The last two years have seen losses for Kuda MFB, a neobank with a Nigerian microfinance bank license.
According to the company’s financial report, reviewed by TechCabal, it lost $6,092,554,866 ($14,214,681) by the conclusion of the 2021 fiscal year, an increase of 602% over the $2,025,295 loss it suffered in 2020.
The financial report indicated that the company’s revenue increased by 4,315% from ₦72,649,000 in 2020 to ₦3,207,177,570 in 2021. However, after every expense had been deducted, the company closed the year at a net loss, with high credit loss/impairment charge and operating expenses contributing the most to the loss.
TechCabal reached out to Kuda for comment, but the neobank hasn’t responded at the time of publication.
Bad loans delivered the hardest stroke
The report said that “the nonperforming loan (NPL) recorded by the firm is too high for the comfort calculated at 69%”, and this, as expected, drove the neobank to a high impairment rate—valued at ₦2,258,698,669. For context, loans are considered impaired when, based on current information and events, it is probable that the creditor will be unable to collect all interest and principal payments due according to the contractual terms of the loan agreement.
Specifically, in the analysis part of the report, the impairment is said to have eroded 96% of the interest income made from the loan offer. What this means, in general, is that Kuda extended a lot of bad credit through its overdraft product and that ate into its balance sheet.
Kuda, a few days before it announced its $25 million Series A round in March 2021, started piloting its overdraft product with over 2,500 users who “have been using their Kuda accounts actively”. By June, it claimed that the product had hit 50,000 users weekly. The company once said in a statement that at the end of the second quarter of 2021, they had disbursed $20 million worth of credit to over 200,000 qualified users, with a 30-day repayment period.
In fact, the company’s co-founder and CEO Babs Ogundeyi once claimed that the neobank has seen “minimal” default because of its approach. “We use all the data we have for a customer and allocate the overdraft proportion based on the customer’s activities, aiming for it not to be a burden,” Ogundeyi said in that statement.
The overdraft feature was received with mixed feelings. According to a risk analyst who spoke to TechCabal anonymously, Kuda needs to revamp and build more risk assessment into its overdraft offering or scrap it entirely. “But,” he added, “scrapping the offering would be unwise as lending if done right, has the potential of pushing the company’s bottom line to a high net positive.”.
It’s worth mentioning that traditional banks generate a big part of their revenue from lending. In fact, while Kuda’s NPL ratio ended the year at 69%, the average ratio in the traditional banking industry dropped to 4.8% in the same period. Traditional banks mostly extend credit to a few low-risk businesses with substantial collateral that already mitigates defaulting, while Kuda only works with users’ activities on its app. Still, the difference between the two ratios is disturbing.
The aforementioned financial report analysis similarly stated that “the firm’s risk appetite, criteria, and strategy relating to retail and business loan calls for immediate restructuring.”
Introduction to Network Market Research and Competitive Analysis
Market research and competitive analysis are crucial components of effective network management. By gathering and analyzing data about customer needs, market trends, and competitor activities, organizations can make informed decisions that drive business growth and success.
The Importance of Network Market Research and Competitive Analysis
Customer Insights: Market research helps organizations to gain a deeper understanding of customer needs, behaviors, and preferences. This information is critical for developing products, services, and marketing strategies that resonate with customers and drive business growth.
Market Trends: Understanding market trends is essential for staying ahead of the competition. Network market research provides organizations with valuable insights into current and future market trends, enabling them to make informed decisions about product development, pricing, and marketing.
Competitor Analysis: By analyzing competitor activities, organizations can gain a better understanding of the competitive landscape, identify potential threats, and develop strategies to stay ahead of the competition.
Key Components of Network Market Research and Competitive Analysis
Customer Surveys and Focus Groups: Gathering customer feedback through surveys and focus groups is a critical component of market research. This information helps organizations to understand customer needs and preferences, and make informed decisions about product development and marketing.
Market Segmentation: Market segmentation is the process of dividing a market into smaller groups of consumers with similar needs or characteristics. This information is critical for developing targeted marketing strategies and product offerings.
Competitive Intelligence: Competitive intelligence involves gathering and analyzing information about competitor activities, including product offerings, pricing, and marketing strategies. This information helps organizations to understand the competitive landscape and make informed decisions about product development, pricing, and marketing.
The Benefits of Network Market Research and Competitive Analysis
Improved Product Development: By understanding customer needs and preferences, organizations can develop products and services that better meet the needs of their target market.
Increased Market Share: Effective network market research and competitive analysis helps organizations to gain a deeper understanding of market trends and stay ahead of the competition, enabling them to capture a larger share of the market.
Increased Profitability: By making informed decisions about product development, pricing, and marketing, organizations can improve profitability and drive business growth.
