve national coverage and reduce the average distance to 5 kilometers. The ETC has also stated that the rural telecom access within 5 km radius service has currently reached 96 percent.
Since 26 September 2017, it is not possible to buy and use Ethio Tel SIM cards in mobile devices that haven’t been purchased in Ethiopia or registered with the authorities.
As of 2012, 20.524 million cellular phones and 797,500 mainline phones were in use.
Use of voice over IP services such as Skype and Google Talk was prohibited by telecommunications legislation in 2002.
In 2007, there were just 89 internet hosts. There were 447,300 internet users in 2009. In 2010, just 0.75 percent of the population was using the Internet, one of the lowest rates in the world.
Telecommunications in Ethiopia is a monopoly in the control of Ethio Telecom, formerly the Ethiopian Telecommunications Corporation (ETC).

With the proposed new reforms, Ethiopia would be seeking to liberalize the country’s economy.

Government officials are already looking at several potential options, including the sale of a minority stake in Ethio Telecom, granting of new licenses to multiple telecoms operators or a combination of both.

The government will expect the winning companies to start operations next year, initially using Ethio Telecom’s infrastructure to run their networks, the sources said.

Ethiopia’s potential as an untapped market could outweigh concerns about any risks, including Ethiopians’ low-income levels and the country’s over-valued birr currency.

There are 31 countries in Africa where there is a state-owned incumbent telco that is either dominant or has monopoly privileges that hamper the growth and efficiency of the market.

These are: Algeria; Angola; Benin; Burundi, Cameroon, Central African Republic, Chad, Comoros, Congo-Brazzaville, DRC, Djibouti, Egypt, Equatorial Guinea, Eritrea, Ethiopia, Gambia, Guinea, Guinea-Bissau, Libya (which has several state entities), Mali, Mozambique, Namibia, Niger, Sao Tome, Sierra Leone, Swaziland, Tanzania, Zambia and Zimbabwe.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

Angola: Africa’s Richest Woman Is Offering to Buy 25.6% of One of Brazil’s Leading Telecoms

June 15, 2019

Africa’s richest woman Isabel dos Santos is poised to widen her wealth margin. Her latest offer is for a 25.6% stake, representing € 1.2 billion in one of Brazil’s leading telecom operators, Oi.

Here Is The Deal:

Isabel dos Santos is making a preliminary offer for the acquisition of shares of Portugal Telecom SGPS, a company in the process of merging with Oi, for a total of € 1.2 billion.

Hence, if the merger becomes successful and Isabel finally acquires the 25.6% stake in Portugal Telecom SGPS, she would invariably be holding a 25.6% stake in Oi Telecom.
But it appears she is doing this as a strategy to block the sale of Portuguese Telecom assets by Oi, of which she may be affected. In the merger with Portuguese Telecom, the Brazilian Oi Telecom incorporated the PT Portugal subsidiary, which brings these assets together.
In order to raise funds for the consolidation of the telecommunications market, Oi is going to sell the operational PT after the merger.
The move comes just days after European group Altice voiced interest in the PT’s assets in Portugal for about € 7 billion. Terra Peregrin, controlled by Isabel, said it was willing to pay € 1.35 per share of PT, an 11% premium. But Isabel appears to have an edge because she is a shareholder of the Portuguese operator competitor NOS. The negotiations for the Portuguese assets continue and new proposals may be presented.

The eventual offer of £1.2 billion by Isabel is coming with a condition: Isabel wants the merger between PT and Oi to be suspended until the 30th day after the settlement of the offer. The Board of Oi seems stuck at this point. It recently announced that it is considering “untimely” changes in agreed terms in the process.

Isabel is not seeing this deal as a hostile one at, all. Her spokesman told Portuguese newspapers that the offer for the shares of PT SGPS is not “hostile” and has as its objective the acquisition of a minority stake in Oi, allowing the maintenance of the Portugal Telecom group unit.

Once the merger is completed, the holding company PT SGPS no longer has the assets but has a relevant stake in Oi and the right of veto in strategic decisions. The share of PT SGPS in Oi is 25.6% and may be raised to 37.3% within six years.

The movement, according to the spokesman, was made in harmony with the objectives set out in a joint statement issued by Zopt last week. Zopt, the operator of the operator NOS, announced that it entered the battle for PT to defend the “national interest”.

