The Fund Founder Spotlight Interview: Ope Adeoye of OnePipe
Ope Adeoye is the Founder and CEO of OnePipe, a platform that makes it possible for businesses to partner with banks and financial intuitions to distribute or embed banking and related services.
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Nigeria has the largest population in Africa with over 213 million and the majority of these people rely on the informal sector for employment. According to World Economics, the size of Nigeria's informal economy is estimated to be more than 57% of the GDP. Most informal businesses are Micro, Small, and Medium Enterprises (MSMEs), which are considered one of the most powerful engines of economic development, innovation, and employment, not just in Nigeria and Africa, but around the globe. Unfortunately, access to finance is a critical barrier for growth, which is why OnePipe is making it super easy for businesses to embed or launch financial services like accounts, credit, payments and loans with simple APIs and no-code solutions.
OnePipe’s founder and Chief Plumber Ope Adeoye worked for many years at the largest FinTech infrastructure company in Nigeria and decided to start OnePipe to create a way for businesses who serve MSMEs to enrich their offerings with financial services and help their customers grow their businesses. OnePipe is based in Nigeria, they just incorporated in Kenya, and plan to expand into other African countries. OnePipe is part of the new financial services ecosystem in Africa and Ope tells us what’s pumping through the pipe.
Why is OnePipe going to win?
Our focus is heavily on untapped markets that everyone seems to be avoiding due to fragmentation, low education levels, the fact that you may need to lead with credit to build trust, it’s not necessarily a fancy app, and other kinds of problematic scenarios. We see others steering clear of these informal markets and underserved groups and we want to attack them head on. We will win against non-consumption, not against the alternatives to OnePipe. We will win because we have chosen to compete with the market, not with the competition.
What’s been one of the greatest challenges founding OnePipe?
Given that we are heavily invested in the informal market, the level of digital education is one of the biggest challenges. People have accounts, but they don't care about the account or how to use it digitally. But in order to access inventory finance (one of the offerings made possible by OnePipe), they are learning how to operate their accounts through channels like USSD. We also send field agents to train them and if they get confused, they can engage with the contact center via WhatsApp. It’s difficult, but we’re making progress.
How does OnePipe inspire “customer love”?
One major component of the product we have today is enabling traditional distributors in fast-moving consumer goods (FMCG) to offer inventory finance to their customers - usually, small-time retailers. We’ve processed over a billion Naira of such transactions so far and we interviewed quite a number of retailers and they love the product. It saves them having to use their own cash to stock their shop and it helps them free up the cash they have to do other things that can grow their business. The inventory is paid for by our partner lenders. The suppliers that are on the network deliver the goods to the retailers. Then once they've finished selling it, they refund the money, which is building their credit profile as well. The distributors also love this because it helps them retain customers. Win-win-win.
What is OnePipe’s Northstar?
A major goal is that we want everyone to bank with some entity that is not a commercial bank. We would like to get to 1 million people in the informal sector to obtain their financial services from the next node in their supply chain versus an actual commercial bank. No commercial bank can know a thin-file MSME better than the supplier who delivers the goods he sells for his livelihood. If we can get past the 1 million mark, then we treat that as escape velocity and it’s about to take off fully.
You’re on the Board of Trustees of the Open Technology Foundation, helping with the Open Banking Nigeria initiative, tell us more about that.
Open banking is one of the best ways to drive financial inclusion and Open Banking Nigeria is an advocacy group that is leaning on the Central Bank of Nigeria (CBN) to release open banking guidelines, while motivating the banks that they need to comply when it comes out and why it's a good thing. Finally, last year, the CBN released a draft of open banking guidelines for the country, but it hasn’t quite set a deadline. Open banking never works without a deadline and it didn't explicitly define the specifications. So in the next iteration, we're working towards helping to define a set of specifications that could be adopted, and nudging them towards setting a hard deadline. I think this year they will announce both so for those of us with the Open Banking Nigeria Group it’s mostly advocacy to make that happen and sensitize the industry itself.