PayLater gets Specta Competitor
As expected, the Nigerian banks have started cloning some promising products from the fintech companies. Sterling Bank has unveiled Specta, an electronic driven retail lending product.
According to the bank, the retail lending platform gives customers access to personal loan of up to N5 million per transaction from anywhere through electronic gadgets within five minutes, eliminating the burden associated with obtaining regular loans from banks.
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“With this product, one can apply for a loan and get credited within an average of five minutes. We have done an average analysis and we discovered that it only takes an average of 2 minutes 55 seconds to access a loan on Specta and this is the first of its kind in the industry,” he said.
This should concern PayLater which pioneered this lending category in Nigeria. With N10 billion behind it, Specta will have the capacity to pick huge market share.
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Paylater is pioneering a new area in fintech along with other lending startups in Nigeria. Though their annual interest rates can vary from “31% to 213%”, for most people, it is better than nothing. Simply, they are meeting the needs of customers, left behind by banks. For the very fact that they are CBN regulated, it means that they have to disclose every element of their loan terms in ways that customers will understand.
Yet, with a more efficient cost model, Paylater can keep its interest rates very competitive. That will help it in retaining its category-king leadership in the sector. A fintech has a better cost model when compared to asset-heavy banking institutions.
But anyone that tells you that fintechs would easily disrupt Nigerian banks [not Kenyan banks] is not real. Nigeria has a different banking regulatory system which will make it harder for fintechs to take over banks while they sleep. In other words, once a bank sees promise in whatever a fintech is doing, it can clone that product or feature, throwing more money on it. The best fintechs in Nigeria are the banks!
That Nigerian 'thing', no idea or invention is secured here, except it's such that cannot be replicated under different name.
Most of the first-mover advantage is just temporary, once the market is 'bastardised', you can as well move your move to the next big thing, and then allow the late comers to finish themselves off.
There will always be those with more money to pour in from time to time; maybe the fintechs would be better off with developing the products and then selling to any interested bank, once a product gains traction .