 I welcome back from that feature, microsavings can also be an effective way to reach financial goals by certain specific savings goals and regularly saving small amounts towards these goals. Individuals can achieve their financial objectives whether it is saving for a vacation, a downpayment on a home, or an emergency fund, microsavings can help to make these goals more achievable. In addition to the benefits, I will look at micro-insurance and of course somehow all of that can buffer in these inflationary times. My guest Seth Osana is the CEO of Padimi.co, he is a visionary leader with over 12 years of private sector consultancy experience. A graduate of Ibn Eidya University, he is a member of the National Institute of Management. Seth's entrepreneurial ventures span finance technology, financial inclusion and social enterprise, driving impactful change, a leader in Padimi.co, he partners in a very tech-solutioned democratizing financial access in Nigeria with deep industry knowledge and a commitment to excellence. Seth imparts individuals and businesses shape in the future of finance. Many thanks for joining me, Seth Osana. Thank you JJ. Alright, in our pre-chart before we just came on board, we're talking about microsavings, micro-insurance and how inflation is actually hitting hard at people. So just how can micro-insurance really buffer all of these shocks? Okay, so the word micro, like everyone knows means small, bits and pieces. As the inflation is rising now, you know, there's talk about high inflation in Nigeria and its realities are hitting very hard. There is a financial scarcity of funds, right? The prices of things are skyrocketing, the purchasing power is limited. Now it's, I believe that palliatives are one way to help buffer things like that, but there's more to it. The individuals themselves have to also prepare shock absorbers for this and I think micro-savings and micro-insurance platforms are the things, are the ways to go. So I think tiny habits which foster financial inclusion, financial prosperity, are the things that need to be pushed around for people now to understand. So even though it's hard, people need more information about a lot of things, especially budgetary management, those kinds of things to help them write the inflation. So that's where things like, people like us and other, you know, fintechs in that space come to play. I believe that we're integral because we're able to get into the nitty-gritty places where the big institutions are not able to get. So we're able to hit the bottom of the pyramid almost immediately. Basically we're breaking down barriers in terms of access to what I call social security. So things like healthcare, things like insurance. Your average market woman will not go to an icon insurance or access insurance for anything. She doesn't believe that they have something to offer her, but I believe that with adjustments and enlightenment from people like us, they can see the benefits. So I can give you an example, some small products like some of the products we offer. The woman who is selling tomato, for instance, we have a micro-insurance policy which is powered by the bigger insurance companies. And basically it gives her a protection against illness, health, loss of business, right? That woman on the normal, they would not walk up to them and say, I'm looking for X, Ys because she doesn't understand it. But basically because we're able to break down those barriers, we're able to include those kinds of people, basically speak their language, give them the products as well because this product already existed. But because of the way it is tailored and packaged, it can now access it. Let me just butt in here because as it is right now, I'm still thinking about how the small scale people down the pyramid will be able to understand and appreciate all of these products that you have talked about. For instance, I'm looking at the average SME or small business owner who is practically struggling to even pay the bills and even pay the little employees that he has in his chain. And I'm talking to him about him putting up small amounts daily or putting out small little premiums so he can actually get some sort of coverage in case issues happen in the future. But most people tell you that they barely have enough to even take care of their bottom line when they're not to talk of keeping away some amount for savings or even for insurance. Okay, so I think it's also in this conception as well because disposable income is disposable in the sense that people spend on things they like, not things they feel are necessities. But now because of the way things like insurance or health insurance is pushed in and people don't see it as a necessity. So let me give you an example. An out-of-pocket payment for health care, say you have malaria now, by the time you run the test, pick a consultancy if you get a card, you're doing an excess of 15,000 in that one sitting, you're having a talk about the drugs. Now if you're going to do mayor and baker and the rest, you know it's already 30, 40,000 for antibiotics and things like that. Now in that instance, that person is probably going to cough out maybe 40 or 50,000 out of a push because he's sick and he's being choked, whereas if I had offered that same person a 4,000 a month health care plan that would do the same thing and cushion