Currently, developers and organizations in Africa lack access to real-time banking data, a problem that sets up large hurdles during the onboarding and verification of customers. It is this long-standing infrastructural gap Nigeria-based startup Okra is looking to fill, with its “super-connector” that creates a secure portal and process to exchange real-time financial information between customers, applications, and banks.
Launched in January 2020, the company is delivering a new layer of transparency between organizations and users in the lending, personal and corporate finance, as well as real estate sectors. It secured a $1 million pre-seed fundraise from TLcom Capital last month, its first investment, strengthening its bid to build the infrastructure for fintech innovation in Africa.
Okra is the latest company to take advantage of Open Banking initiatives across the globe, which has attracted increasing attention from investors. In the United States, Plaid, which allows users to connect their bank accounts to an app, has been acquired by Visa for $5.3 billion since launching in 2013. Yodlee, an American company offering a similar service, secured more than $140 million of funding before being acquired by Envestnet in 2015.
Eager to find out more about the importance of API and how it can help foster transparency in Nigeria’s financial sector, Ventures Africa had a discussion with Fara Ashiru Jituboh, chief executive of Okra, who spoke on API role in finance, the company’s objectives and her perspective on progress in the online lending industry.
Ventures Africa (V.A): Can you say a bit about your background and your role in Okra?
Fara Ashiru Jituboh (FAJ): I have a background in engineering and previously, I served as a Co-Founder and CTO (Chief Technical Officer) at Shixels Studios (a creative agency), leading software design and development for clients such as Renmoney, AXA Mansard, Airtel and Sanofi Pharmaceuticals. I’ve always enjoyed building and scaling products and I’ve been fortunate enough to work for multiple Fortune 500 companies, including JP Morgan Chase, Fidelity Investments, and Daimler Mercedes Benz.
My technical experience has been especially useful whilst we’ve been building Okra, and I also act as our company’s CTO as well as CEO. As you can imagine, every day at a startup is different but my main tasks revolve around overseeing the design and development features for our software as well as building alongside and developing strategies for our engineering team and the wider company.
V.A: In layman terms, how would you explain what Okra is?
FAJ: We provide an API that makes it possible to connect a bank account to any web or mobile app. An API is something that sends information back and forth between parties and in our case, this information is real-time banking data. Currently, organizations and developers across Africa don’t have access to this, which causes issues when they’re trying to verify and onboard new customers. Our API is effectively bridging the gap between the real-time financial data of customers and these organizations who need it.
V.A: How did you come up with the idea and then got started?
FAJ: The idea arose after I came back to Nigeria in 2019. I was speaking to a lot of CEOs and CTOs and I noticed the infrastructure gaps in Nigeria’s fintech space were all causing the same issues. Around this time, I also connected with my Co-Founder, David Peterside, a family friend who coincidentally was looking to solve the same problem. We knew how large the market was given the number of executives who referenced the issue so we decided to join forces and launch in January 2020.
V.A: Who are some of your clients and how do they use your platform in their operations?
FAJ: Our clients operate in personal & corporate finance, real estate and banking & brokerage and include the likes of Branch, AIICO Insurance PLC, Travelstart, Bamboo, Renmoney, and Swipe (YC). Each client uses our platform in accordance with their needs.
Digital lenders rely on our real-time banking data to make more informed decisions on customers, corporate finance clients use us to reduce administration time on their accounting tasks and real estate clients are able to verify customer identities quicker, which speeds up the onboarding process. We have an application which is useful for a number of purposes and we’re looking to expand into more industries in the future.
V.A: What are the main objectives of Okra for the year considering the ongoing pandemic?
FAJ: Since the start of the pandemic, we’ve actually seen a 175 percent rise in demand for our services as more businesses look to digitize their services. With this in mind, our priority following our investment is scaling our team and operations as we look to secure more clients.
V.A: How important is an API in the financial industry, particularly Nigeria’s in this context?
FAJ: It’s critical – without an API, there’s no way of establishing connectivity between banks, users, and organizations and we’re seeing the implications of this in the industries we serve. For example, companies in Nigeria’s personal finance space struggle to get a full picture of their customer’s financial health when they have accounts at different banks. This creates more caution in the products they provide and stems the flow of wider activity in the economy.
With a robust API, these issues with transparency no longer exist and companies have greater assurances about delivering the services that will push our country forward.
V.A: Let’s talk a little about regulations. Are you also monitored by the central bank and are there any challenges in that regard?
FAJ: No, Okra does not require any license to operate from CBN, SEC, or any other financial regulator as we are neither a lender nor a bank. We are a technology company leveraging the Open Banking System.
V.A: How would you assess the overall state of the online lending market in Nigeria and what is your perspective on the industry within the next five to ten years?
FAJ: Over the last few years, we’ve seen a lot of movement from digital lenders to address the lack of access to credit in Nigeria and also target unbanked customers, which is over a third of the population. It’s been a positive move and through technology, customers have the option of receiving uncollateralized loans and in a matter of minutes rather than having to fill out numerous forms in person.
However, the degree to which Nigeria’s fintech industry can grow is intrinsically tied to the success of infrastructure like Okra. There are over 125 million bank accounts in Nigeria alone and we predict this figure will rise exponentially over the next 5-10 years. Online lenders will only benefit from having a frictionless ecosystem and this will be the driving force for the next stage of innovation in the industry.