Kuda Business, a small and medium enterprise (SME)-targeted product offering from Kuda, one of Nigeria’s digital banks, recently reached a milestone of 100, 000 SMEs. The management team of Nosa Oyegun, VP, product innovation strategy, Kuda; Emmanuel Opara, engineering lead, Kuda Business and APIs and Okoronkwo Kanno, senior product manager at Kuda, in a call-in interview with SEYI JOHN SALAU, spoke to what the 100,000 achievement means to Kuda Business as a product and other unique offerings to the product to small and medium scale businesses in Nigeria. Excerpt:
What gap did you see in the market that led to the creation of Kuda Business as a product?
Kuda Business was designed to address the gap of inadequate accessibility and comprehensive banking services by SMEs. That was the primary gap identified – we discovered, through research, that traditional banks were trying to serve their biggest clients while SMEs, people who were formerly in the industry and broke off to start their own trade, were not being adequately supported. This is why we are in business. Some of the issues we identified were high transaction fees, some of the banking solutions that didn’t seem like they were built for them, bureaucratic loan applications and inadequate financial support. So, Kuda Business is here to fill those gaps, build banking services tailored for SMEs and ensure they are supported financially.
What separates Kuda Business from other products in the market?
We built Kuda Business with SMEs in mind. We are focused on their challenges and the nature of their business. We did not build a solution and expect everybody to fit into the market. We are entirely concerned about how SMEs receive payments, how they make payments, their invoicing process and everything that we have built is centred around that journey – making sure that SMEs can easily get paid, making sure that payment is a seamless process for them – even to the point where we found out that we had a group of customers who had side hustles that were not registered. Our research led us to build business registration services for them so that they can run their businesses on our platform. That is what I mean when I say we are focused on SMEs.
What were some of the challenges encountered with creating this product and how were they addressed?
The creation stage wasn’t like the typical product development process. So, you start with peers and then go into the market to try to validate by asking the question – is this product going to solve an existing problem? A lot of our work has been customer research to validate our ideas. We did this because there are some ideas that might seem good from your perspective, but could find out that your target audience is solving them in other ways or that they have more important problems that need to be solved.
One of the major challenges we faced at the beginning was building the Kuda Business platform on the financial infrastructure available in Nigeria, and being able to offer features that are not necessarily traditional banking services. With business registration, for example, what we found was that we couldn’t sign up customers to the upper tier of our business banking product, which is a full business banking app until they are registered. So, we had to find a way to make it easy for them to register their businesses and incorporate them so that they could open a full Kuda Business account.
Could you speak to the innovation behind the product development and how you think it is addressing challenges faced by SMEs in Nigeria?
The product itself was optimised for small businesses. So, it was designed with things that relate to small businesses, especially things like getting started, – like registering your business. If you want to get a business account with a traditional bank, they expect you to come with a registered business. On the other hand, we say come as you are and we will help you register your business, get your CAC certificate, and start your formal business journey. So, the big innovation for us was focusing on the type of customers we wanted to serve and offering things that would be relevant to them. Our primary product, the personal Kuda app that most people are familiar with, was built for individuals but over the years we have seen some of those individuals using those accounts for business. So, it’s a logical next step to give those individuals the ability to open business accounts. One of the possible reasons people use their personal accounts for business is because their business is not registered. Most people don’t know where to start with regards to registering a business or getting in line with the law. So, that’s one of the things we felt we needed to be in place to get people to get started.
Another thing is helping businesses get paid. We recently launched our PoS terminals. When you register a business, you can request a PoS terminal on the Kuda Business app and have it delivered to you. If you don’t want a PoS terminal but you have an Android device, you can receive contactless payments. Basically, you can tap a card to receive a payment from it with your phone. A lot of the innovations that we bring together are things that affect small businesses because traditional banks don’t have structures for small businesses.
Can you speak to the alignment between Kuda Business as a product and Kuda as a company?
