Today, we’re talking about the Central Bank of Nigeria’s (CBN) most recent redesign of the Naira and how it affects the nation’s digital start-ups.
In this interview with Techuncode, the Co-founder and CEO of Flux Tech Africa, Aigbe Timothy, explains how the cashless policy and new Naira redesign by the CBN will benefit Nigerian digital start-ups.
Being one of the leading Enterprise Solution Companies in Africa, with a strong talented team that provides an extensive range of solutions and services for businesses, organizations, governments and institutions in Africa, Flux Tech Africa
specializes in the development of complex software systems/applications and payment solutions designed for SMEs, Universities among others.
Also, note that Mr Timothy is a finance specialist who leads a team that has built a reputation for innovation and delivering excellence in development and design.
Tim, as he is fondly called, is an Entrepreneurial and driven Chief Executive, with years of leading industry expertise in executing numerous projects in domestic and international marketplaces and he speaks on How Nigeria’s Digital Start-ups Will Benefit from the CBN Naira Redesign and Cashless Policy.
Timothy: I appreciate you having me. Wonderful to be here.
Can you describe the major motivation behind the CBN’s cashless strategy and redesign of the Naira?
No doubt. The CBN’s redesign of the Naira is primarily intended to increase currency security and decrease fraud. by adding more security features.
On the other side, the cashless policy seeks to lessen the usage of actual cash in transactions and encourage a move toward a cashless society.
How can Nigeria’s digital start-ups benefit from this makeover and cashless policy?
Well, the Naira makeover will increase the currency’s stability and dependability, which is crucial for the expansion of digital start-ups.
On the other hand, the cashless policy would give digital start-ups a safer and more effective way to conduct business.
Digital start-ups will be able to access new sources of financing through online investment platforms and reach a larger client base as the use of digital payments increases by eliminating the need for physical cash.
Can you give an example of a digital start-up that has already benefited from the cashless policy?
It’s true that a fintech platform in Lagos aids in the digital payment collection of bus drivers.
This business is offering a crucial service to a sizable market by capitalizing on the limited supply of the new Naira note and the movement toward a cashless society.
This is only one illustration of how the cashless policy is giving digital start-ups new commercial options.
What a wonderful illustration. How can the cashless policy support financial inclusion for emerging online businesses?
By enabling digital start-ups that offer financial services, like mobile banking and digital wallets, to connect with customers who were previously unbanked, the cashless policy would encourage financial inclusion.
Digital start-ups, particularly those in the financial industry, have a huge opportunity as a result of this shift toward a cashless society.
How will the CBN’s efforts affect the effectiveness and transparency of financial transactions for start-ups in the digital economy?
The CBN’s decisions will have a big impact on how effectively and transparently digital startups can trade money.
Digital start-ups will be better able to monitor costs and earnings by analyzing their finances in real time, which will make it simpler for them to make strategic decisions regarding their operations.
As a result of having a better grasp of their financial status, will also help them to build stronger relationships with their suppliers and clients.
How would you summarize the effects of the CBN’s cashless policy and redesign of the Naira on Nigeria’s digital start-ups?
The CBN’s redesign of the Naira and cashless policy will have a disproportionately beneficial effect on Nigeria’s digital start-ups.
These steps will give digital start-ups access to new finance sources, a more secure and effective way to conduct business, as well as chances for financial inclusion.
What You Need To Know:
Recent plans to boost the use of cashless transactions and redesign the current naira note were unveiled by the Central Bank of Nigeria (CBN).
This action aims to advance a safe and effective monetary system.
The country’s digital start-ups would be significantly impacted by the new policy and the limited supply of the new naira note, which will have an effect on their operations and the growth of the industry.
Using fintech platforms is one example of how digital start-ups in Nigeria are adjusting to this new climate.
Bus drivers may now collect payment from customers using digital payment methods instead of cash thanks to a Lagos-based fintech platform.
This gives passengers a simple and safe way to pay for their travel as well as lowering the danger of theft and robbery for bus drivers.
Since the CBN’s new policy went into effect, the usage of the fintech platform has significantly increased as more people look for alternatives to conventional cash transactions. This is proof that digital start-ups have a chance to succeed in Nigeria’s quickly changing financial scene.
Here are some Benefits for digital start-ups include:
Access to a larger client base:
As more individuals use digital payment methods, the move toward cashless transactions will provide digital start-ups access to a broader customer base. The businesses will earn more money as a result of this.
Using digital payment options will make transactions more effective. Digital start-ups will be able to conduct transactions more quickly, cutting down on the amount of time it takes to get paid and improving overall productivity.
Compared to traditional cash transactions, digital payment systems are typically thought to be more secure. This is crucial in a nation like Nigeria where robberies and theft are frequent occurrences. Digital start-ups can provide their consumers with a more easy and secure way to pay for their services by utilizing digital payment options.
Digital start-up disadvantages are also inevitable and here are some
As cashless transactions become more common, there will be more competition in the digital payment industry. For market share, digital startups will need to compete with established businesses and conventional institutions.
The government will probably tighten regulations as the usage of digital payments increases.
Digital start-ups may find it more challenging to conduct business due to the potential requirement to adhere to new laws and norms.
Finally, the CBN’s new policy and the limited supply of the new naira note will have a big impact on how Nigerian digital start-ups operate.
While it will boost productivity and give access to a larger client base, it will also raise competition and necessitate more regulation and security measures.
To compete in the digital payment market, start-ups will need to be creative and flexible enough to adjust to the shifting financial landscape.
The Lagos-based financial platform serves as an example of how digital start-ups may succeed in this new environment.
By Article by Timothy, CEO FTA