But The Price Offer May Be Far From It

£1.2 billion? That may seem a serious far-cry from analysts. The Association of Investors and Technical Analysts of the Capital Markets, an entity that brings together minority shareholders of PT, has since issued a statement in which it supports the increase of the offer to € 1.94 per share – the value corresponds to the average share price in the six months prior to the offer.

Shares in Portugal Telecom, Lisbon, closed up 11.83%, to € 1.36 on Monday. Oi’s preferred shares rose 6.67% to R $ 1.28.

“If the offer is in fact serious and with the intentions described, the offeror should review it for the purposes of mandatory bidding, in particular by adjusting the counterpart (…). Otherwise, said offer can only be understood as a fun and strategic maneuver aimed at other interests, “the statement said.

A Simpler Picture

Portugal Telecom SGPS is a holding company that is a partner of the Brazilian operator Oi, with 25.6% of the shares.
The stake was originally 37.3% but was reduced after Portugal Telecom bought 897 million in commercial paper from Rioforte, an arm of the Espírito Santo Group (GES), without the knowledge of the Brazilian operator’s direction and despite the economic fragility of the conglomerate, of which PT is a member.
The company took default in July. In addition to having a reduced share in Oi, PT SGPS is also the “owner” of the debt left by Rioforte. As Gores, owner of Rioforte has entered into judicial reorganization, the market finds it unlikely that the money will be recovered.
Isabel is considered a symbol of the “influence of power and wealth in Angola,” according to the Financial Times.
In an interview published in the diary in 2013, the Leading Business Woman of Africa described herself as an ordinary person, who drives on her own in Luanda and faces traffic like anyone else.
Africa’s richest woman’s fame, however, is that of an influential business woman who has created thousands of jobs to Angolans. “I do business.”

Isabel Dos Santos At A Glance

Aged 46, with a net worth of $2.3 billion, Isabel Dos Santos is the 8th richest person in Africa. She owns shares of Portuguese companies, including telecom and cable TV firm Nos SGPS.

In one of her interviews, Africa’s richest woman shared her advice to entrepreneurs:

‘‘Your best business bet is you, your skills, your motivation, and your passion.
You must have an idea, make a five year plan, prepare your money, ground your idea in detail, be persistent, and partner yourself with a trusted team. Stay passionate always, and execute — don’t delegate.’’

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

Kenya: $5m New Investment In Agri-tech Startup Twiga Foods Makes It One Of The Most Funded Startups So Far In Africa

June 14, 2019

African startups are not looking back. Kenyan agri-tech startup Twiga Foods has received a US$5 million secondary investment from France’s richest family, the Mulliez family, to support its growth, making it one of the top-funded startups in Africa for the year 2019.

The startup is one of the best-funded on the continent, securing a US$10.3 million Series A funding round in 2017 and a further US$10 million last November, and has now raised an additional US$5 million from the Mulliez family’s investment firm Creadev.

As part of the secondary transaction, early investors in Twiga Foods including Adolf H. Lundin Charitable Foundation, Blue Haven Ventures, Crescat Limited, Omidyar Network, and Index Ventures have partially sold their stakes in the startup as it looks to accommodate later-stage investors.

“Having Creadev join our shareholding is a huge boost to our mission to deliver safe, affordable high-quality food to urban consumers, while providing reliable markets for farmers. It will support our efforts towards growing our ecosystem of farmers and retailers,” said Twiga Foods chief executive officer (CEO) Peter Njonjo, who recently joined the company after 21 years at Coca-Cola.

Sarah Ngamau and Pierre Fauvet, Africa heads for Creadev, said they were proud to enter into a long-term partnership with Twiga as the startup answers a massive market need — the structuration and formalization of the food logistics supply chain.

“We are impressed by Twiga’s fast growth, driven by an experienced and result-oriented management team. We believe the appointment of Mr Njonjo as CEO is another proof of Twiga’s ambitions and willingness to grow to the next level,” they said.

“We will leverage on Creadev’s international retail network and future funding capacity to support the team in executing this ambitious expansion plan and continue delivering their strong value proposition to small-holder farmers, informal retailers, and end customers.”

What The Startup Does

Founded in 2014, Twiga Foods is a business to the business food distribution company that builds fair and reliable markets for agricultural producers and retailers through transparency, efficiency, and technology.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

Foreign Investment In Africa Increased By 13% With South Africa, Congo, Ethiopia, Ghana Leading The Largest Investment

More foreigners are starting to commit more funds to Africa by way of investment. African countries put together saw a 13% inflow of foreign investment in 2018 alone according to the United Nations Conference on Trade and Development. Aggregate investment volumes climbed to $32 billion, challenging a global downward trend and reversing two years of decline.

