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In Conversation with Ezechi Britton

John Nielsen

John Nielsen,

Johannesburg

Richard Welfare

Richard Welfare,

London

15 November 2016

Johannesburg associate John Nielsen interviews Ezechi Britton, Chief Technology Officer at Neyber, an employee based alternative lending platform, about their use of technology and how Fintech can liberalise Africa's banking sector.

So what is Neyber and how did it come about?

Ezechi:I co-founded in 2014 to pioneer a new model of borrowing that enables employers to offer loans to their employees at affordable rates. Employees apply for a loan using Neyber’s online platform and once approved their repayments are taken through salary deduction technology that integrates directly with their employer’s payroll. By offering this as an employee benefit to employees through their employer, and deducting repayments via payroll, Neyber can originate loans at a lower cost of acquisition, and pass this cost saving directly back to employees through cheaper rates of borrowing.  

In what way does Neyber leverage technology to differentiate your service offering?

Ezechi: Technology is an enabler, so some people consider us a lending business, some people consider us a tech business.  From my perspective, Fintech enables us to fundamentally differentiate our offering by reducing costs and making it easier to connect to employers.

Technology allows for a truly international integration. For example, we have key partners who have helped facilitate that ability based around the world. Partners like ITM Limited who are in the pensions enrolment space and through their technology we are able to integrate with employer's payroll, resulting in the remittance being streamlined and cheaper.

We also work with a partner in India called Cloud Lending who build their lending platform on sales scores, which helps reduce our costs and overheads in terms of development and support. That in turn allows our technology team to enhance Neyber's operating focus on the value-adds, like new products and all the other cool stuff that we want to focus on. 

At its heart Neyber is about efficiently using resources and appropriately collaborating with key partners around the world, and that’s why Africa is well-placed to benefit greatly from these technologies.

How did you develop the strategy for your pricing model and does it help that money is currently relatively cheap in the UK post-Brexit?

Ezechi: In our business, pricing and timing is key.  We originally started off on a flat rate across all bands.  That was a very original proposition, but we quickly discovered that is was not feasible as it encourages adverse selection. We wanted to keep it transparent around what we were doing, so we avoid having tranches.  This is important as it gives us flexibility within boundaries to make funding decisions.

A similar model could easily be applied to lending in Africa. Although there isn’t a structured credit profiling system in place, Fintech allows for capturing such data and therefore better assessment and judgement of creditworthiness.

Is Neyber's model focused on big corporates with large work forces? Do you think a similar approach is needed for Africa or could this be applied to government institutions also?

Ezechi:  Yes, ultimately we are looking at a wide array of employers - from start-ups up to large corporates, most recently we have landed some sector leading companies, so we have got quite a wide spread.  However, our biggest client is the UK Police Service as well as a number of NHS Foundation Trusts, so yes, government institutions are ideal for this type of product offering.

At the end of the day our mission is to provide everyone access to fairer finance. Although in Africa the banking system is far less sophisticated and a huge number (over 70% I think) are unbanked, the mission is the same but the opportunity is greater.

In your opinion, what technology has allowed Neyber to become significantly more scalable and agile?

Ezechi:  Undoubtedly Cloud technology. It gives us the ability to reduce our costs in terms of DR and be more flexible where we place our resources. A major part of it is the technology platform, but equally important is the technology that we use to collaborate.

We use the appropriate tools to build what we need as opposed to a one size fits all approach.  This helps avoid building too much redundant legacy technology as well. What's better is that because it's in the cloud it is accessible anywhere in the world so is ideal for emerging markets.

In Europe you have internet access and technology at your fingertips but Africa is a far away from that. What do you think it is going take to improve internet access and the uptake of Fintech through Africa?

Ezechi: I am really glad you asked me that in particular as I am particularly interested in the nature of telecoms and data in Africa.  My mother is Nigerian and I think there is a really interesting issue here which is that the West are continually building more and more data heavy applications on Facebook, Twitter, Linked-in etc which are then pushed out into other territories.

But if those territories don't have that data handling capability it is just not feasible. 

What is really fascinating about Africa in general is that existing infrastructure companies using Fintech aren't actually disrupting anything! They are innovating.

In the West we are disrupting the banks and financial service providers because they are established and we are coming up with alternatives to eat away at their business models. But that’s not the case in Africa where a large proportion of the population are just not served.  Proof of identity and identity verification is pretty core to almost everything that Fintech services are trying to achieve so overcoming that hurdle is hugely important.

Fintech companies in Africa aren't disrupting they are building entirely new ecosystems and infrastructure so the chances and opportunities that are out there are immense. Fintech companies like ours provide for natural organic growth within Africa as opposed to being imported from the West. 

So you believe Fintech can act as a liberator of sorts?

Ezechi: Absolutely. 

For example Neyber could, in partnership with local Fintech companies, perform salary deductions through mobile wallets for people who are in a good employment, thereby providing access to fair loans through a system that people know, understand and are now comfortable with.    

John Nielsen

John Nielsen,

Johannesburg

Richard Welfare

Richard Welfare,

London

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