Adedeji Olowe

Uber came to Lagos around 2014 and went straight for the middle-class crowd albeit, that market wasn’t fat enough. They soon found out that any businesses targeting recherché segments in Nigeria never last long. Uber pivoted as the recession gradually wore off as ride-hailing became the go-to for almost every middle-classer.

It didn’t take too long before a pricing war ensured. Boy oh boy, it was bloody! By the time the smoke cleared, it was you and your cousins, that had the last laugh. Go on soun!

Baba Simbiat, the yellow cab driver was the collateral damage.

As expected, ride-hailing became so successful in Lagos that it killed Yellow cabs in high-brow areas. After all, only the well-to-do were taking yellow cabs before, so they all just ditched loyalty for comfort and value. Or why would you prefer to stand in the sun to roast or in the rain to take a public bath when you can get Uber at your doorstep with just an app? With a zero-brain-needed simple app, you request your ride and a (sometimes) decent man or pretty lady (on your lucky day) pulls over in an air-conditioned Toyota Corolla after some 10 – 15 minutes. How easier and fulfilling could commuting be?

To make matters worse for Baba Simbiat, Uber charges 33% less and ensures that you get as comfortable as you could be because the driver knows how much a five-star rating on his feedback dashboard could do for him. Baba Simbiat doesn’t give two flying horse legs. Woe betide you if you are deemed to be dressed indecently, Baba will remind you that your mom failed parenting 101.

Putting that into perspective, you pay N1,000 as the Uber fare for a 9 km distance, but Baba Simbiat will charge your sorry ass nothing less than N1,500 for the same journey in his rickety cab. How cruel! It’s like being asked to choose between Shawarma and Agege bread.

Funnily enough, Uber was not the first guy on the block to try out technology on transportation, but they seem to have done their homework well to have their model scale. The first shot at the use of technology for transportation in Lagos dates back to 2009 when the “Red Cab” was launched. Unfortunately, Citrans Global Limited, operators of the “Red Cab” failed to leverage on its first-mover advantage.

Since Uber’s entrance into the Nigerian market, a flurry of other ride-hailing platforms has emerged, some of which include; Taxify, NaijaTaxi, CabMan, PamDrive, SmartCabs, Holy Cabs, Oga Taxi, GoMyWay, Alakowe, Smart Cab, Jekalo, Ridebliss amongst others.

But all that is history for those that care to know…

But then. traffic in Lagos has become so bad that a baby born at the start of one in the morning is old enough to enter JS 1 before it clears. Consequently, the utility of Uber is trending towards zero on bad days.

We are always in a hurry to get to our destinations and Okada is the next best thing. But then some of us can’t be found dead, alive, or even comatose at the back of an Okada and it’s not because of feeling fly; A trip to Igbobi will convince you. Nevertheless, Gokada and Max.ng have brought the Uber model to Okada business in Lagos.

The Gokada way makes a whole lot of sense if you don’t want to spend the rest of your eternity growing old inside the toxic Lagos traffic. And they are getting cheap enough to make a small dent on the regular Okada business; probably in the same high-brow areas.

Fortunately for the ingenuity of Chinedu Azodoh and Adetayo Bamiduro of Max.ng and Deji Oduntan of Gokada, Akinwunmi Ambode led administration has banned the movement of all 100 cc motorbikes which are mainly driven by the regular “Okada” riders, hence giving room for them to scale with their 200 cc motorbikes. So, asides from getting you quickly to my desired destination, these guys also ensure that you don’t go home with a new set of rashes and infections anytime you use their helmet. That makes you more comfortable to get the next ride and beat traffic with class, wearing a fine green helmet.

Well, the jury is still out if they would be successful but trust me, the demand far outstrips the supply. If this can remain for the next 5 years, then we’ll all have to trust the “Invisible” to do its thing and wipe out all the Okadas from the street of Lagos

Now back to the Yellow Cabs. They have virtually disappeared from Lekki, Ikoyi, Victoria Island, and Ikeja areas, and I bet you, in 5 years, they could be 100% gone. Why? Because they would never be cheap enough to become a replacement for buses and never convenient enough to match Uber and Bolt.