Which Countries Foreigners Are Choosing To Invest In

At the head of all these are some African countries which performed better than others. A breakdown of the performance of African regions and countries is as follows:

The Southern Africa region performed the best, taking in FDI of nearly $4.2 billion, up from -$925 million in 2017.
Foreign investment in South Africa more than doubled to $5.3 billion. Though much of the South African jump came from intracompany loans, new investments included a $750 million Beijing Automotive Group plant and a $186 million wind farm being built by the Irish company Mainstream Renewable Energy. President Cyril Ramaphosa, who took office last year pledging to revive the economy, is seeking to attract $100 billion in FDI to Africa’s most developed economy by 2023.
Investments in northern Africa jumped seven percent or $14bn from the previous year. This increase in FDI helped to offset less investment in Egypt, which was down eight percent. However, despite the decline in FDI for Egypt, UNCTAD data shows that the country was still the largest recipient of FDI continent-wide.
Ethiopia remained East Africa’s top recipient of FDI at $3.3 billion, despite an 18% drop compared with the year before. Kenya, another East African country, received $1.6bn worth of FDI. These investments were mainly in manufacturing, hospitality, chemicals, and the oil and gas sector.
Generally, Kenya, Uganda, and Tanzania all saw increases in FDI inflows. Foreign investment in Uganda jumped 67% to a record $1.3 billion, boosted by the oil and gas development of a consortium that includes France’s Total, CNOOC of China and London-listed Tullow Oil.
Ghana, which is in the midst of an oil and gas boom and saw inflows of $3 billion, making it West Africa’s leading destination for foreign investment. Italy’s Eni Group was behind Ghana’s largest greenfield investment project.
By contrast, inward FDI to Nigeria, a major oil producer, plunged 43% to $2 billion. Investors were put off by a dispute between the government and South African telecom giant MTN over repatriated profits. Banks HSBC and UBS both closed representative offices there in 2018.

**Op investor economies in Africa, 2013 and 2017**
(Billions of dollars) Source: UNCTAD

AfCFTA Is Going To Be A Game Changer

Much like the European Union, the newly ratified African Continental Free Trade Area Agreement could be a huge game changer on FDI, especially in the manufacturing and services sectors.

“The ratification of the African Continental Free Trade Area Agreement could also have a positive effect on FDI, especially in the manufacturing and services sectors,” the report said.

The AfCFTA aims to eliminate tariffs between member states, creating a market of 1.2 billion people with a combined GDP of more than $2.2 trillion.

Also the development of new mining and oil projects, a new U.S. development-finance institution could further boost foreign direct investment (FDI) in 2019, the report said.

**Africa: economies with the most SEZs, 2019**
(Number of zones) Source: UNCTAD

Again, the creation of the U.S. International Development Finance Corp could help support FDI inflows this year. A replacement for the Overseas Private Investment Corp, it will have a budget of $60 million and a mandate to make equity investments.

Right now, Africa stands in sharp contrast to developed economies, which saw FDI inflows plunge 27% to their lowest level since 2004, the United Nations Conference on Trade and Development wrote in its “World Investment Report”.

**African FDI Inflows: Top 5 Recipients**
(Billions of dollars). Source: UNCTAD

Comments

This report shows Africa is continuously becoming a new market for international investors. Indeed, this new report shows Africa is defying the current slowdown in global foreign direct investment. In fact, for the third year in a row, foreign direct investment (FDI) is down all over the world, but not in Africa. In 2017, France was the top foreign investor in Africa, followed by the Netherlands, the United Kingdom, and the United States. Critically, UNCTAD’s data shows that from 2013 to 2017, Chinese FDI in Africa grew 65 percent, only topped by the Netherlands, for which FDI was up more than 200 percent. Most African countries are also resorting to creating zones. In fact, in 2018, Burkina Faso, Côte d’Ivoire, and Mali launched an SEZ spanning border regions of the three countries. Similarly, Ethiopia and Kenya recently announced their intention to convert the Moyle region into a cross-border free trade zone.

UNCTAD notes that stronger regional cooperation also creates scope for more ambitious regional and cross-border zones.

This is exactly what AfCFTA is proposing. So expect more inflows of FDI before this year ends, but mostly in countries that have agreed to be part of AfCFTA.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

Three Months After Launch, South Africa’s First Digital Bank Hits 500,000 Customers.

