He's Banking the Unbanked in Nigeria and Beyond - OZY | A Modern Media Company

He's Banking the Unbanked in Nigeria and Beyond

He's Banking the Unbanked in Nigeria and Beyond

By Ashley Okwuosa


Because his company is reaching 6 million people … and counting.

By Ashley Okwuosa

“I knew that whatever I wanted to do had to pass the big idea test.” For Tayo Oviosu, 39, that big idea was Paga, now the largest distribution network for financial services in Nigeria, reaching more than 6 million people.

For Oviosu, the premise behind his company is simple: “We’re not trying to replace the bank; our goal is to help make it easier for people to get paid. We are building a payments and digital bank, and our vision is Pan-African, but Nigeria is the first point. We want to bank the unbanked in Nigeria.”

But a decade ago, when he returned home from the U.S., he had a different plan. With experience working at Cisco Systems and a degree from Stanford Business School, he would clock five years at a private equity firm, launch a business and then move into the venture capital industry. The steps were laid out — until Oviosu quit his private equity job six months in. “I had always said the day I consistently stop enjoying my job is the day I quit,” he says.

Pen and paper in hand, Oviosu spent weekends making lists of potential businesses he could start on his own. And his big idea? Paga, which he started in 2009 with money he’d saved from more than 10 years in the private sector.

Tayo Oviosu

Tayo Oviosu (right) with Paga team members.

Source Courtesy of Paga

According to a report by Enhancing Financial Innovation and Access, a development organization that promotes financial inclusion in Nigeria, 41.6 percent of Nigerian adults are financially excluded, or “unbanked,” as Oviosu calls them. That figure translates to more than 40 million Nigerian adults who lack access to basic financial services like bank accounts and debit cards.

“How can a country truly reach its potential if you don’t provide financial services to the mass market?” Oviosu asks. We are sitting in his third-floor office in Yaba, Lagos, the mega city’s expanding tech hub and a hot spot for young Nigerian entrepreneurs.

Paga has had quite an impact on the industry, especially in bringing financial inclusion to the rural masses.

Muyiwa Matuluko, editor-in-chief of TechPoint

Despite the country’s growing interest in mobile banking technology, its citizens continue to rely heavily on cash payments, and Oviosu’s platform incorporates both. Paga allows users to send and receive money, pay bills and shop online by creating an account through their cellphones or computers.

But Oviosu isn’t content to stop there. Determined to reach the unbanked and provide financial inclusion for everyone, Paga has a network of more than 11,000 “agents” all over Nigeria — what Oviosu sees as “bank branches of the future.” Ranging from pharmacies to mom-and-pop shops and grocery stores, they act as payment facilitators by allowing anyone, with or without a bank account, to send money to loved ones or make other financial transactions. 

Some Paga payment agents go further by helping with loans or securing health insurance. Using Paga for transactions like withdrawing and sending cash is free, but for the services that carry a charge, it comes to 1 percent of the transaction cost plus a base fee of 20 to 70 naira (between 5 and 18 cents). With traditional banks charging an average of 70 to 300 naira for everything from transfers to maintenance fees, Paga’s cost structure is manageable for all and explains why the company has seen such growth since its launch.


“Paga has had quite an impact on the industry, especially in bringing financial inclusion to the rural masses,” notes Muyiwa Matuluko, editor-in-chief of TechPoint, a Nigerian publishing platform focused on emerging tech across industries. “Whoever is able to educate and acquire more of the people at the bottom of the pyramid will most likely dictate the pace of future innovation.”

Tayo Oviosu

Tayo Oviosu, founder and CEO of Paga.

Source Courtesy of Paga

Eight years in, Paga has processed more than 31 million transactions, totaling some 412 billion naira ($1.3 billion). Ample proof of a big idea — and one that also passed the investors’ test. Early on, Paga secured funding from Jim O’Neill, former chairman of Goldman Sachs Asset Management, and venture capitalist Tim Draper. And in 2015, Paga raised another $13 million from investment heavyweights including Acumen Fund, Capricorn Investment Group, Adlevo, Omidyar Network and Goodwell West Africa. The infusion fed Paga’s expansion, going from what Oviosu calls a “lean” team to more than 200 employees operating in Nigeria’s major cities.

The expansion seems all the more surprising considering the startup had to survive two years of inactivity while Nigeria’s financial regulatory board, the Central Bank of Nigeria, delayed its operating license. “It’s Nigeria,” Oviosu says, laughing when I ask the reason for the delay. But the team stayed focused despite the bureaucratic hoops. “We were still working; we were building and fine-tuning the product,” he says. Oviosu, a bespectacled man with a toothy laugh, speaks in a slow cadence, but his intensity is palpable. When not working for Paga, he is a major investor in other Nigerian startups, including ChopUp, a mobile gaming company, and he’s become an avid runner (a habit he picked up from his wife). 

Tayo Oviosu

Oviosu speaking in Washington, D.C., at meetings of the World Bank Group and the International Monetary Fund in April 2017.

Source Courtesy of Paga

“Tayo just goes for it,” says Jay Alabraba, Paga’s co-founder and a fellow Stanford Business School graduate. Alabraba compares him to a character in an old Western shootout: comfortable under pressure with an uncanny ability to react quickly in situations that would unnerve others.

As I leave Oviosu’s office, I see a sign directing me to a Paga agent. The kiosk, Lollipop Communications, looks like many others scattered across Lagos and Nigeria’s other urban centers. I ask the owner what services he offers: Pay your light bill, buy airtime or transfer money, he responds. Then he shows me how to instantly top up my phone through Paga, and I thank him.

“All of us are here for the journey, including myself,” Oviosu remarks during our interview. “We are trying to build a company that outlasts us, a company that lasts 200 years.” If the first eight of his projected 200 years are any predictor of Paga’s success, Oviosu’s big idea appears more than likely to pay off.

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