What really is the correlation between financial inclusion and going cashless? Ideally, I believe the route to going cashless is first being “banked”, which then enables one to go cashless. Unfortunately, inspite of the investment inflows Nigerian fintechs enjoy, majority of these tech startups are primarily offering product varieties to the already banked. In further service of the already “banked” Nigerians, these fintechs further ease access to cash through P.O.S agents. Its not rocket science to make the deduction that widely spread P.O.S agents ultimately encourage cash dependency. This in every sense is counter-progressive to the noble financial Inclusion and cashless economy agenda.

With the above insufficient arsenal going up against a cash based economy like Nigeria, one would wonder why there isn’t a clear sense of urgency to fast track improved financial inclusion and ultimately a cashless society. I will narrow this piece to 3 popular proponents of fintech commonly embraced in Nigeria. These are P.O.S Agency banking (Opay, Eyowo, Klasha etc), mobile banking via ussd (Momo, firstmoney) and application based products (loan products, bnpl platforms, savings apps, investment apps etc).

The prime essence of this submission is to refocus investors, fintechs, policy makers, financial regulators and prospective founders to the real problems which provide the biggest opportunities if explored.

So are you ready? Let’s dive in!

Nigeria’s Fintech Space Is Plagued With Settlement Problems

This can be tracked back to the over dependence on traditional banking infrastructure by fintechs. To say the least, this isn’t exactly the best selling point for fintechs that promise to be viable alternatives to traditional banks. When kicking off a typical fintech product or service, the traditional bank leverage helps reduce bottlenecks and flattens some market entry barriers. However, in the long haul, dependency on traditional banking infrastructure can be radically equated to despondency on the part of fintechs. This leverage should be a means not an “end”.

Popular arguments for this nagging issue of stiffled settlements include internet quality/broadband penetration (which is currently over 46% according to N.C.C or may be 100% according to President Buhari which rides on Elon Musk’s Starlink’s introduction to Nigeria), technology infrastructure and maybe brain drain (a.k.a tech jappa). Either way, there has to be a lasting solution which would simply require more investments in manpower, infrastructure and possibly localization of some of these technologies to cut down foreign dependencies.

Public Transportation Must Be Cashless To Foster A Cashless Society

The intriuging cash based danfo era as we know it must give way for newer cashless systems. The gains of the likes of Cowry card, Shuttlers in Lagos, etc,  must be applauded. However still, a whole lot can be done to further expand the possibilities our public transportation systems going cashless. Calling a spade a spade, the wins and failings of these trailblazers must never be discounted.

A good attempt to make transportation cashless has the potential to increase the number of sustainably banked Nigerians and this should set a precedent for other essential services and products’ transactions to go cashless. Everybody needs to move from one point to another and this makes transportation pivotal to human existence.The key challenge will be providing cashless cover for last mile transportation and getting governments on the same page on the need for improved financial inclusion.

POS Agency Bankers Must robustly link up with Mobile Banking Providers

Just like several banks are linked via Payment Terminal Service Aggregators like Nigeria’s NIBSS and the recently launched Pan African PAPSS, such must be considered between mobile money agencies, mobile communication providers, POS operators and the big boss CBN. This must be SEC regulated as expected with a robust and all encompassing operational base.

P.O.S agents remain pivotal in the envisaged cashless future. In fact, the POS business is fast becoming the ultimate side hustle for brick and mortar businesses around neighborhoods.The future I forsee is one where widely spread POS agents will serve as primary agents for capturing the unbanked and for confirming the validity or status of financial transactions without people needing to go to banks or leveraging on banking infrastructure (which rely on existing interbank payment terminal service aggregators).

Currently, POS agents mostly help the un-banked with transactions that ride on traditional banking infrastructure and services. I believe they can do a lot more. That said, it’s noteworthy to state that the sequence of POS agents first solving the problem of people (with or without bank accounts in areas far from banks) needing to carry out transactions is very practical and impactful. This is what needs to be built upon.

People Must Be Forced To Embrace Change

This has historically worked, dating back to the CBN’s cashless policy drive in 2012. At some point you can’t just rely on people being willing to change. Mental shifts take time. For instance, it took 2years after availability of touch screen phones for me to switch from using phones with physical qwerty keypads (out of fear of experiencing difficulties typing). If I could go this far with my level of tech literacy, how far are people wiling to go? People transacting or saving their hard earned monies on seemingly invincible technology platforms is a lot scarier for most.The above is why I will suggest tactful and gradual coercion.

