Moniepoint Business and Penetration Model

Moniepoint Business and Penetration Model

Moniepoint Business and Penetration Model

It’s safe to say that Moniepoint has solidified its stake in the mobile money industry. Ever since its emergence in the Nigerian market in 2019 as a solution to merchants selling cash; the Moniepoint team has consistently proven itself as a viable business partner to Nigerian SMEs.

Considering the burden of low internet penetration, growing poverty, financial exclusion, unstable economic climates, and unpredictable government policies, African FinTechs often have to be at their innovative best to build scalable services.

Luckily for Moniepoint, they seem to have cracked the code to scaleability. 

In this article, we will explore 

  • How Moniepoint achieved this Innovative best; and 
  • How you can imitate a few of their tactics for your own business.

At the end of this, you should have a grasp on the intricacies of Moniepoint’s business and penetration model, shedding light on its pioneering contributions to the realm of financial solutions.

What is Moniepoint?

Moniepoint is a business banking financial technology that simplifies access to cash services. With its extensive agent network, it enables financial convenience to both businesses and individuals through seamless transactions like withdrawals, deposits, and transfers.

As early as 2015, TeamApt (now Moniepoint) embarked on its mission to provide back-end services to Nigerian banks.

However, in an article by the Vice president of loans at Moniepoint ( Tobi Amara), the company’s domination began in May 2018, when the CEO, Tosin Eniolorunda, said “Let us build an agency banking app.”

It’s been half a decade since that impactful statement, and Moniepoint’s journey has further been marked by innovation and a commitment to deliver financial happiness. 

The MoniePoint Timeline

Moniepoint
Moniepoint

2015

– Moniepoint Inc. (formerly TeamApt Inc.) was founded by Tosin Eniolorunda and Felix Ike, who previously worked at Interswitch.

– Founded as “TeamApt” to provide back-end services to Nigerian banks.

2018

   – Tobi, the Vice President of Loans at TeamApt, receives the directive from CEO Tosin to create an agency banking app.

Understanding Market Needs: Sangotedo Expedition

   – Tobi and team conduct thorough market research in Sangotedo, uncovering agents’ challenges, particularly with reconciliation.

   – A critical need for a more transparent and efficient agency banking system becomes evident.

Version 1

   – A dedicated team of three, led by Tobi, develops a solution to address the reconciliation issue.

   – An additional leg to the transaction process allows real-time reports of transactions, bridging the blindspot.

Stability Enhancement

   – Solomon, a skilled engineer, joins the team to enhance system stability during NIBSS downtimes.

   – Improved connectivity with banks prevents fatal disruptions to agents’ businesses.

2019

   – Moniepoint’s potential as a game-changer becomes evident.

   – Over 80% of TeamApt’s resources are redirected towards Moniepoint’s growth, transforming it from a product into a business.

Exponential Growth

   – Moniepoint’s numbers skyrocket, processing billions in transactions daily.

   – Daily milestones are consistently exceeded, prompting higher targets.

Transparency and Empowerment

   – Moniepoint distinguishes itself by making commissions transparent for cluster managers and aggregators.

   – The move motivates agents to work harder and deliver exceptional services.

Diversification and Licensing

   – Observing agents receiving loan requests, Moniepoint recognizes the need to expand its offerings.

   – A partnership with an existing bank paves the way for loans and other solutions.

2022

   – On February 14, 2022, Moniepoint received a banking license.

   – The team contemplates name changes but ultimately decides to retain the name Moniepoint.

   – Moniepoint officially launches as a full-service business bank, offering a comprehensive suite of solutions.

2023

   – Moniepoint gains recognition as one of Africa’s fastest-growing companies by the Financial Times.

   – The bank’s impact continues to expand, solidifying its role as a pioneer in financial inclusion and accessibility.

Understanding Moniepoint’s Success Model

Driven by a customer-first philosophy, Moniepoint took a transformative step in 2019. Drawing upon its industry experience, the company adopted a more direct approach by providing business-facing products to merchants. 

Moniepoint introduced financial solutions tailor-made for merchants engaged in cash transactions, giving birth to groundbreaking products – Moniepoint and Monnify.

Delving into the core of Moniepoint’s operations, we can see its multifaceted business model. This model, born out of a blend of innovation and customer-centricity, has been a driving force behind Moniepoint’s journey from its early days.

Let’s dissect some of the layers of this success model:

1. Problem-Centric Approach

Moniepoint’s business model stands out due to its problem-centric approach, addressing critical challenges that plagued the agency banking sector. Traditional agency models faced a trinity of hurdles – transaction reconciliation, transparency, and stability during downtimes. Moniepoint, however, identified these issues as opportunities for innovation and growth.