June 13, 2019

The stage is set for South Africa ’s new fully digital bank, TymeBank. The bank is on track to hit one million customers by the end of the year. Its current customer base is just a few numbers close to 500,000 customers.

A Look At TymeBank

If you are looking to find any physical branch of the bank in South Africa, you may have to look harder. This is because there is none. The branches exist only in the clouds, that is, the bank is only digitally focused. In February, it launched its EveryDay transactional account bundled with a savings tool called GoalSave, its MoneyTransfer solution, and its TymeCoach App, which gives consumers free access to their credit report, supported by tips on how to make better decisions about the money.

“We are planning to introduce credit products later this year, as well as an SME (small medium sized enterprise) proposition, but for now our focus is on getting simple and cost-effective banking solutions into people’s hands,” said TymeBank chief executive officer, Sandile Shabalala. “Our mission is to drive meaningful financial inclusion, by making banking more accessible to all South Africans. We see it as our responsibility to take the complexity out of banking for consumers and to give them insights into how the financial system works.

“We believe that uncomplicated banking coupled with relevant knowledge will empower people to make more informed and responsible decisions about their own financial futures. Why shouldn’t banks be more transparent with customers about what they are paying for?”

TymeBank is owned by African Rainbow Capital (ARC) Financial Services, a company within billionaire Patrice Motsepe’s Ubuntu-Botho Investments stable. It is South Africa’s first majority black-owned bank focused on retail and business banking.

ARC bought the bank from the Commonwealth Bank of Australia in November 2018.

“TymeBank brought synergies that are complementary to ARC’s existing insurance and asset management businesses. Given ARC’s focus to, mostly, invest in businesses with established client pools, we’ll be looking for synergistic opportunities to the benefit of both the client and TymeBank,” said Tauriq Keraan, deputy CEO of TymeBank.

The latest figure came from the digital bank ’s latest investor prospectus, which detailed its customer acquisition since launching in February.

Chief executive officer, Sandile Shabalala said the group is averaging 100,000 new customers each month.

After bringing on board around 40,000 clients during its ‘soft launch’ phase between November 2018 and February 2019, the bank moved to a high growth phase where it was adding 4,000 new clients a day.

The bank said that it has a total addressable market of around 21 million customers in the middle market, as well as 2 million small-to-medium enterprises, which opens up the potential for products and services it wants to introduce.

TymeBank is looking to disrupt traditional banking in South Africa whose operations are usually expensive to maintain.

“We are leveraging our cloud-based technology which doesn’t come with a legacy burden and it’s one of the many reasons we’re able to pass cost savings onto the consumer. We have built an open banking platform, which allows us to move with speed with the partners we engage with,” said Shabalala.

The Bank Is Relying On Partnership As Its Strength Both For Money Deposit Or Withdrawal

TymeBank has created a network of partners including Pick n Pay and Boxer, with the former’s Smart Shopper program now fully embedded into TymeBank’s technology stack.

“We’ve partnered with companies whose business ethos aligns with what we want to do in the market, which is to do good. The customer will always be at the centre of our banking practices and going forward we will be doing some really exciting things with our partners, it will go way beyond just occupying floor space,” said Shabalala.

The implication of joining forces with Pick n Pay and Boxer stores is that TymeBank now has access to a relatively significant distribution edge.

“By the time we complete our bank kiosk roll-out we will have 730 points of presence where customers can open accounts inside a Pick n Pay or Boxer store — we have over 500 bank-enabled kiosks in the market today.”

Even in stores without a bank-enabled kiosk, customers can still do their everyday banking transactions, TymeBank said.

As part of its acquisition strategy, TymeBank said it will further leverage its partnership with Pick n Pay and Boxer stores, which gives it access to 730 physical stores across the country, where customers can withdraw money free of charge and deposit money for just R4, said Shabalala.

“We have a strong proposition, which competitors will find hard to match right now and the tens of thousands of customers that have opened and are using their accounts are testament to that,” said Shabalala.

TymeBank is part of a trio of banks launching into the South African market in 2019, with the other two banks including Bank Zero, the brainchild of former CEO of FNB, and Discovery Bank.

Again, Rain has recently entered into a partnership deal with Tymebank to test the distribution of its SIM cards at Tyme kiosks, making it easier for its clients to sign up for a new service.

TymeBank’s Strategy Is To Make It Simple and Cheap For Customers

Indeed, signing up to the digital bank could cost little or nothing. No documents are required and no charges demanded.

To open an account, you need a South African ID number and a South African cellphone number, which the bank verifies through several questions and a One-Time PIN (OTP).

