November 11, 2020 | 3 minutes read

Kuda: Building the Bank of the Free

By: Saul Levin
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Why Invest in Africa/Nigeria?

For the average African banking consumer, financial services are unbelievably frustrating and expensive. In Nigeria in particular, 60 million out of a population of 200 million do not have a bank account, while only 1.3% of Nigerians have access to a loan.

The average Nigerian consumer faces exceptionally high service charges when banking. There is a 2%+ processing fee for cash deposits, and 3%+ processing fees for a withdrawal amounts above $1,300. For corporate accounts, it is 5% and 3% for withdrawal and deposits above $7,500. In addition to excess fees, the Nigerian banking system is plagued by fraudulent activities and mismanagement by banking officials — resulting in poor liquidity and unavailability of credit for consumers.

Why Kuda?

 Kuda was founded in 2018 by Babs Ogundeyi and Musty Mustapha — both of whom have extensive experience in building out banking products. Babs was previously the Senior Financial Advisor to the Oyo State Government in Nigeria, while Musty has led software teams at Stanbic, First Bank of Nigeria and Keystone Bank.

Through a single banking app with minimal fees and sub 2 minute onboarding, Babs and Musty have created a new kind of bank that helps its customers by making banking affordable, accessible and rewarding. Kuda users have access to features such as auto budgeting, free transfers, auto savings, bill payments and international remittance.

 Babs and Musty are focused on rapidly improving the current challenging and expensive experience that the Nigerian consumer endures when both signing up and utilising traditional banking services — characterised by multiple physical branch visits, a vast amount of documentation and excessive fees. Kuda is meaningfully improving the holistic banking experience of Nigerian consumers with a clear and well thought out path to providing them with a single storefront for their financial lives.

 This value proposition has the potential to transcend geographies and position Kuda as a continental alternative to traditional African banks, which trail Kuda in user satisfaction and digital utility.

 Indeed, we don’t just think that Kuda will break down the barriers to consumer banking, but so too will they give their users access to best-in-class products by developing the app as a distribution channel for other financial and non-financial service providers. This will include health insurance and investment products with access to both local and foreign stock markets, as well as the ability to pay utility bills and purchase airtime — both of which are available in the application today.

As a crucial extension to the Company’s core mission, Kuda has built out an open API to power the financial offerings of other fintechs and tech-enabled businesses. This essentially enables builders to leverage Kuda’s banking infrastructure to build financial services offerings or incorporate them into their existing products. It is now easier than ever to build a fintech in Nigeria, and this makes a meaningful difference to the lives of millions.

 We are proud and fortunate to partner with Babs and Musty on their journey to annihilate the barriers that currently restrain financial innovation in Nigeria. Kuda joins the Entrée Capital fintech family which includes FundboxRiskifiedRapydFinomStashStripe and many more fintech’s around the world.

If you are an early stage founder building a business that is transforming financial services, you can find me here: saul@entreecapital.vc