the effects, he would tell me, oh, I don't fall sick every day, whereas 4,000 last month saved you 50,000 today. So I believe that the funds are available for these things, but it has been pushed as a necessity. So let me explain why I say that. A simple health plan, NHIS is about 22,000 per month, 20,000 per month is someone, that business man who is a small SME owner, will probably eat shawarma three, four times a month. Maybe not. Maybe not shawarma, but there are expenditures where he would spend 3,000, 4,000 a month without batting an eye. It could be food, it could be something, his favorite drink or what not. But the people still are spent on frivolities in this particular time about post-subsidism. So no matter how hard it is, we still find time to drink and eat, no matter how hard it is. So I think that it's a matter of just shifting the ball a little bit, that's the way I see it. Things that we consider necessities, we tend to put our finances or we put money to it first. So if these things are seen as necessities and the benefits which they accrue are seen as a necessity as well, then people would be eagerly ready to invest in them. So for instance, if I told someone that just because you paid me 3,000 today, I would offer you a 150,000-dollar upfront in insurance cover. For that person, you would have to wait a difference, how often am I going to be in an accident? But for someone who is in an accident where he has to pay 150,000 in hindsight, that 3,000 would have been a godsend. So I think the way we push these messages, the way the brands push messages also plays a fundamental role. All right. I still want us to talk about micro-savings for a base because you cannot overemphasize the place of putting small money at the end of the day when income comes and all. That's when it does come because some people may say that they don't even get regular income. They should get normally or monthly. So how do we ensure micro-savings? How do we push people to put out something? Because before now, I remember back in the day, we used to have this popular saying, a large or small world. People just come daily. They come to your shop and you just save as little as 100, 500 an hour. And faithfully, people have savings and they don't really feel it per se. Yeah. So I think savings is a culture. That's how we like to call it. It is something that's either taught or programmed into people. So like you said, a large or a day old, it's not a new thing. I think there are a couple of companies, aside from my company, who are digitizing the systems. I believe that savings is key because it acts as a buffer and I believe people should actually intentionally save. Why do people have, I don't know, why do people feel it's hard to really save? So I think where the challenges come is in the medium of having to save. So for people who are forecast transit, there's money moving in and out. It's easy to just move a piece and close your eyes. For people who receive money on a timely period, you have to structure a plan for it. It has to be intentional because in that time span, a loss has built up. There's food, there's rent, there's fees. So having to take out a chunk to say you want to save, without you feeling the pinch takes an intentional effort. And I believe that it should be done because those things help. So talking about inflation now, if people have built up savings, right, you'd be able to invest that savings, you'd be able to use that savings to do some other thing. It could come in for a short one period where there's a crunch. So I believe that it's important. I'm looking at it maybe from my elementary economics that I did in school because what I know right now is that the interest pegged at savings in the country is practically very small. And if you measure it to inflation, which is about over 30 percent, you just wonder if it's actually really worth it over time. So also then again, so the scale isn't balanced, right? What the institutions offer for savings, I think most banks are still at 27, 28 percent right now. You have a 31 percent inflation rate. If you wanted to do the unit economics on that, if the inflation rate can wipe out that savings, but I believe that depending on the kind of instruments you save here, there is a buffer. So people who save in government instruments, you know, government bonds. So is it just about savings or saving or investing per se? So it's savings towards investments. That's the best savings. Just saving keeps the money follow. It doesn't generate interest. It doesn't add any value. It's just kept somewhere. But if it's the type of savings that's put in a platform that generates some type of interest that appreciates over time, it might be small increments, but those appreciations go a long way. So I believe that it depends on your savings. Just keeping money in the bank and waiting for the bank interest. If you keep 1,000 Naira in the bank for over a year, you're not going to get more than 220 Naira. True. Yeah, 20 percent over the year. But if you keep your small savings, the 1,000 Naira in say one of those small fintech apps where you have an appreciation cost of maybe 0.01 percent on your daily, it amounts to something. And then again, it forms a type of second security. Depending on the company though. It forms a type of second security. Platforms like mine whereby we