Kudos to CBN so far. However fintechs with truly superior and all encompassing solutions have a good shot at accelerating this much needed transition. On that note CBN should be more friendly and accommodating to fintechs. The same applies to other regulators who so badly need to step up their oversight functions and encourage more healthy competition and innovation in the financial sector. Finally, these advances should be firmly in view of better customer satisfaction and improved financial Inclusion.

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In an unusual Nigerian fashion and against the current economic crunch that necessitates having multiple income streams, one must be careful not to be fixated on what works for another. It’s common place to find many Nigerians flocking in the same direction when it comes to exploring side business options. That said, you can still dare to be different.

In this piece, based on practical experiences joggling at least two businesses off and on full-time salaried jobs, I will be sharing useful tips on the ideal path to kicking off your side hustle. Applying these principles will help you coin your best approach based on the peculiarities of your planned business – and that’s if the plan doesn’t change after reading this.

It’s about the Money NOT Passion

If you are lucky you can immediately make some good bucks from an activity you are passionate about, but that’s a rarity. Earning from your passion is by far the most exhilarating money making path. However, the entire concept of side hustle means you have a main gig and most likely without the luxury of time.

The most realistic side hustle is one which you optimize time to get the best results and visible earnings. While I am not discouraging plying the passion route, I must clearly state that true passion or talent needs to be nurtured overtime for value to be drawn. Remember that money is what you get in exchange for value. Even after grooming your skills or talent, you must have sellable products/services and know how to sell to make money.

Passive or Active income?

The core difference between a passive and an active income is how much of your physical presence or effort/time is critical to the success of the business. An example of a passive income is trading in stocks or cryptocurrencies. Both hardly require one’s physical presence or maximum effort. Passive income is almost always about leveraging on the time and effort of others.

On the flipside, regardless of how most billion dollar empires started, growth became a reality when these organizations generated active income for their founders. Unlike passive income, active income requires your presence and effort. Like being a painter, a make up artist, a performer etc. Overtime, active income yields best returns at the expense of time.

In deciding to go passive or active, how much time do you have? Also ensure your side hustle doesn’t conflict with your main job or violate your contract/non-compete.

Invest Low, Learn and Grow

Regardless of the funds at your disposal, it’s best to invest low and start small. The big question is why? The answer is simply the need to understand your business and build resilience.

Businesses are built to succeed and they rightly should. However, not planning on how to address failure is one of the signs of faulty planning. With a 90% startup failure rate, the chances of failing as a new business is frankly more. It only makes sense to minimize losses (owing to failure) by starting with low capital investments and grow steady.

Have a clear ratio to Reinvest, Save and Spend

Ideally, early earnings from side hustle(s) shouldn’t be spent. Expunging spending from the above list will leave reinvesting and saving. I can’t quite give a one-size fits all ratio, but whatever ratio you decide on is subject to the peculiarities of your business. These includes, the proper investment cycles, seasonal effects on demand/supply, actul earnings and your differentiation strategy.

The 80/20 Pareto principle should rightly serve as motivation to invest back into the business. This rides on the fact that you can’t always accurately tell the 20% of all your reinvestment that will yield the favorable 80% outcome.

Pursue a Diversified Side Hustle Portfolio

Simply spread your eggs across several baskets.

The above is inherently a risk mitigation strategy. You increase the chances of making more money and learning more about business cutting across various disciplines. As a matter of fact, a diversified portfolio is a legitimate billionaire trait.

To be successful at this, the hack is leveraging on transferable skills horned from your career journey. A good example was how I kicked off a frame production business after years of building furniture.The entire essence of this is to shrink the learning curve required. This doesn’t guarantee a springboard effect, but it gives you a better standing going up against the competition and obstacles.

Bonus: Be a bamboo!

Before spending a dime, invest in having a solid foundation! Burrowing a leaf from how a typical bamboo tree’s 5-year growth isn’t visibe until it’s 6th year, grow your knowledge and skill depth before kicking off your side hustle.

For every business path you take, you will be going up against people who work full time and depend on the business to feed their families. So don’t expect a warm embrace or a cheer from the competition. The goal is to grab as much market share and grow from there. You may never have all the experience they have, so your best bet is outsmarting them. For you to stand a chance of making this happen, you must first invest in knowledge and growing relevant network.

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Notorious as Danfos may seem, they represent a fading back bone of road transportation in Lagos. The doggedness of these well-engineered but aged Volkswagen Transporter buses is true to their German origin. However, the viability of this transport business model rides on high population growth and heavy reliance on road transportation for mass movement of people and goods in Lagos.