Example: Sarah, a market research analyst for a large tech company, she is responsible for conducting market research and competitive analysis for the company. Through her efforts, Sarah has been able to gather valuable insights into customer needs and preferences, as well as market trends and competitor activities. This information has been critical for the company’s product development and marketing strategies, leading to increased market share and profitability.
Best Practices for Network Market Research and Competitive Analysis
Set Clear Objectives: Before conducting market research or competitive analysis, it’s important to have clear objectives in mind. This helps to ensure that the information gathered is relevant and useful for decision-making.
Use Multiple Data Sources: Gathering data from a variety of sources can provide a more comprehensive picture of the market and help to validate findings. This can include sources such as customer surveys, focus groups, industry reports, and competitor websites.
Use a Mixed Methodology: Combining qualitative and quantitative research methods can provide a more in-depth understanding of customer needs, behaviors, and preferences. For example, using a combination of customer surveys and focus groups can provide both numerical data and anecdotal evidence.
Keep Up-to-Date: Market trends and competitor activities are constantly evolving, so it’s important to regularly conduct market research and competitive analysis to stay informed. This can be done on an annual or bi-annual basis, depending on the organization’s needs.
Collaborate with Other Teams: Market research and competitive analysis can benefit from collaboration with other teams within the organization, such as product development, sales, and marketing. This can help to ensure that the information gathered is relevant and useful for decision-making across the organization.
Network Market Research and Competitive Analysis Tools
Survey Tools: Online survey tools, such as SurveyMonkey and Google Forms, can be used to gather customer feedback through surveys and focus groups. These tools are user-friendly and allow organizations to gather data quickly and efficiently.
Market Intelligence Platforms: Market intelligence platforms, such as CB Insights and Owler, provide organizations with access to industry reports, competitor data, and market trends. These platforms are a valuable resource for organizations looking to gain a deeper understanding of the market.
Data Analytics Tools: Data analytics tools, such as Google Analytics and Tableau, can be used to analyze customer data, market trends, and competitor activities. These tools provide organizations with valuable insights into customer behavior and market trends, enabling them to make informed decisions about product development and marketing.
Example: John, a market research manager at a large retail company, is utilizing a combination of survey tools, market intelligence platforms, and data analytics tools to gather and analyze data about customer needs, market trends, and competitor activities. With this information, John is able to make informed decisions about product development, pricing, and marketing, leading to increased market share and profitability for the company.
Network market research and competitive analysis are essential components of effective network management. By using the right tools and following best practices, organizations can gather valuable insights into customer needs, market trends, and competitor activities, enabling them to make informed decisions that drive business growth and success.
Stay ahead of the competition and invest in network market research and competitive analysis today.
By gathering and analyzing data about customer needs, market trends, and competitor activities, organizations can make informed decisions that drive business growth and success. So start building your network and gather valuable insights today!
The Power of Network Entrepreneurship and Innovation
Have you ever heard of the saying, “It’s not what you know, but who you know”? This statement holds true in many aspects of life, including business. Network entrepreneurship and innovation are powerful tools that can help young African entrepreneurs grow their businesses and succeed in today’s competitive marketplace.
What is Network Entrepreneurship?
Network entrepreneurship is the process of building relationships and networks within a community to create business opportunities and drive innovation. This type of entrepreneurship involves leveraging the power of connections to bring together people, resources, and ideas to create something new and valuable.
The Benefits of Network Entrepreneurship
Access to Resources and Support One of the biggest benefits of network entrepreneurship is the access to resources and support that entrepreneurs can gain from their connections. Whether it’s financial support, mentorship, or introductions to potential customers, having a strong network can provide entrepreneurs with the resources they need to grow their businesses.
Collaboration and Innovation Another benefit of network entrepreneurship is the ability to collaborate and innovate with others. By bringing together people from different backgrounds and industries, entrepreneurs can generate new ideas and find creative solutions to challenges.
Increased Visibility and Opportunities Finally, network entrepreneurship can also increase visibility and create new opportunities for entrepreneurs. Having a strong network can help entrepreneurs reach new customers, secure new partnerships, and gain exposure to new markets.
The Growth of the African Startup Ecosystem
In recent years, the African startup ecosystem has experienced significant growth, with more and more young entrepreneurs turning to network entrepreneurship to drive innovation and growth. With the support of organizations like the African Development Bank and venture capital firms like CRE Venture Capital, African entrepreneurs are building networks and collaborating to create new and exciting business opportunities.
One example of a successful African startup that leveraged network entrepreneurship is Jumia, an online marketplace that allows African consumers to buy and sell products online. Jumia was founded in 2012 and has since grown to become one of the largest e-commerce platforms in Africa, with operations in over 14 countries.
The success of Jumia is a testament to the power of network entrepreneurship in Africa. By leveraging its network of customers, suppliers, and investors, Jumia has been able to grow and innovate, becoming a leading player in the African e-commerce market.