Transaction Reconciliation Enhancement

Traditional agency banking systems struggled with accurate transaction reconciliation, leaving agents with the tedious and error-prone task of manually cross-referencing receipts. Moniepoint recognized this pain point and designed a solution that offers real-time transaction reports to agents. By integrating a leg in the transaction process flow, Moniepoint empowered agents with instantaneous updates on transactions. This not only simplified reconciliation but also enhanced operational efficiency.

Transparency as a Catalyst for Growth

The opacity in traditional agency banking models, particularly in commission calculations, hindered trust-building with agents. Moniepoint saw this as a pivotal challenge to address. By instituting transparency in commission tracking, Moniepoint differentiated itself. Agents now have access to a clear breakdown of their earnings, fostering trust and motivating them to process more transactions.

Mitigating Downtime Vulnerabilities

When traditional agency models experienced downtimes thanks to the Nigeria Inter-Bank Settlement Plc (NIBBS), agents and customers were left in turmoil. 

Acknowledging the vulnerability posed by NIBSS downtimes, Moniepoint perceived this as a critical vulnerability to resolve. By bolstering connectivity with partner banks, Moniepoint ensured greater stability during downtimes. This strategic move enhanced customer satisfaction and secured agents’ livelihoods.

2. Diversification and Adaptability

Moniepoint’s business model showcases a remarkable trait – diversification and adaptability. For  FinTech, this strategic approach is instrumental in staying attuned to ever-changing market dynamics and meeting the evolving needs of its users.

Versatility in Offerings

Moniepoint’s journey doesn’t end with transaction facilitation; it embraces diversification as a cornerstone of its model. Recognizing that businesses require a comprehensive suite of financial tools, Moniepoint expanded its offerings beyond basic transactions. The inclusion of loan services and other solutions signifies Moniepoint’s commitment to being a holistic business banking partner.

Adapting to Evolving Needs

In a dynamic market, Moniepoint’s adaptability becomes its strength. The introduction of loan services exemplifies this trait. By responding to agents’ demands for loan services, Moniepoint tapped into an unmet need within the agency banking ecosystem. This proactive approach not only solidifies Moniepoint’s value proposition but also positions it as a responsive and forward-thinking player.

By offering an array of services under one roof, Moniepoint not only enhances user experience but also secures its position as an indispensable financial partner.

Moniepoint’s business model demonstrates its agility and foresight. By diversifying its offerings and remaining adaptable to changing demands, Moniepoint establishes itself as a versatile player in the fintech landscape, capable of growing alongside the evolving needs of its users.

3. Integration of Banking License

A transformative shift in Moniepoint’s business model occurred with the acquisition of a banking license – a strategic move that propelled Moniepoint into the realm of full-service business banking. This integration of a banking license represents a pivotal milestone in Moniepoint’s journey, catalyzing the expansion of its range of financial services and solidifying its position as a comprehensive financial solutions provider.

Strategic Acquisition of a Banking License:

Moniepoint’s decision to obtain a banking license was strategic and forward-looking. This move enabled Moniepoint to redefine its scope and embark on a journey to offer a broader spectrum of financial services beyond agency banking. By gaining the regulatory approval to operate as a bank, Moniepoint unlocked opportunities to cater to a diverse clientele with more sophisticated financial needs.

Catering to Diverse Clientele 

The banking license not only expanded Moniepoint’s services but also broadened its potential client base. With a comprehensive suite of offerings, Moniepoint could now cater to the financial needs of various businesses, ranging from microenterprises to larger corporations. This diversification allows Moniepoint to tap into new markets and solidify its position as a go-to financial partner for a wide range of businesses.

Moniepoint Subsidiaries

Moniepoint’s diversified subsidiaries play a pivotal role in its business model, contributing to its overall growth and success. Let’s delve into each of these subsidiaries to understand their significance and how they contribute to Moniepoint’s overarching strategy:

1. Moniepoint Microfinance Bank, Nigeria

Moniepoint Microfinance Bank is a critical component of Moniepoint’s evolution into a full-service business bank. As a licensed microfinance bank, it allows Moniepoint to provide a broader spectrum of financial services, including loans, savings accounts, and other banking solutions.

This subsidiary enables Moniepoint to serve businesses and individuals with personalized financial products, fostering financial inclusion and catering to the needs of a diverse clientele.

2. Monnify

Monnify is another pivotal subsidiary that reflects Moniepoint’s diversification and adaptability. It is a payment gateway solution designed to facilitate online payments for businesses. 