There is a lot to loathe about these buses and their nasty drivers, but according to Nigerian Tribune in 2021, the Lagos state government generated 125billion Naira from these transporters, which is testament to the viability of this business. Having been driven in these buses and on the outside, gotten a few side bumper bumps by these buses, I have somewhat unintentionally understudied their unique business model and uncovered a few unscripted business hacks employed by these road renegades Lagos can’t seem to do without. Below are six of them.

Hack 1: Understand the market

On one occasion in a Danfo bus, a rather chatty driver for no reason began to give insights about the best times to work and his asserted position coincided with the regular peak periods in Lagos; nothing new right? Interestingly, he went futher to state that on an average he makes twice as much working 4hours in the morning or in the evening hours than he makes working 8hours between 10am to 5pm. The reason for this being higher demand and higher pricing during these peak hours.

Now fully armed with this new information, he stopped working during the day and focused on working only during peak periods and late at night. The simple point here is that in any business area, a crisp understanding the market forces, supply, demand and market preferences is very key to succeed in business.

Hack 2: Know your onions and the stakeholders

Probably except on very stringent tax force implementation days, Danfo drivers always seem friendly and in sync with law enforcement agencies. They literally get away with things that private vehicle owners won’t even dare to attempt. Initially I felt it was about their rude brassiness, but overtime I have come to understand that these guys manage and engage their stakeholders off and on the road.

Beyond this, they know traffic rules (and when to break them) and most importantly, they know how to drive (but choose to drive crazy willfully). Lastly, if you have ever witnessed a scuttle involving erring Danfo drivers, the ease at which they fall flat on the floor to beg gives an insight to how deliberate they are about wiggling their way out of trouble (even if it means feigning humility).

That said, in any business you find yourself, don’t assume anything, go beyond finding out the key stakeholders of your business and strike up relationships with them possibly even prior to starting. Be intentional about creating a network of people that align with your business and bear in mind that to keeping these relationships waxing strong is a give and take.

Warning: This isn’t a tacit prompt to indulge in bribery or corruption.

Hack 3: Leverage on O.P.O “other people’s money” to grow and sustain

This happens in two ways for Danfo drivers. Firstly, when they acquire their mobility assets via hire purchase arrangements leveraging on 3rd party capital injection. The second one is taking payment of fares before actual movement or early in transit to buy fuel or diesel for same trip.

Either way, its important in business to uncover legitimate ways to leverage on external cash injection to keep operations smooth and even grow your business. To put it simply, that much needed capital injection must not always come from years or months of saving.

Hack 4: Grow steady and don’t skip growth stages

Skipping growth stages is tantamount to missing out on critical learning experiences that may come right back to bite. Many Danfo drivers are employers and investors in their own right with strings of Danfo buses on their balance sheets, however one unique story common with a handful of them is how they started first as bus conductors.

So don’t be afraid to get your hands dirty learning! For instance, out of pure necessity and more than 4years doing furniture business, I had to go back and learn furniture upholstery which was an apparent step I skipped in becoming a furniture manufacturer.

Hack 5: Attract your target market with smart promotions and advertisements

Winking in the dark is an exercise in futility, also people seeing your wink isn’t always enough to sell per time in a competitive space. So how do crude Danfo drivers get by? They stretch their vocal cords announcing their destinations and fares. When this doesn’t work, they ‘shadow’ passengers by changing vehicle positions to be more visible and court the most attention.

Another trick is a false sense of urgency and fear of the unknown instilled by Danfo drivers or conductors who paint a picture of offering the best time-bound deals. The last trick is charging the first set of passengers a lower fare to keep them seated while they use a fairly loaded bus to promise other customers that they will leave earlier than others buses if they board at a higher fare.

Hack 6: Optimize Business Assets and human capital

A typical Danfo bus works 16-19hours a day, however danfo drivers work typically 6-10hours on a strict shift schedule (meaning you have 2 -3 drivers per Danfo bus). How barely educated individuals have mastered this shift work system makes me wonder why a lot of corporate businesses drag their feet when it comes to optimizing business assets and workforce. Even in the age of remote work post COVID-19, you still have Nigerian businesses adamant about embracing remote work for certain roles. Totally beats me, but i will not digress from the topic at hand I promise!

In conclusion know your business, the people and your assets and be deliberate about creating a system that will ensure maximum profitability via smart optimization of key assets and human capital, but not at the expense of culture and/or larger vision.

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