👨🏿‍🚀 TechCabal Daily – MTN alleges $53.7 million fraud

👨🏿‍🚀 TechCabal Daily - MTN alleges $53.7 million fraud

28 JUNE, 2022

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In today’s edition

  • MTN alleges $57 million fraud
  • FirstCheck Africa is $2 million heavier
  • PiggyTech pockets MMO license
  • Opportunities

MTN ALLEGES $53 MILLION MOBILE MONEY FRAUD

MTN isn’t finding it easy in Nigeria’s fintech space. 

Barely a month after launching its mobile money payments service bank, MoMo, it’s reporting a ₦22.3 billion ($53.7 million) mobile money fraud by 18 Nigerian banks. 

According to a lawsuit dated May 30, MTN claims that the amount was transferred in error to 8,000 accounts maintained by the 18 banks’ customers. 

READ ALSO:  NCC's security response team uncovers new cyber threats to windows

In the suit, Chief Executive Officer of MoMo PSB, Anthony Usoro Usoro, also claimed that the fraud was committed over a total of 700,000 transactions, over a one-month period. Upon realising the fraud on May 24, MoMo PSB reportedly shut down its service to prevent further liability. 

The CEO also mentioned that it was resorting to legal action upon the banks’ insistence that only court orders could bring action for reversal. 

The banks listed as defendants in the suit include: Access Bank, Ecobank, Fidelity Bank, FirstBank, First City Monument Bank, Guaranty Trust Bank, Heritage Bank, Polaris Bank, Providus Bank, Stanbic IBTC, Standard Chartered, Sterling Bank, SunTrust Bank, Union Bank, United Bank for Africa, Unity Bank, Wema Bank, and Zenith Bank

Zoom out: While this definitely calls into question both MTN’s backend operations, it also highlights a problem many fintechs are having with Nigerian banks: reversals for fraud cases take forever, and are impossible to trace. At least according to the banks. Maybe MoMo’s trailblazing starts by helping Nigerian solve this problem.

READ ALSO:  Nigeria’s SeamlessHR raises $10m Series A round to fund international expansion

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FIRSTCHECK AFRICA IS $2 MILLION HEAVIER

We endorse the rave about women in tech, but have you heard of women in VC? Here’s some news for you. 

Women-focused angel fund FirstCheck Africa has received a commitment of $2 million from Africa-focused venture capital firm TLcom Capital

The commitment is a welcome addition to the $10 million debut fund that the angel fund program is raising to invest in high-growth, technology-driven startups with at least one female founder or co-founder.

FirstCheck’s investments so far

So far, FirstCheck Africa has invested in 10 female-led startups in four countries. They include Foondamate (South Africa), Healthtracka (Nigeria), Tushop (Kenya), Zoie Health (South Africa), and more. 

The angel fund is striving to address the gender funding gap for female tech entrepreneurs in Africa. 

There is a gender funding gap in Africa?

Yes. Figuratively, the gap is as wide as the east is far from the west.

Factually, the numbers are worrisome. In 2019, female-led companies in Africa raised 3.2% of the total funding. In 2021, less than 1% to single female founders and female-only founding teams. Gender-diverse founding teams raised 17%. One of several reasons is an inadequate representation of women at the table where investment decisions are made. Only 10.6% of the startups funded in 2020 had women as decision-makers.

There’s more

FirstCheck Africa co-founder Eloho Omame will also join TLcom Capital’s senior leadership team as a partner. She will help discover best-fit opportunities to invest its new $150 million TIDE Africa II fund.

Most of TLcom Capital’s investments are in West and East Africa (Nigeria and Kenya) so it intends to start backing startups in North African countries like Egypt. In 2021, 99.8% of VC funding in Egypt went to male-founded and male-only founding teams.

With Omame on the team, TLcom Capital’s decision-making table is now 60% female. Hopefully, this development will do its bit towards closing the gender funding gap in VC investments across Africa.

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PIGGYTECH POCKETS MMO LICENSE


In today’s episode of “dress how you want to be addressed”, Abeg got a makeover. The former username-based payment platform rebranded to PocketApp, and pocketed approval to become a mobile money operator(MMO) from the Central Bank of Nigeria (CBN).

This transition reflects the vision of its parent company PiggyTech Global Limited’s commitment to financial inclusion as seen in its other products like PiggyVest.

Abeg is owned by PiggyVest?

No. Abeg, now known as Pocket, is a product of PiggyTech Global Limited which is also the parent company of PiggyVest. PocketApp, PiggyVest, and wealth management app Savi.ng are sister companies. 

Rumours that Pocket was owned by PiggyVest spread on social media when then-nascent Abeg was listed as a headline sponsor of the reality show Big Brother Naija in 2021. The claims were neither confirmed nor denied, but it is now cold news fact that the payment app turned social commerce app is a product owned by PiggyTech Global Limited.

Speaking about the approval, Odunayo Eweniyi, co-Founder and COO of PiggyTech Global Limited said, “We’re incredibly pleased that PocketApp has been granted an approval in principle as a Mobile Money Operator in Nigeria. We will now work closely with the Central Bank to meet all its conditions to receive the full operating license, enabling us to continue growing and expanding the scope of our social payments, social commerce, and other digital financial products to reach millions of Nigerian micro-entrepreneurs.”

What difference does this approval make?

A huge difference.

While Pocket will continue to cater to the growing Gen Z population enabling them to make and receive payments at little to no cost, the MMO license will enable it to do more heavy lifting. 

Wallet creation and management, USSD, pool account management, card acquiring, and any other activities that the CBN may permit are now possibilities in the near future for Pocket. 

While a bright future awaits Pocket and its about 2 million users, it has made updates to its current payment infrastructure including features such as escrow which protects buyers and sellers on its platform.

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IN OTHER NEWS FROM TECHCABAL

Funding and support for African startups and the tech ecosystem don’t just come from investment firms, angel investors, corporates, and tech hubs. There are other players too. Some are development agencies who are giving their attention to African startups.

It seems like there might be a slew of African startups expanding off the continent. First was MFS Africa expanding to the UK, and now Kora, a Nigerian payment infrastructure has also launched a UK office.

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OPPORTUNITIES

  • Wimbart is now open for the fourth edition of Wimbart Open Hours. Selected startups will receive keynote training sessions on communications and PR-relationship building from Wimbart and TechCabal. Apply by July 22.
  • Snapchat’s Snap 523 Accelerator Programme is now open to applications from black content creators. Twenty-five selected creators will receive $10,000 per month for 12 months and a Google Pixel 7 Pro. Apply by August 12.
  • Applications are now open for the Decentralised Umoja Algorand Bounty Hack II, by Algorand and Reach. The hackathon is a great opportunity for African developers to learn and build blockchain projects and win up to $3,000 in prizes. Apply by July 15

What else is happening in Africa?

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