By offering this solution, Moniepoint addresses the evolving needs of merchants selling goods and services online. Monnify’s transaction fees contribute to Moniepoint’s revenue streams while also positioning the company as a facilitator of digital commerce and e-payments.

3. TeamApt Ltd

 TeamApt Ltd is the foundational subsidiary that initially set the groundwork for Moniepoint’s journey. It provided back-end services to Nigerian banks and financial institutions, optimizing their operations and enhancing customer experiences. 

While not directly a financial services provider like the other subsidiaries, TeamApt Ltd laid the technological groundwork and expertise that paved the way for Moniepoint’s subsequent ventures.

Collectively, these subsidiaries operate synergistically to create a comprehensive ecosystem of financial solutions under the Moniepoint brand. The subsidiaries’ integrated efforts reinforce Moniepoint’s overarching business model and contribute to its ongoing success and growth trajectory.

Revenue Streams Fuelling Moniepoint’s Growth

1. Transaction Facilitation and Agency Banking

Moniepoint’s foundation lies in facilitating transactions for businesses through its agency banking platform. This involves processing various financial transactions, such as deposits, withdrawals, and transfers, for customers at agent locations. Moniepoint earns revenue by charging transaction fees to businesses for utilizing its platform, providing a steady stream of income from the high volume of transactions it handles.

2. Loan Services

Moniepoint expanded its offerings to include loan services for businesses. By providing loans to agents and other businesses, Moniepoint earns interest on the principal amount borrowed. This interest income constitutes a significant revenue stream, especially as the demand for accessible and timely loans continues to grow among businesses in  Nigeria.

3. Value-Added Services

Beyond core financial transactions, Moniepoint may offer value-added services such as bill payments, fund transfers, and more. These services often come with convenience fees, contributing to additional revenue streams.

When looking at Moniepoint’s monetization strategies, several evident techniques come to light. However, it’s important to note that there might be additional methods that aren’t as apparent.

Regardless, operating across these diverse businesses mentioned above, Moniepoint creates a synergy of revenue streams that collectively contribute to its success. This multifaceted approach not only ensures financial sustainability but also positions Moniepoint as a comprehensive financial solutions provider catering to a wide range of businesses’ needs.

Moniepoints Penetration Model

Moniepoint’s penetration model is a strategic approach that aims to enter the market, establish a solid presence, and gradually expand its influence by addressing critical challenges and adapting to changing market dynamics. This model involves several key steps and components.

1. Identification of Challenges

 Moniepoint begins by identifying significant challenges within the market it aims to penetrate. These challenges could include issues faced by businesses, individuals, or specific industries related to financial services, payments, or banking.

2. Focused Solution

Once challenges are identified, Moniepoint focuses on developing solutions that directly address these pain points. The solutions are designed to provide value, convenience, and efficiency to users, setting Moniepoint apart from competitors.

3. Initial Market Entry

Moniepoint enters the market with its initial solution, often targeting a specific segment or niche (as with the Sangotedo merchants). By addressing a specific challenge, Moniepoint gains a foothold and establishes its presence in the market.

4. Iterative Improvement

 As Moniepoint gains traction, it actively collects user feedback and analyzes data to identify areas for improvement. This iterative process allows Moniepoint to refine its solution, enhance user experience, and adapt to emerging trends.

5. Expansion of Offerings

With a solid foundation established, Moniepoint expands its offerings to cater to broader market needs. This could involve introducing new services, products, or features that complement the initial solution. The expansion is guided by a deep understanding of user preferences and demands.

Moniepoint’s penetration model is a dynamic and adaptable strategy that allows the company to enter new markets, grow its user base, and solidify its position as a significant player in the fintech industry. This approach prioritizes user-centric solutions, continuous innovation, and strategic expansion to drive Moniepoint’s success over the long term.

Moniepoint vs. Industry Benchmarks: What you can learn?

Comparing Moniepoint’s growth against industry benchmarks paints a portrait of its leadership. 

Moniepoint’s impressive growth sets a high standard in the world of fintech. When compared to how other similar businesses are doing, it’s clear that Moniepoint is leading the way. Its influence goes beyond just its own operations, shaping the direction of the entire fintech sector.

So far, Moniepoint’s journey is more than a chronicle; it’s a legacy. From its pioneering steps to its current stature, Moniepoint’s trail of success serves as an inspiration to the entire fintech community. The narrative of growth, resilience, and empowerment continues to unfold, reshaping Nigeria’s financial landscape.

If you’d like to take your business to the next level, stay informed about the latest fintech innovations and Moniepoint’s continued journey by subscribing to our newsletter. Join us in reshaping Nigeria’s financial landscape.

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