That’s checkmate for Baba, he had better start thinking of how best he could make money off his car. Well, maybe he’ll run to Ibadan and repaint his vehicle, but I heard Taxify is doing stuff there already.

According to EFInA (Enhancing Financial Innovation and Access), Financial Inclusion is “the provision of a broad range of high-quality financial products, such as savings, credit, insurance, payments, and pensions, which are relevant, appropriate and affordable for the entire adult population, especially the low-income segment” (EFInA, n.d., p1). It requires that financial services (bank accounts, credit, insurance, remunerative savings, and payments and remittance systems) be available and accessible to the underbanked and unbanked.

The Global Findex database showed that as of 2017, there were about 1.7 billion unbanked adults worldwide (Asli et al., 2017). The database also revealed that nearly 50% of these people lived in Bangladesh, China, India, Indonesia, Mexico, Nigeria, and Pakistan (Asli, et al., 2017) as shown in figure 1 below.

Figure 1: Adults without a bank account in 2017
Source: Global Findex database
Note: Data not displayed for economies where the share of adults without an account is 5% or less.
Reproduced under the Creative Commons Attribution license

The map shows that Financial Exclusion is mainly confined to the developing world. Figure 2 below shows that 4% of the world’s unbanked adults live in Nigeria. Between 40–64% of adult Nigerians are excluded from any form of financial services, and ownership of Mobile Money accounts in Nigeria stayed at between 0% and 9% between 2014 and 2017 (Global Findex Database, 2017).

Figure 2: Distribution of Adults without a bank account in 2017
Source: Global Findex database
Reproduced under the Creative Commons Attribution license

A recent report dubbed Nigeria “the poverty capital of the world” (Kazim, 2018) and the World Bank’s 2018 atlas of development goals showed that Nigeria had 86.9 million people living in extreme poverty (The World Bank Group, 2018). Compared to the second runner up, the Democratic Republic of Congo at 60.9 million people, that is saying something. One just can’t help wondering if our leaders care even just a tiny bit that Nigeria has overtaken India (with a population seven times that of Nigeria) as the country with the most significant number of people living below $1.90 a day (World Poverty Clock, 2019). Well, that’s a rant for another day.

Figure 3: Top 10 African countries with extreme poverty (June 2018)
Source: The World Bank Group SDG Atlas 2018
Reproduced under the World Bank’s Open Data Initiative

Financial illiteracy has been blamed for the statistics in Nigeria. It is argued that the main reasons for financial exclusion in Nigeria are poverty and illiteracy (Martin, 2008). As of 2015, the adult (15 years and over) literacy rate for Nigeria was 59.6% (Knoema Database, 2015). It is the popular belief that most financially illiterate Nigerians are the uneducated and the under-educated. Illiteracy has been linked, consciously or unconsciously, to financial illiteracy. This conception is even somewhat backed by research and statistics. But, is this really the case? Is it true that the illiterate shy away from financial instruments and services mainly because they are unable to grasp the basic concepts of finance? Is this really the full picture?

Financial literacy can be defined as the ability to identify, acquire and utilize financial information and services independently. It is demonstrated by the ability to display the basic skills needed to function in the present economy. These basic skills include numeracy, problem-solving and general prose literacy (Robson, 2012), as well as the ability to figure out abstract things. The interesting thing is that the very same basic skills are required to get a grasp of mobile smartphone technology as well. In fact, it can be argued that mobile telephone technologies are much more complex than financial technologies. This, however, hasn’t stopped the developing world from taking up mobile technology. Sub-Saharan Africa is the fastest-growing mobile region in the world (Damian, 2018) with over 400 million mobile subscribers and an overall subscriber penetration rate of 44% (GSMA, 2018). About 250 million of these mobile subscribers own a smartphone (Damian, 2018) and this figure is expected to grow to 690 million by 2025 (GSMA, 2018). And believe me, not all those 690 million smartphone owners will be university graduates. Just ask the Bodaboda driver in Uganda or Bàba Làsìsì who sells beef in Sábó market.

