Rahmon Ojukotola is a Nigerian entrepreneur with years of experience working in the finance industry. He recently moved back to Lagos from England to set up StartCredits, a startup operating in the finance and technology space.
I met up with Rahmon to discuss StartCredits, and what he hopes to achieve with it.
Hello Rahmon. Can you briefly introduce yourself to us?
My name is Rahmon Ojukotola. I’m the founder and director of StartCredits. StartCredits is a financial technology organization, which aims to improve and increase financial inclusion in Africa by utilizing innovative technologies. More specifically, we do that by providing a free loan search engine that enables users to find the best interest rates, and by building credit risk models using big data analytics. Our credit risk models help banks and micro-finance institutions to better assess risk, and hopefully disperse more loans to qualified individuals in Africa.
So back to me now, I’m a chartered accountant and financial analyst by training. I schooled at Kings College, Lagos and then I studied abroad in the UK. I’ve got a Masters in Finance from the London School of Economics, and I worked in investment banking and central banking for a number of years. I decided to move back to Lagos about eight months ago because there were opportunities and issues that needed tackling, and I thought I had the right skill set to do so. So I gave up a well paying job and decided to come back to try and build something.
How big is the company at the moment in terms of work force?
We’re about four at the moment and expanding. That number has been higher in the past, so we’re still trying to find the right mix and combination of skill sets. We’re currently recruiting for a data science analyst, so if any one has the relevant skill set, they can go on our website and apply for the role. We have a small team in London, and we’re building the team in Lagos because we’re going to need more people to grow the business. The business is growing exponentially so the more qualified people there are, the better.
I’m sure you like most entrepreneurs set out to solve a problem. What exactly was the problem you set out to solve?
The principal problem is access to credit. As we all know, it’s very difficult to get a loan. You have an idea, and the bank may request that you pledge assets that you may not have as collateral. That’s a big challenge for anyone trying to start a business, and even the interest rates are just too high. The rates charged by registered money lenders for unsecured loans in Nigeria are potentially up to 42% per annum. The venture will need to be generating substantial cash flows early on to be able to meet repayments. Our products will help to provide transparency and increase competition in the market to reduce interest rates for qualified borrowers.
Did the idea of StartCredits come in a Eureka! moment, maybe based on an experience you had yourself?
I could give you a sweet fairytale answer like “Yeah, so I was just walking down the street one day…” but it did not happen like that. I’m a very meticulous person, so I just did a lot of research. I went through a lot of financial journals, research papers and online forums, and there was a pattern in terms of what people were complaining about.
I go to the local markets once in a while as well to hear what people are saying, and that’s the best way to know. It was based on that that the B2C (business to consumer) side of things developed, by hearing their complaints. They don’t really know the plethora of options that are out there, there’s no transparency and that’s what the B2C side hopes to achieve by comparing loans and providing loan reviews. So no it wasn’t in any one moment like that, it was just loads of hard graft and research.
And what kind of feedback are you getting from your clients so far?
There are two elements of the business: the B2B side (business to business), and the B2C side (business to consumer). The B2C side is highly automated and everything is dealt with online.
The clients on the B2B side are like the micro-finance institutions for example, and there are a lot of opportunities. Some call them problems, but I call them opportunities given the current lack of time or resources given to discussions about risk and that side of things. So some of the customers are really happy about it, while others need further help to be able to benefit from our product. They need to be more advanced in terms of their IT setups before they can fully utilize our services. Some of the banks need to first develop their computer side of things and have their soft records before we can help. Those who have the sophistication to benefit from our products are seeing the benefits.
Being as objective as possible in your analysis, how far have you come and how far do you have to go in achieving what you set out to?
The company has been alive for about eight months, but we haven’t been trading for the best part. We’ve been setting up the legal framework and infrastructure, so I’ll say we’ve rebounded and been fully active since February. Our user base is growing faster than I expected – they are saving money on interest rates and improving their financial literacy. Still, we have a long way to go and more people to help. Greater access to credit fosters sustainable growth in the economy, and we hope to be a catalyst in Nigeria’s growth recovery and prosperity.
That’s good to hear. So you operate in the finance and technology industries – Fintech if I may – what are the challenges that come with that, especially here in Nigeria?
Well in general, it’s pretty much to do with the adoption of the technology. Technology in general is all about finding the best ways to do things. In certain industries it’s easier to have the incumbents accept that, whereas in finance people have become entrenched in how they do things. It’s highly profitable, so there’s more resistance to changing a winning formula. Fintech is highly resistant to change, but people are slowly starting to adapt as you’re seeing with Blockchain technology, which I think has the potential to revolutionize the finance industry. The banks are slowly coming around, but are still highly resistant to change given the nature of the business.
In Nigeria, it’s mostly trying to get the people to use the technology. People are highly suspicious of new technologies, so it’s a bit of a challenge.
You’re right about Nigerians being suspicious of new technologies. Hopefully, we come around and reap all its benefits. Just to round things up, do you have any advice or lessons to share for anyone looking to start a business or struggling with one?
Maybe they can come and request my consulting services if they need to (Laughs).
Yeah, it depends on the kind of business first of all. If you’re doing a social enterprise, then profitability isn’t the key thing. But for a regular business, you have to make sure that everything you’re doing is simultaneously helping you achieve your goals and make profits as well. Don’t leverage too much and try not to grow too fast. Also, make sure that what you’re doing is what people want. The whole point of doing business is addressing the needs of society. So make sure you do your extensive research, go out and meet people to listen to what they’re saying, and make sure you have the right skill set to execute your plan. Once all of that is in place, you’re good to go.
I want to pick your brain one last time. I’ve spoken to a lot of entrepreneurs, and while some say that you have to be persistent and keep going when you face challenges, others say you have to know when to give up. What’s your opinion on that?
My thing is that you shouldn’t go into any venture that you don’t have the right skill set for. If that’s the case, then get someone with that skill set to work with. You know what your strengths and competitive advantage are, so work with that and partner with someone that has a relevant and complementary skill set. So in terms of saying that you should know when to give up, that should’ve been from day one if you don’t have the right skills for the job. If you do and you see that the opportunity exists, then you should persevere and not give up, otherwise you’re only letting yourself down.
Thanks a lot for your insight Rahmon. It’s been great talking to you.
It’s been a pleasure, and like I said, anyone who has the relevant skill set can head to our website and apply for the data science analyst role. Anyone that wants to know more about loans can also head to our website, startcredits.com.ng, to learn more about loans, see what the best available rates are and learn more about loan providers. That’s what we’re there for.