RenMoney opened with a single branch in Ikoyi, Lagos, back in 2012, offering fast and easy-to-use unsecured loans and investment accounts. “Our journey so far has been an interesting one,” says CEO Graham Lee. “We began with a focus on the unmet financial needs of the ordinary Nigerian consumer. This understanding led to the development of our simple money solutions, which have seen excellent growth in demand. We have opened six additional branches - two in Ikeja, and one each in Surulere, Lagos Island, Apapa and Ikota. And since the beginning of 2015 we have had more of a focus on non-branch channels, including agency banking, a state-of-the art call center, internet and social media applications as well as channel partnerships.”
RenMoney’s primary focus is its unsecured loan product but, says Lee, there is a need to balance loan book growth with raising funding in the form of its Fixed Term investment product. He says: “RenMoney has some of the best risk-adjusted rates in Nigeria, accompanied by flexible terms designed specifically for each investor.” Its clients are both employed and self-employed individuals who are underserviced by commercial banks. “This means that we cater for a large spectrum of Nigerian society. Our products are developed to be accessible to the mass market, but with a quality of service and pricing that makes them attractive to higher middle class salary earners,” says Lee.
To build RenMoney’s brand from nothing, and to get its message out to ordinary Nigerians, the company had to develop an integrated marketing strategy. Lee explains:
“We developed a message and use traditional, digital and alternate media platforms to consistently get that message into the minds of our target audience. We find that we can tailor these channels to reach our desired market better as we come to understand what they want to achieve with their personal finances.
“When we came into Nigeria, it was important that we partnered with an established Credit Bureau with extensive coverage of our target market. And that naturally was CreditRegistry Services (CR Services) Plc.”
“CR Services operational strategy was clearly in alignment with ours. Especially, in areas of automation of credit processes for large-scale consumer lending, data quality, speed, reliability and ease of use. We have in my own opinion made the best choice.”
“We have been able to consolidate our hold on the market through superior support, service and products like the SMARTScores (Nigeria's first bureau credit score) designed and delivered by CR Services.”
Through a multiple channel approach, RenMoney has managed to grow quickly but sustainably, increasing its loan sales by more than 100 percent while actually halving its loss rates. Technology plays a central role in RenMoney’s operations and it was the first organization in Nigeria to use a cloud core banking solution. Lee adds: “The appropriate use of technology makes us more efficient and agile than our competitors, which is a very important aspect of our business model. Technology is a vital enabler of RenMoney’s strategy, but it is not, in itself, our strategy. Technology (and cloud technology specifically) is at the nexus between strategy and execution, control and flexibility and, ultimately, success and failure.”
Lee emphasizes that meeting the needs of the ordinary Nigerian consumer is the ultimate goal of RenMoney and cautions against overstating the importance of technology. He says: “I think that, with the excitement surrounding FinTech, people have gotten carried away with the software and the technology as end in itself; this is a mistake. RenMoney is a FinTech company in the sense that execution of our strategy is dependent on the appropriate use of state-of-the art technology, integration and innovation to outperform our competitors and the incumbent banks. Therefore we have become excellent integrators and innovators, leveraging the platform provided by Mambu and GDS (our cloud-based software-as-a-service providers) to improve risk management through better collection of data, better management of data and better analytics, increase operational efficiencies and reduce marginal costs, and thereby enable price and service leadership, and to bring our offerings to those previously excluded or underserviced by the financial system.”
Mambu and GDS, RenMoney’s key technology services, are cloud based, allowing it to operate a low cost but high volume business that is truly scalable. Lee adds: “It frees us from the distractions of maintaining physical server infrastructure, daily backups and worrying about disaster recovery. In addition is allows for fast project execution and delivery, which was an important requirement of ours. It enables our technology team focus on innovation, process automation and building great customer experience rather than worrying about the underlying infrastructure, security, scalability or performance. We are also supported by an excellent credit bureau, CR Services which provides us with fully-integrated, high quality data services. ”
Clearly it is crucial for RenMoney – and its customers – that any technology it uses is a robust solution. Lee says: “The process of ensuring that our systems are robust begins with our IT Steering committee which was established to continually review our technology capabilities and ensure that we have the right technology in place to meet both the strategic and operational needs. The next step are the periodic reviews and stress tests conducted on both Mambu and GDS, as well as our own integration hub. In addition, we regularly engage external auditors to review our technology platforms and make recommendations in line with industry best practices. Internally, our Operational Risk team carries out an annual IT risk assessment, which more than likely will identify gaps that need to be addressed. We have also adopted international best practices in technology change management. This ensures that no change to a production system is made without a formal User Acceptance test (UAT) which must be signed off by appropriate stakeholders.”
RenMoney currently employs over 300 people and is hoping to add another 100 or so to this. But, says Lee, 2016 will be a very difficult year for business in Nigeria. He adds: “We have an optimistic long-term view. Our business strategy for 2016 is to remain focused on the four key pillars of our strategy.” These pillars are: world class risk management (including both risk analytics and collections); innovative and cost-effective technology that allows for processing high volumes at a low marginal costs; price leadership and strategic partnerships. Lee believes that strategic partnerships will drive growth in the year ahead. He concludes: “We have a number of channel partnerships that we are developing that will see RenMoney offering accessible consumer finance at the place and point in time that our clients need it.”
