Paylater Will Become A Digital Bank Soon, But This Is A Move That Might Pay Much Later

In the past three years, Paylater has proven to be one of Nigeria’s top fintech companies, having disbursed loans of over 13 billion naira ($36 million), and its mobile app downloaded by over 1 million users.

It’s exciting stuff really, but it seems as though it’s about to get more exciting as it has plans to become a full service digital bank after securing a $5 million debt facility from Nairobi-based Lendable, technology-enabled funding provider to African consumer and small business lenders.


I’m sure ALAT by Wema comes to mind at this point. Yes, that’s basically what the new Paylater would then look like.

Tech is disrupting and simultaneously revolutionizing virtually every industry, and the art it is creating is beautiful to watch. Many things as we know them have now changed. Paylater belongs to that space where the way people bank has also seen some significant changes.


Tech has enabled the growth of so many mobile money and fintech companies in the past decade especially in Africa. Together with taking away or dominating some services of traditional banks, perhaps the strongest case made by these companies is banking the unbanked.

In Nigeria, there is an estimated 60% of adults without a bank account. Nigeria and six other countries are home to nearly half of the 1.7 billion people without bank accounts, according to the World Bank Global Findex Database report [pdf].


The Huge Number Of Unbanked Appears To Be A Hoax

It’s this huge unbanked population that Paylater seeks to capture and bank. But perhaps that size of the adult population is still unbanked for a significant reason.

ALAT by Wema is a full service digital bank that has been around for a couple of years now, and it’s fair to say even the banked haven’t quite embraced it just yet. Nigeria might not just be ready yet for a fully digital bank.


How many Nigerians especially under the unbanked category will actually have smart phones to carry out/request for all the digital services that they demand? Even for those that have phones, amongst the older generation, the average mum, dad, aunt, or uncle needs help navigating his way around smartphones. I bet they would just prefer to get to the bank and do it the way that has always been clear to them, especially when the younger ones aren’t around to help with this.


What happens to that percentage of the unbanked – which actually makes up the larger part of the unbanked number – which aren’t literate enough to understand and use these services? And to be honest, many have no need of the services offered.

Perhaps Paylater and others seeking to become digital banks should consider the banked as their primary market. The numbers show the market and its possible potential, but apparently not a lot of it is actually there for the taking. So it seems Paylater should be expecting a payoff much later.

Winning is great, sure, but if you are really going to do something in life, the secret is learning how to lose. Nobody goes undefeated all the time. If you can pick up after a crushing defeat, and go on to win again, you are going to be a champion someday.~Wilma RudolphTweet
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