In a recent article from TechCabal, I got to find out that Kuda Microfinance Bank made a loss of 6 billion naira, which is the equivalent of 13,935,663.60 United States dollars.
Kuda Microfinance bank is a neobank that operates in Nigeria and London. It is a startup that began in London and now has grown its reach within the walls of Nigeria. Their main objective is to provide affordable banking services to people of all kinds. This neobank came with its uniqueness that grabbed the attention of many Nigerians and that was free transfer charges. This unique spec has grown its valuation to the sum of 500 million dollars, thereby making them a soonicorn. In addition, the startup was founded by Babs Ogundeyi and Musty Mustapha. Before I forget the bank was initially given the name Kudi money in 2017 until 2019 when it changed to Kuda Bank.
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As a user of this bank, it is quite flexible and fits well into my style of living, simple and easy to coordinate. This feature is something you will find in the app. The UI is quite simple and it follows Peter Thiel's idea of a startup in his book, Zero to One
keep it simple.
But with the article gotten from TechCabal, I was left wondering, is Kuda making money, or are other banks exploiting their customers?
With this new era of neobanks and fintech emerging, we have come to see that these banks are doing a coded job of exploiting their customers. Take, for example, a bank like Zenith currently suffering from some poor server issues, with lots of hanging transactions and people even putting out there on Twitter about the bank's poor performance, but yet when the quarter comes to an end, they will still deliver a profiting result
So I ask where is all this money coming from?
It's simple if you look at it closely, the money is coming from the charges added to every transaction customers make. Ranging from charges for SMS NOTIFICATION down to card maintenance. It's funny how they can still charge you for card maintenance on a card you probably haven't used in a while. This is disappointing and I remember how annoying my experience was with a bank. When I went to get a new card cause I had misplaced the old one, they could see all my details and transaction history and even the image attached to the account, but yet they asked me to write a letter to the branch where I opened the account because I happened to be in another state at the moment before my new card can be released. This just goes to prove that protocol systems in those banks are crap.
Imagine every day there's a long queue at the bank filled with people experiencing one kind of issue or another and yet their staffs are still rude and nonchalant towards this customer. All I can say is their staffs are just tired and stressed out from working for a corporate-sucking organization.
In conclusion, imagine how much these banks made when they used to charge about 50 naira on every transfer until the government placed a new rule against it.
I've worked for a big corporate company and all I can say is the growth system is very slow and bureaucracy is always an everyday thing.