If the process is done at a kiosk, biometric data will be captured and compared to the data with Home Affairs, which is connected to the Tyme systems, and a free Visa debit card is issued immediately.

If done online, you will have access to your account, but it will be limited in how much you can transact until you go to a kiosk and “upgrade” your account (for free) to a full account through capturing biometric data and registering your residential address.

Getting a debit card is free and immediately.

Service Fee for new registration is free. There is no monthly account or withdrawal at Pick n Pay and Boxer stores, only R2 at other major retailers.

By July 2019 Customers Can Borrow From TymeBank Without Collateral

TymeBank’s CEO, Sandile Shabalala, has also told analysts and investors that the digital bank would start piloting unsecured term lending in July and a credit card in partnership with consumer lending company RCS later in 2019.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

Kenyan Logistics Startup MPost Completes Pre-Series A Round of Funding

June 12, 2019

More startups in Africa are simply moving ahead of others, and faster. Kenyan logistics startup MPost is the latest to join this league.

The amount of fund raised by the startup was not disclosed, but the funding came from South Africa’s Cape Town-based VC firm HAVAÍC.

“We are excited that Havaic is investing in MPOST. As a seasoned investment and advisory firm, HAVAÍC will undoubtedly bolster MPost’s growth and impact in the region. This is a vote of confidence in our product and indeed our vision as a company,” said chief executive officer of MPostAbdulaziz Omar was quoted as saying.

The startup which has developed a patented technology allows users to transform their phone into a unique mobile postal address and mobile postal box.

“This partnership with Startupbootcamp, HAVAÍC and MPost will enable us to enhance the efficiency and user experience of the product, and improve the long term benefits to our clients and stakeholders,” said chief technology officer (CTO) Twahir Mohamed.

MPost At A Glance

The startup was founded in 2015 by Abdulaziz Omar and Twahir Mohamed. The startup allows mobile phone numbers of its users to be converted into official virtual addresses which will allow the users to be notified whenever they get mail through their postal addresses.

The startup has already gained 40,000 users, mostly as a result of its partnership with the Postal Corporation of Kenya. It has been primarily self-funded but obtained some angel investment last year. The latest round of funding comes from established investment and advisory firm HAVAÍC, which also plans to participate in MPost’s forthcoming Series A round.

HAVAÍC’s Rob Heath, the partner responsible for pan-African and international business at the firm said HAVAIC invested in the startup because:

“After spending time with Aziz and Twahir in Nairobi and seeing the solution in action, it’s clear that this is not just a technology and commercial product. MPost makes a real impact on people’s daily lives and as an investor, it’s rewarding when we can tie these two elements together. That being said, this is a great example of African problems producing global solutions — one of the cornerstones of our investment thesis at HAVAÍC.”

MPost is further moving to Uganda ahead of further launches in Rwanda, Botswana, Tanzania, and South Africa.

Last year, the startup participated in the Startupbootcamp AfriTech accelerator program in Cape Town, where it was introduced to HAVAÍC. MPost will also welcome Startupbootcamp AfriTech co-founder Zachariah George onto the board to represent both his business and HAVAÍC.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

What Kenyan Businesses Need To Know About The New Currency Policy In Place In The Country

June 11, 2019

As you would expect, the first implication of the Kenyan new currency policy (which is that the country’s currency would be replaced with a new generation of banknotes and that Kenyans must return their 1,000 shillings ($10; £8) notes to banks by 1 October, in a bid to fight money laundering, counterfeits, and corruption) is that many businesses would go in for it.

The new currency notes will be in Sh50, Sh100, Sh200, Sh500 and Sh1000 denominations. Although Kenya’s Central Bank Governor Prof Patrick Njoroge said the Sh50, Sh100, Sh200 and Sh500 notes will be phased out slowly, he has however insisted that:

“The emergence of counterfeits has become a great concern. All the Sh1000 notes were withdrawn by a gazette notice on Friday. Those in possession [of the bank notes] have until October 31, 2019 to release them,” said Prof Njoroge who urged Kenyans to have the notes changed.

Below are the implications of the change in this currency policy on Kenyan businesses.

By November This Year, All Those In Possession of The Old Ksh1000 Notes Will Not Be Able To Use Them

This is directive of the Central Bank of Kenya. Mr. Njoroge said the Central Bank of Kenya is giving all Kenyans in possession of the old Ksh1000 a four-month transition period in order to allow them enough time to change the old currency within their possession.

