Written in collaboration with Ovamba Solutions and Lagos Business School, this case study is the first to be released as part of our semi-annual “Virtual Sandbox Series” where we bring together the stakeholders to discuss and solve for the challenges being experienced by a real and active startup. Our first event featured George Obed, the Co-Founder and CEO of Nomad Money, the Central Bank of Nigeria, Lagos Business School, Providus Bank, Baylis Emerging Markets, Acuity Ventures, and more. (Read more about the event process and participants here)
Case Study Background:
Nomad began operating with the vision to launch a digital bank that would integrate all of a user’s bank accounts from across the globe into one account for easy access and management on a single platform. The Central Bank of Nigeria (CBN), commercial banks, and service providers (e.g. attorneys and subject-matter experts) all expressed different strategies and requirements for how to get the app off of the ground. The takeaway from these conversations was that recommendations were inconsistent and, in some cases, conflicting with actual practice or law. Without the correct licenses and partners on board, the founders were unable to launch their digital banking platform and instead pivoted with the release of an integrated money management app. Additionally, from a non-regulatory perspective, the market and regulatory inconsistencies resulted in reduced investor confidence and delayed fundraising.
A cohort of stakeholders (see speakers below) came together in a 90-min session to dissect Nomad’s challenges and propose recommendations for how Nomad, and other early-stage startups, can address them moving forward. Proposed solutions included:
- Forming of strategic partnerships with commercial banks to piggyback of their licenses in lieu of obtaining their own
- Launching an alternative product early would help Nomad obtain the traction and customer base needed to grow their ecosystem and obtain the capital needed to apply for a banking license
- Alternate licenses, such as the Microfinance Banking License, may be a good alternative for startups looking to enter the banking space but have capital and access limitations.