Agency banking continues to expand in places like Nigeria because of its model that ensures access to financial services for the underbanked and unbanked, at their convenience – these categories of people are the epicentre of their operations.
CrowdForce, a Nigerian fintech company has secured a $3.6 million pre-Series A investment led by Aruwa Capital Management with participation from AAIC and HAVAIC. The pre-Series A round was an equity and debt round.
CrowdForce wasn’t originally providing financial services nor was it known as CrowdForce. It was founded as MobileForms in 2015 by Oluwatomi Ayorinde and Damilola Ayorinde and was a data collection agent network with the purpose of capturing and building trustworthy offline data and providing insights into areas that are hard to capture for businesses, NGOs, etc.
As MobileForms, it achieved really impressive milestones. In 2018, the company worked with loan scheme TraderMoni – a scheme targeted at micro traders and spearheaded by the Nigerian government. This was the company’s first big break! MobileForms was to provide the database that the government needed to execute the project. There was no existing database, so MobileForms role was more than significant during the project.
The company, with its plethora of agents, performed KYC on at least 4.5 million traders and got them into the program. This was what led to CrowdForce – disbursing the money to these traders. With many of the traders either underbanked or unbanked – those that had banks accounts had bank branches that they literally had to travel to get to. In all of these, MobileForms saw a huge opportunity and decided to rebrand as CrowdForce.
MobileForms was then rebranded to become a financial services distribution network, giving merchants the ability to operate as mobile bank branches. According to co-founder and CEO Oluwatomi Ayorinde, “The idea was that if we could build this successfully well, several other fintechs can layer to deliver their services to the mass markets and that will still be in line with our objective of building our distribution. When you look at most of the successful companies in Nigeria, they all had to build some sort of offline distribution”.
Rebranding to CrowdForce did not mean the company discontinued its MobileForms service. It instead became a product offered by the company. The company’s Financial offering, its second product, is known as PayForce and is its main product. Through PayForce, the company provides regular banking services in areas that are typically uncovered by banks through merchants who double as agents. PayForce ensures management of the cash flow of these merchant agents and provides them with an extra income for being agents.
The main purpose of PayForce is to bring access to financial services to people in areas that do not have access to them. But this means that agents may face difficulties when they no longer have cash, and will have to take long walks or travel to areas where there are banks which is risky. This in turn means that customers are cut off from their access to these services.
To deal with the aforementioned scenario or any other that would place a hold on PayForce, CrowdForce has built partnerships with gas stations. These gas stations operate as a bank or cashpoint for merchants while CrowdForce securely holds their funds on a PayForce digital wallet.
“These stations [gas stations] collect cash from their sales of petrol daily. But now, we can leverage that liquidity, turn them to mobile ATMs that can then provide liquidity either to customers or to other mini agency banking outlets. So if you run an agent network and run out of cash, you don’t necessarily need only a bank branch. You can look for a gas station nearby and replenish cash flow”, the CEO explained. The company also distributes its POS terminal to other businesses such as pharmacies and reseller networks.
CrowdForce says it has partnerships with 19,000 gas stations, 20,000 resellers and 6,000 pharmacies. The company charges a 0.6% commission per transaction its partners make across all boards. CrowdForce added that it has been growing 25 percent month-on-month since 2020 and serves 1.9 million unique customers across 25 Nigerian states.
Speaking on the investment, Adesuwa Okunbo Rhodes in a statement said that “We see significant value in the product [CrowdForce] as it is solving a real problem by providing access to critical financial services in rural areas that have been overlooked by traditional financial institutions. CrowdForce is actively deepening financial inclusion through its products and services, and has unique competitive advantages through its proprietary technology and extensive agent distribution network across the country”.
CrowdForce will use the funds acquired to continue to spread its offerings to more Nigerians.