For Kenyan exchanging less than 5m shillings, they would be able to do so at their local bank but any amounts higher than that will need approval from Kenya’s central bank. Those are to seek approval from Kenya’s Central Bank include those without bank accounts and with over Ksh.1million of the old currency.

Another strategy would be to block all ways of exploiting the new policy. The bank is already in talks with managers of foreign-exchange bureaux and money-remittance providers to put in place controls to prevent illicit financial flows.

There is an alleged feeling of desperation among those suspected to be hoarding money acquired illegally and who are hence unable to bank it as they cannot openly declare its source. Such individuals are faced with the challenge of losing the money when it is devalued on 1st October as Kenya officially moves on to the new currency as is dictated by the 2010 Constitution, reports Kenya’s Investment Company Soko Directory

Commercial banks are expected to obtain confirmations from customers on the nature of their businesses that generate the respective large cash transactions.

Kenyan Shillings Can Be Used Once In A While In Uganda and Tanzania, But This Is No Longer Going To Be The Case

With this new policy, Kenyan businesses using Kenyan shillings to transact or do foreign exchange businesses in Uganda and Tanzania will not be able to do so again. Mr. Ngoroge has communicated to banks across the East African region where Kenyan shillings is often used as a legal tender to ensure that Kenya’s illegal money did not get exchanged in their countries. To this effect, the Bank of Uganda, Uganda’s highest bank has mandated all banks in Uganda to stop accepting Kenyan currency at the counter.
A statement from Uganda’s Central Bank said the move is aimed at boosting Kenya’s fight against counterfeits and illicit flows.

“The Central Bank of Kenya has informed Bank of Uganda that they have issued a new series of Kenya banknotes effective May 31, 2019…..in light of new developments, BOU will not accept Kenya shillings at its counters with immediate effect,” the notice reads.

The memo also said the new currency is only available in Kenyan banks.
The bank further directed all commercial banks in Uganda to subject all cash flows from and into Kenya to due diligence. The Tanzanian central bank has also stated the same.

The Change Will Most Likely Make More Money Available To Businesses. The Best Time To Borrow May Be Now

With the new move, expect previously hoarded cash to be collected back for redistribution. There are a total of 217.6 million pieces of 1,000 shillings in circulation in Kenya according to a statement by the Central Bank of Kenya (CBK).

The Kenya Association of Manufacturers is leading the pack of those Kenyans who see opportunity from this. KAM chairman, Sachen Gudka has been quoted as saying:

“This change is likely to redirect monies that are presently hoarded and funneled into funding illicit economic activities into the formal banking and lending structures to finance the production of real goods and services.”

He also believed that the move will give citizens a better purchasing power and push for higher demand and supply for local products, and as such boost positive legit businesses in the country.

There Is A Big Question On Whether The Design Of The New Currency Is Constitutional

Article 231 (4) of the Constitution of Kenya states that “Notes and coins issued by the Central Bank of Kenya may bear images that depict or symbolize Kenya or an aspect of Kenya but shall not bear a portrait of any individual.”

Activist Okiya Omtatah has since gone to court to block the new currency over the inclusion of the portrait of Mzee Jomo Kenyatta, contrary to the requirement of the constitution.

The Chief Justice David Maraga has been asked by the High Court to constitute a 3-judge bench to deliberate on the matter.

But the CBK governor has said that design was well within the Constitution’s directions.

Countries That Once Toed Kenya’s Footsteps

In 2016, India changed almost all of its cash overnight, which some critics claim caused long-term financial problems. The Indian government said it was a necessary move to tackle tax evasion and terrorism funding, and in a country where 90% of transactions are in cash, to move towards a cashless society.

Nigeria introduced a similar ban on old notes in 1984 in an attempt to crack down on corruption, as did Ghana in 1982 to help with tax evasion.

This may be a big-time signal for businesses in Kenya to consider storing their cash in foreign domiciliary accounts.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

Swvl ’s Next Bus Stop Is Lagos Nigeria And It Is Next Month

Lagos residents will now have one more online ride-sharing option to choose from by July this year. Egypt’s ride-sharing startup SWVL has announced plans to launch in Lagos, Nigeria in July. 5O buses would be on the road from the date of the launch, according to Swvl’s Country General Manager in Nigeria. This is expected to be a huge challenge to existing ride-sharing options, such as Uber, Bolt, and ride-hailing motor-bike alternatives.

