After Babatunde Akin-Moses graduated from Bowen University in 2010, he jumped right into corporate Nigeria. First, he worked briefly with Shell Nigeria as a Budget Analyst, before moving to KPMG Nigeria where he worked for more than two years as an Experienced Tax Analyst. From there, he went on to work at PwC Nigeria, occupying different high-profile positions. It was after five years of working at PwC that he left to establish his fintech startup, Sycamore.
In this exclusive interview with Business Elites Africa, he tells us more about Sycamore, what they do, and their plans for the new year after a challenging 2020. Enjoy the read.
BEA: Nice to meet you Mr Moses. Do tell us a little bit about yourself.
BAM: My name is Babatunde Akin-Moses and I am the Chief Executive Officer of Sycamore. Sycamore is a peer2peer lending platform that gives loans to individuals. We also give loans to a lot of small and medium scale businesses and this is a little bit different from what most lending institutions are doing which is to basically focus on people in paid-employment.
I studied Economics at Bowen University at Iwo. And prior to now, I started my career with KPMG and from there I moved to PwC before I resigned to come here after business school where I picked up an MBA.
BEA: How did you come up with the idea for Sycamore? What was the problem you found that you felt like it needed a solution?
BAM: So, it happened organically. It wasn’t like one particular light bulb moment, right? I’ve always been interested in credit right from the start. Well, maybe it was during my first year at KPMG when I tried to get a loan and the process was quite interesting in terms of having to fill a paper form and all of that. So, watching the lending process finally progress from analogue to digital has been quite interesting.
That said, where the idea for Sycamore really came about was while I was at the Lagos Business School where I did my MBA. My co-founders and I were looking at this case of how many SMEs had access to loans in Nigeria and what we saw was staggering. At the time, which was in 2017, all the SMEs in Nigeria only got 0.1% of all the loans that were given out in the country. Everything else was going to oil and gas, manufacturing, and other big companies.
We looked at the number of SMEs in Nigeria (which is estimated at about 17 to 35 million, depending on who you ask), and we realized that’s a big market that needs to be serviced. From there, we just started working on the concept.
BEA: Between 2017 and now, the percentage of loans that go to SMEs has not really improved. This means that there’s still a huge gap that needs to be filled. What exactly is stopping this gap from being filled and what do you think needs to be done in order to fill it?
BAM: There are a number of reasons and some of them are structural. The way our financial system is set up right now, the main lenders are the commercial banks and they are very risk-averse. So, if you need a loan, you must bring a landed property as collateral. This is unlike what obtains elsewhere. Take for instance, if you are in other countries, once you have a job, you can easily get a mortgage. But here in Nigeria, even if you are working, you need to be working for an upstream oil and gas firm or basically earning a lot of money before you can access a significant credit facility without having to present a landed property as collateral. You can see how that’s a major problem in a country where there are 100 million poor people.
Also, the Nigerian banking system is very formal in nature. That’s why borrowers are required to fill many forms for instance. You also have to understand the terms and conditions. And not a lot of these SMEs possess the required knowledge to access these loans. That’s why when you look at some of these credit facilities that are supposed to be for small businesses coming from the Development Bank of Nigeria, the CBN, and the BoI, some SMEs do not end up getting them because of requirements such as business plan, financial statement and all that stuff. Now, I’m not saying that asking these SMEs to present their business plans and financial statement is wrong. No. Just pointing out that there is often a knowledge and educational gap which a lot of SMEs encounter which prevent them from accessing the facility that they need. This gap can be filled by the banks moving a lot closer to the SMEs and also the owners of the SMEs getting the right skills needed to access these credit facilities.
Also, the land ownership system in Nigeria needs to be made easier so that people can own landed properties in a much easier way than it is today.
BEA: One of the things that make fintechs very attractive to borrowers is the fact that their loan conditions are not as stringent as the banks’. But I’ve always wondered: do you guys just give out loans without any collateral at all? Do you have any security measures?
BAM: Yes, we actually do, although it’s a bit more relaxed like you said. Let me just break it down: because we are trying to make things easier and a lot faster, the primary risk assessment process goes through some sort of proprietary underwriting where, you know, we try our best to understand the character of the person borrowing this money. And that gives us an insight into such persons’ behavior. We do this by getting different data points and interpreting them just to see whether or not such a person is likely to pay back…
EDITOR’S NOTE: Read the rest of the interview on page 60 of our latest magazine edition: 25 Entrepreneurs and Brands to Watch in 2021.