Figure 4: Mobile subscription and penetration in Nigeria and Africa
Source: Jumia Mobile Report: Nigeria 2018

The big question now is: if digital inclusion is exploding across the continent, why then isn’t the same true for financial inclusion? When mobile phones first hit the scene in 1983 with the Motorola DynaTAC 800x, they seemed so advanced and brain-wracking, and they came with fat user manuals. The Motorola DynaTAC 800x cost almost $4,000, was about a foot long, and had a battery life of a half hour. IBM’s Simon was probably the world’s first commercially available smartphone. It cost about $1, 099 and was equipped with a calendar, address book, clock, notepad, PDA, email service, fax service, a QWERTY keyboard, and a touchscreen. In the 26 years since Simon’s debut, smartphones have come a long way. They have become more affordable and pretty easy to use. In order to stay competitive, phone makers have had to “dumb down” the previously complex technologies that run these devices by hiding these technologies behind easy to use interfaces. We went from having to tap like a million times just to get to the figure 9 to QWERTY phone pads with emojis. Even my three-year-old niece can pick out the camera and YouTube icons in a heartbeat and knows to swipe to unlock her mum’s phone. Now, Bàba Làsìsì, who didn’t go beyond primary 6 and who can’t speak a lick of English, has WhatsApp on his phone and can torment all his friends and kids with random broadcast messages that threaten doom and damnation if you don’t forward them to 20 people. He didn’t need a degree or the ability to speak Queen’s English to be able to take selfies on his phone or to send a message to Mama Put to let her know that her cuts of meat are ready. The figure below shows that a larger percentage of Nigerians can carry out several functions on a smartphone than are able to perform financial transactions.

Figure 5: Phone user capability in Nigeria in 2017
Source: FII Nigeria 2017 Wave 5 Report

Why have people taken to mobile technology in a way that has seemed impossible with financial services and products? The truth is that people simply developed functional literacy around mobile phones — how to identify numbers, key in airtime tokens, read balances, etc. It helped that the mobile phone developers made the technology accessible and within reach of everyone, educated or not. The user interfaces on phones are very intuitive and make navigating the otherwise overwhelming world of technology pretty straight forward. It is easier for Bàba Làsìsì to recognize the phonebook icon and call button on his phone than for him to wrap his head around the notion of a revolving line of credit.

What then is this telling us about the so-called illiterate Nigerian? Illiteracy doesn’t necessarily mean that people are dumb or have low IQ. Illiteracy is mostly a function of access, or a lack of it, to formal education. Illiteracy cannot take all the blame for financial illiteracy and financial exclusion. In fact, a survey carried out amongst students from a large metropolitan university in South African revealed that 17% of the respondents were financially illiterate, and 68% moderately financially illiterate (Shambare & Rugimbana, 2012). This shows that education does not necessarily imply financial literacy and that even the educated still struggle with some aspects of their finances.

The world’s poor and un(der)educated don’t need to go to school or have a fancy degree to understand banking. The banks need to borrow a leaf out of Apple and Samsung’s book and present financial services and products in such a way that they can be understood using functional literacy. If undergrads, who are technically considered as literate if they could get to that level of education, don’t understand the concepts of compound interest or have any idea what a credit history is, how then is the man on the streets expected to do that? these banking concepts need to be simplified and made as easy to grasp as tapping an icon on a phone screen. If using an App required having to type in some code in C++, smartphones would have died out eons ago.

The simple truth is this: having a bank account should be as simple as using a mobile phone; having insurance should be as simple as an understanding risk; services should be cheap enough to be within the grasps of the poor — the poor are very sensitive to pricing. In my opinion, banking for the poor should be free, and the banks should figure out how to make money off their larger customer base; understanding how your savings are performing should be as easy as saying “Ok Google.”