What is Innovation?
Innovation refers to the process of creating something new and valuable. In the context of entrepreneurship, innovation is often associated with the development of new products, services, or business models.
Why is Innovation Important for Entrepreneurs?
Competitive Advantage Innovation is critical for entrepreneurs because it provides a competitive advantage in the marketplace. By developing new and unique products or services, entrepreneurs can differentiate themselves from their competitors and stand out in the market.
Increased Revenue Innovation can also lead to increased revenue for entrepreneurs. By introducing new and improved products, entrepreneurs can tap into new markets and reach new customers, driving sales and growth.
Improved Customer Experience Finally, innovation can also improve the customer experience. By continually improving their products and services, entrepreneurs can meet the changing needs and preferences of their customers, resulting in increased customer loyalty and satisfaction.
The Rise of Fintech in Africa
One example of innovation in Africa is the rise of fintech, or financial technology. With the help of innovative technology, fintech companies are providing African consumers with access to financial services that were previously unavailable, such as mobile banking, online lending, and digital payments.
One of the most successful fintech companies in Africa is M-Pesa, a mobile money and financial services platform founded in Kenya in 2007. M-Pesa revolutionized financial services in Kenya by providing millions of people with access to financial services through their mobile phones. The company’s success has since inspired similar services in other African countries and around the world.
M-Pesa’s success is a clear example of how innovation can drive growth and improve access to financial services for people in Africa. The company’s innovative technology has provided millions of people with access to financial services that were previously unavailable, helping to increase financial inclusion and drive economic growth in Kenya and beyond.
How to Leverage Network Entrepreneurship and Innovation for Success
Build Strong Relationships To be successful in network entrepreneurship, it’s important to build strong relationships with others in your community. This means reaching out to potential partners, investors, and customers and actively working to build and maintain these relationships.
Foster a Culture of Innovation Innovation is key to success in entrepreneurship, and entrepreneurs need to foster a culture of innovation within their businesses. This means encouraging employees to come up with new ideas, testing new products and services, and continually improving upon existing offerings.
Stay Up-to-Date on Industry Trends Finally, it’s important for entrepreneurs to stay up-to-date on industry trends and emerging technologies. By staying informed about the latest developments in their industries, entrepreneurs can identify new opportunities for innovation and stay ahead of the competition.
In conclusion, network entrepreneurship and innovation are powerful tools for young African entrepreneurs looking to grow their businesses and succeed in today’s competitive marketplace. By building strong relationships, fostering a culture of innovation, and staying informed about industry trends, entrepreneurs can leverage these tools to drive growth and create new and exciting business opportunities.
We hope this blog post has provided valuable insights and inspiration for young African entrepreneurs. We believe that with the right approach and the right mindset, network entrepreneurship and innovation can help drive economic growth and improve the lives of people in Africa and around the world.
Usain Bolt Gets Duped Of $12 Million Savings
Usain Bolt, the Olympic sprinting champion from Jamaica, lost millions of dollars in his account with Kingston-based Stocks and Securities Ltd.
The legal team for the racing star stated they are prepared to launch a lawsuit if doing so would allow them to recoup the $12 million that inexplicably vanished from Bolt’s account.
According to a statement made by Bolt’s attorneys, there is reportedly just $12,000 still in Usain Bolt’s account.
“The account was part of Bolt’s retirement and lifetime savings,” his lawyer, Linton P. Gordon, told Fortune magazine over the phone. It’s distressing news for anyone, and certainly in the case of Mr Bolt, who established this account as part of his private pension,” Gordon said on Wednesday.
“We will be going to court with the matter” if the company does not return the funds, Gordon said. It is a grave disappointment, and we are hoping that the matter will be resolved in a way that Mr Bolt will recover his money and be able to live in peace.”
The business’ response was: Stocks & Securities Ltd. stated in a statement on January 12 that it had informed law authorities of the fraudulent activities by a former employee.
It said that it has tightened standards and taken steps to safeguard consumers’ assets.
The “alleged fraudulent operations at SSL that are reported to have affected the accounts of Mr. Usain Bolt and other persons” are being investigated, according to a second statement made on Monday by the Jamaica Constabulary Force.
The Jamaican government participates: Nigel Clarke, the finance minister for Jamaica, asserted SSL had perpetrated “alarming and vile fraud” on Tuesday night and vowed to “bring all perpetrators to account.”
According to the Associated Press, Mr. Bolt’s account with the business was established as a pension for both of his parents as well as the eight-time Olympic gold medalist sprinter.
After dominating the sprinting world for a decade, reviving a sport ravaged by drug scandals, and becoming as well-known as Muhammad Ali, Bolt announced his retirement in 2017.
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