Kuda Business aligns with our mission to make financial services accessible, affordable and rewarding for Nigerians. When it comes to accessibility, most people use their personal accounts for business because setting up a formal business is not something that is easily accessible. We decided to simplify that in line with our mission of making financial services accessible, which is why a lot of the things that we do at Kuda and a lot of the products that we build are centred on convenience. If anything is stopping you from getting easy financial access, you should download the Kuda app. We have removed the obstacles.
How simple are the innovations embedded into this product?
We designed the product with the audience in mind. We designed with the customer base and demographic base; so, we tried to simplify things as much as possible. The user journey from step to step is as simple as it should be; it’s not overly complicated. We don’t give you very long forms to fill out, we don’t use very big grammar, everything is simple and we feel the average person on the street can understand because we know this is what our audience needs. We were very intentional about designing a product like that. If it’s something that we feel is going to be complex; we have to take it back and refine it over and over until it is straightforward.
What are the charges and additional benefits for business owners using this product? In other words, are there no hidden charges?
There are no hidden charges. Transparency matters a lot to us, so we are upfront. If there is any charge, we explain what the charges are for. We still believe in our no-fee model – I mean there are some things that do have a cost; like registering your business has a cost. There is a legal charge that comes with that but we are upfront about that. It’s not something that we try to hide in some legal agreement or something. So, we only charge you when there is a cost, otherwise, it’s as simple as downloading the app and opening an account. There is no cost to opening an account, there are no minimum deposits, and there is no minimum account opening balance.
Where do you see Kuda Business five years from now?
We feel that as far as economic and business prospects are concerned for Nigeria – it will be driven by small businesses. And, for small businesses to be able to drive the economy for prosperity, they need support. In five years, we want to be the bank that supports small businesses because small businesses make up about 90 percent of the business landscape. This fact gets overshadowed by a couple of large corporations that will always be well-served by the larger banks. But the smaller businesses, the market woman on the road, in the markets, the guy that owns a shop on your street – all those people need financial support, they need access to credit, they need different things that the big banks don’t have time for. So, we want to be the bank that has the time for small businesses and empowers them because it’s only when these businesses flourish that the country will prosper.
The product, Kuda Business, just reached a milestone of 100,000 SMEs; what does this mean for the product and what other milestones are you aiming to achieve within the year?
Reaching 100,000 SMEs on Kuda Business is a testament to the impact we’re having on the Nigerian business landscape. It validates our approach to simplifying complex financial tasks and empowering entrepreneurs. We aim to deepen our support for businesses beyond just transactional banking. Kuda plans to add features such as financial advisory services, tailored credit solutions, and educational resources that drive business growth. We also intend to strengthen our network of partners, providing seamless integration with accounting software, inventory management tools, and other business solutions. The goal is to further streamline operations for our clients and position Kuda Business as the central hub of their financial activities
Every tech product is divided into the front and back end; can you walk us through the technology that supports this product?
Our choice of technology is dependent on what is best for the services being offered. We typically consider speed, stability, and scale when we’re making our decision. There are a lot of businesses that want to scale in terms of their operations, so our choice or use of technology is based on and streamlined to whatever those businesses need to operate efficiently as they scale. Without being specific, we use best-in-class technology to make sure that we meet our customers’ needs.
How have you prioritised security for users of this product?
Any business that doesn’t put security first with respect to the products or the underlying infrastructure basically is sitting on a time bomb. We have invested a lot in security, from the components that make up the engine that powers Kuda Business, to the interface that users sign in to on their mobile devices or on the web and other utility services. We are well aware of the increase in fraud cases globally, so we are always working to keep the systems secure even while we try to roll out products as quickly as possible. Security is definitely a key factor in the development of our products. We definitely wouldn’t want to see our customers defrauded, and particularly not because of something we could have prevented through security controls.
One thing we can’t take away from tech is downtime; if for any reason there is a downtime, what is the time frame for resolution?
We aim for 99.9% uptime but if there is a downtime, we let our users know as soon as possible and send them an update as soon as things are stable. We can’t necessarily give a general time frame for service restoration because downtimes could vary. This is why letting our customers know what’s going on is important. Let’s say you can’t make a transfer because a third-party bank or service is unavailable, you most likely would have received a message from us letting you know what’s going on.