SWVL expects the surging population of Nigeria’s most populous city to be on its side. The startup is already in Kenya and Egypt and has plans to expand to Uganda soon. Other target countries include Thailand and Vietnam, and possibly operations in seven world mega-cities by the end of this year.

Barely 2 years in existence, it is the most funded startup in Egypt.

Swvl’s Business Model

SWVL’s goal is to make it easier for Egypt’s residents to book bus rides at a fixed rate on existing routes.
Users schedule trips, pay online or in cash and are given virtual boarding passes.
Even with fierce competition from the likes of Buseet and Uber vying into premium public transport service, SWVL’s application has been downloaded for well over 360,000 times on Google play store and Apple iStore.
The platform completes 100,000 rides monthly.
It was the first company to introduce the service in Egypt in 2017 before Careem and Uber joined the sector late last year.
Swvl is however different from its competitors because of its series of partnership deals. The startup’s credit facility agreements with Nasser Social Bank and EFG Hermes Bank, and after-sales support and maintenance services with Ford-trained technicians are some of these moves.
What Egyptian SWVL users think about the startup is its priority on affordability, comfort, and safety.

Not Afraid Of Competition

Although Swvl is the first riding app to offer bus services in Egypt, giant transportation startups Careem and Uber have recently offered their own bus services.

Mostafa Kandil, Egyptian CEO and founder of Swvl, has however noted that the joining of Uber and Careem to the industry has not influenced Swvl’s growth asserting that they have witnessed remarkable development since the two competitive players have launched.
In 2018, the startup was valued at nearly US$100 million, becoming the second Egyptian company after Fawry to reach these figures.

The startup has recently signed an agreement with Ford motor company to deploy more cars on the road. Ford Transit, which the startup intends to use is already the third best selling van of all times. SWVL is already in possession of about 100 Ford Transits. Hazem Taher, SWVL’s Head Marketing Manager, said the vans were ready to go and they’re excited to push them on SWVL’s route.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.

Facebook: https://web.facebook.com/Afrikanheroes/

How South Africa’s Intergreatme Raised Over $2 Million Through Equity Crowdfunding

June 10, 2019

Looking to raise capital for your startup through equity crowdfunding? No loans? Just some hard currency from some money messiahs? That is what South African businesses are turning to now. Intergreatme has recently succeeded in raising over R32.7 million ($2.2 million) by simply putting up an online request for equity funding on Uprise.Africa and getting overwhelmed by public contributions. This was a big moment for the startup looking to help ordinary people get rid of the daily pain associated with submitting forms and documents through an innovative technology platform.

The startup was founded by a team of young South Africans three years ago and is now valued at about R120m. The team envisions a world where personal data can easily and securely be shared among a host of applications. As long as an activity requires a person’s information, Intergreatme sees a market.

How The Startup Scaled The Hurdles and Raised The Funds

Narrating how the startup raised the funds through equity crowdfunding, Intertreatme CEO said in a recent interview:

We had no idea how successful it was going to be. We thought it was going to be like a 60 day campaign of climbing Mount Kilimanjaro. We needed to get 250,000 that day and we hoped to just do some cold calls. I printed out my full contact list on my phone and my whatsapp list, my email list, and we thought it’s going to be a campaign. But we had no idea that the demand was more than that. We thought that we could raise the 24 million and we thought that we were going to procure a common amount ever.

For startups looking to use crowdfunding to raise capital, he says they are not just going to put a pretty video online and hope people come and invest. They need to do the hard job behind the scenes.

‘‘There are billions and trillions of dollars of money waiting to be deployed,’’ he says. ‘‘People get paid money to invest money. But your business fundamentally needs to be right. Your team needs to be right. What you plan to do needs to be right. So do those things right. And then you can just sample your user base. Just run a poll on Facebook or Instagram or Twitter, just saying, ‘‘Hey, if we rank car, would you invest? And if so, how much will you? You’ll get, you will get an answer. I don’t think you need to do a lot of work to get those answers.

On the pattern of investing, he said about 402 people turned up and contributed to the startup through equity crowdfunding.

We had minimum commitment of 1000 rand and a maximum commitment of 5 million. We had about five, five millions. Wow. We had a couple of millions. It was so cool. We didn’t expect it. And it was just people. We started by saying, if you’ve used our technology before and you sure that you had the wow moment, would you like to invest in this? Tick this box, if you want. But ultimately they, they invested in us as people.