encourage you to save because not just saving will help you build a credit profile. That credit profile means that you can access other forms of institutional finance, whether from fintechs or from the banks themselves. So people who have small businesses, I believe that savings is a tool to actually help you grow. Okay, let's talk about fintechs now and some of the products and services they offer in the wake of all of them, this pressures that we have on the economy. You know, from the reports I read sometime last month, Nigerians are just surging towards some loan apps because to try to meet the gap between when salaries come and them, the immediate and expenses and needs. And oftentimes we have realized that there is this backlog of on-repaid loans and some people even get into these facilities without even the intention of paying back just because they just want to be able to satisfy them now and just get this money. But so is it really a pain right now, the loan apps that we have? Because sometimes people even say that they are like sharks because if you look at what they charge as interest is actually much higher than what the banks are charging. Yes, so you have a valid point. Well, thank God for the regulatory bodies who have stepped in. Same thing applies. Information is power, right? I would not dispute that you have unscrupulous people who tend to use, but now the loan apps, the fintechs have also smarter and wiser though. They have stricter policies on entry, credit checks to see whether you've been banned elsewhere. And things like, yes, it's a good stopgap, but it's also, so it's a double edged sword. That's the way I say it. So for people who genuinely need access to quick finance, to solve a problem, for genuine business, it's a plus because it will help you as a stopgap. Going to a regular bank and trying to apply your processes are a little stringent. Whereas with the fintechs, your bottom line entry is a lot lower. So you can download an app, putting your BVN, and the thing is you'll get access to their basic minimum. But for more institutionalized ones, where they do a background check where you can access higher amounts. So people like family and the others, carbon and all that. That's not stable to function. Yeah, I'm saying those kinds of people, they do it differently. So very true. There are sharks among them, the CBN is trying to cop them, but in the same vein, they are very good ones in that mix. So would you say they actually have solved the issue of stopping the gaps, like you have said, in the wake of all of these issues of inflation? Would you really say that they are also buffers? Yes, I agree, they are buffer because they provide a positive service. For those who are genuine about their business, for those who have clean records, for those who have good repayment practices, you have access to almost instant cash. You want to keep bank facility, you're going to have to go through rigorous steps. Whereas if you're on these apps, and you're going through the process of diligently saving, building a credit profile with them, in this phase of 10, 20 minutes, oh, you have XYZ amounts, so I'm going as high as 5 million, right? So if you could get 5 million just by sitting on your phone, and being diligent, not just sitting on your phone, but being diligent through the process, and you build that credit profile, and you have instant access to almost 5 million to solve a business challenge, I think that's a plus. But if, on the same side, for those who access those kinds of amounts, they have gone through rigorous processes, they've been diligently paid back, they don't default. But the guys who are just, oh, quick fix, I want to take 10k today and delete the app. Those guys are also a problem as well because customer feedback, or the feedback the companies get, making more student for other people who actually need these things to get it because, oh, the last person we gave being paid back, he just deleted our apps. The loan check thing, the regulation is actually... All right. Okay, we are completely out of time, but just before we go one final question, what would your advice be now for a small business who is actually trying to weather the storm in these inflationary times? My advice would be diligent bookkeeping, right? Looking out for opportunities to expand your business. So where there is hardship, there's always opportunities. So I believe that if you have diligent bookkeeping, you have the right saving mechanisms, you keep your financial records clean, you should be able to access funds in this period right now because as it's hitting hard, the government is also putting out more positions for people to access cash. So if you run of those industries where they have subsidies for manufacturing or XYZ, then this is a good time to step in. Thank you so much, Amseth, for your time and of course some of the wonderful insights that you have provided on the show. Thank you so much for having me. All right, my guest Aseth Osana is the CEO of Padimi.co and we have been looking at inflationary times in Nigeria, how we can buffer all of the shocks through micro-savings, micro-finance and all of that. And I'm sure you have gotten one or two insight that can help you and your business. My name is Justin Akademe. This is where we draw the curtains on the show for today. Many thanks for being there.