Before that, we had a very successful launch party, which I think was key to the fundraising, where we had a private donation from our whatsapp list. This was two weeks before that. And we’ve got about 120 investors there. And then we had about 250 people at our launch party when the startup was first started. We used that time not to sell the technicalities of the business, but to sell out emotional stories as founders to show that it’s normal for us to overcome unrealistic odds.

He said the crowd bought into the human stories and not the technicalities.

‘‘We said it’s normal for us to overcome adversity and challenges, that it doesn’t matter what comes our way. It’s normal for us. We will find a way to succeed. And so people bought into the emotional story. They always say, you shouldn’t invest in a business. You should invest in people. And yeah, basically people bought the founder’s shares, in the founder’s energy, in the founder’s vision. And so literally everyone in that room at the launch party made us the first 27 million. And so we sold apps 27 millions in the first 72 hours and there were just a frenzy of people trying to jump on and grab the last time.

I think if you look inside now, it is 32 million, 409,000 rands. So they’ll have to be some refunds for some people who just came in and about a hundred people came in on the last day, like before three o’clock.

On Why They Choose Uprise.Africa to Raise The Funds

He says Uprise.Africa has direct exposure to all the upsides and downsides of the business

‘‘I didn’t know who they were,’’ he says. ‘‘We made it a conference. I related with its CEO as a founder. She said cool. They have a framework and are licensed to do it. So effectively it’s as good as a payment gateway. So if you’re running an ecommerce business and pay fast or need paypal or visa, mastercard go to them for a widget. They can accept payments, but they’re relying on how good your business is .

One of my favorite little proverbs is if a bird is sitting on a tree on the branch, it’s not worried about the branch snapping. It has faith and confidence is in its wings. Crowd funding is an easy way to take money from the crowd, but there’s a context to it. If we show the analytics of the money we raised, everyone is within one or two steps of our network. And so accountability is really your socially accountable tool to your community and your network. If they believe in you, you’re not going to have a much bigger responsibility to them.’’

He says Uprise.Africa will own a 25% stake in the startup.

‘‘They will also have an independent board member. Uprise.Africa will be representing the crowd and yeah, fix me. But there are voting rights and things. So Uprise.Africa has the stake on behalf of the people who invested in the initiative. I think they manage it for about 12 months or so and then they give it to us. They have also put automated technology in place for the share registers and the certificates and the reporting.’’

On Why More Black Women Invested In The Startup Through The Crowdfunding

‘‘I think maybe it’s because we spent a lot of time with Uber drivers and optimistic ladies and all security guards and receptionists. They used our technology and they’re like, sweet, I can get my license renewed. Daily visits to the management system are amazing. So it is just crazy for us because we actually thought that we were so proud that we managed to get 30% black female ownership. They were like, this company’s plan is going to dilute that potentially down to 22%. We had signed agreements to become level two. And so it was a concern. It was just, again, a miracle from the universe that it actually ended up swinging way better than we could give. I’ve imagined it. So I think that’s the beauty of opening it up to the crowd. If you’re focusing on one or two high net worth individuals, you’re kind of going for a specific target.’’

Other Startups In South Africa Are Also Resorting To Crowdfunding

Crowdfunding is having a moment in SA. BackaBuddy, the funding project used to raise money for service station attendant Nkosikho Mbele, for example, has so far generated over R107 million for various causes.

Uprise.Africa CEO and co-founder Tabassum Qadir say the company is in negotiations with one of the new share trading exchanges to have equity crowdfunding investors trade their holdings on its platform.

‘‘Although crowdfunding has long been used to support start-up ventures, equity crowdfunding is different as it enables people to become direct shareholders in a venture, ’’ Qadir says,

This is in contrast to traditional crowdfunding services that generally only allow contributors to get new products from the ventures they support for free.

To ensure that the interests of investors are protected, Qadir says prospective companies need to be vetted by its investment committee. Once approved by this committee, a designated Uprise.Africa board member will act as an overseer of investors’ interests in the company.

In exchange for about R24 000, Uprise.Africa will conduct due diligence and organize a 90-day ‘campaign’ to build interest in the company.

Qadir says using crowdsourcing to support start-up businesses is widely seen as a way to drive economic development. The World Bank, for instance, estimates that the global equity crowdfunding sector will be worth more than $93 billion by 2020.

Without crowdfunding, prospective investors either have to wait for a company to be listed on the JSE or invest at least R100 000 into a venture equity firm’s portfolio to get a stake in emerging businesses. With equity crowdfunding, however, for as little as R1 000, they could get a stake in a company as it is about to enter a fast-growing stage.

Charles Rapulu Udoh

Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.