Content Comparison

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• Build on Moniepoint’s current differentiation and strengths

• Build products that give high revenue and margins

• Drive customer stickiness

• Enable seamless customer acquisition

How we will achieve these business needs

[reorder to focus on the principles for what will be built]

Build on Moniepoint’s current differentiation and strengths

Product-led vertical focus

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• As a fintech we will build technical solutions that deeply solve needs of clients within each industry vertical

• Build product around Moniepoint’s strength in payments and collections

• Build solutions that build on our ability to access USD

Build products that give high revenue and margins, and penetrate industries upwards

• Focus on servicing the entire supply chain in an industry, to allow:

  • Moniepoint to retain deposits within our system (which are the cheapest form of capital, and enable more lending)

  • A large proportion of payments to be internal (which reduces costs and instability of payments to third parties)

  • Lending, where we have data on the entire supply chain (to minimise losses)

• Drive customer stickiness

  Build ERP solutions. This

  integrates

  drives stickiness by integrating Moniepoint with a client’s workflow, automates tasks for the client, and reduces theft

  Enable growth by seamless customer acquisition

• Build products optimised for the specific requirements of that industry, to make the value of the product high for other clients in that industry

• Focus on building for the entire supply chain, to make the value of the product high for other clients in the same supply chain

• Use our access to USD to bring client’s better pricing for USD-based products

Allow

Build solutions that give us access to USD

• This will allow us to offer USD products to our clients at competitive pricing

Build solutions that increase revenues for our clients

• The highest value pain point to solve for almost every company, is increasing revenues. If we provide clients with the ability to do this, we will win business and rapidly grow by default

• The quickest way to do this, which aligns with our strengths, is to allow instant payouts for incentives to sales staff

Prioritisation criteria

We have prioritised industries based on the following criteria:

• Collections in NGN

• Collections in USD

• Complexity of collections

• Ability to help clients increase revenues

Methodology

We have gathered data to assess the prioritisation against the above criteria. The data is from:

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Travel & Leisure has a high proportion of top 30% companies by profitability, however there are a relatively low number of total customers in this industry vertical.

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However profitability can be heavily influenced by lending income, and doesn’t give a true reflection from a collections point of view.Stripping out lending, we can We can see the size of industries from a collections standpoint below. The greatest volume of payments today is led by the same four categories, with the addition of IT/Electronics.

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External data - size and growth of industries

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In 2022, Nigeria exported a total of $70.7B, making it the number 51 exporter in the world (OEC).

During the last five reported years the exports of Nigeria have increased from $49.7B in 2017 to $70.7B in 2022.

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1. Crude Petroleum: $52.1bn

2. Petroleum Gas: $9.0bn

3. Nitrogenous Fertilizers: $2.0bn

4. Refined Petroleum: $1.0bn

5. Gold: $0.8bn

6. Special Purpose Ships: $0.6bn (note: related to Oil & Gas industry)

7. Cocoa Beans: $0.5bn

The most common destination for the exports of Nigeria are:

1. Spain: $9.4bn

2. India: $8.2bn

3. France: $5.0bn

4. United States: $4.8bn

5. Netherlands: $4.2bn

External data - remittances

Inbound remittances to Nigeria in 2021 had a total volume of $19.5bn (World Bank).

This is by a distance the largest in sub-saharan Africa, accounting for 35% of the total volume.

External data- deposits

Number of depositors by vertical:

Oil & gas, and financial services dominate depositors in the top 100.

Moniepoint’s natural focus will be more towards the mid-size corporates. Manufacturing, consumer goods, technology & communications and logistics are relevant verticals in this size range.

Type of deposit:

Foreign currency deposits (the overwhelming majority denominated in USD) have seen a huge surge in growth due to Naira devaluation- for the first time foreign currency deposits now make up more than Naira deposits.

To be appealing to many corporate and high net worth individual customers, the data makes it clear that Moniepoint will need to have a strong USD deposits offering.

External data- lending

Data-driven prioritisation

*this number is for manufacturing only. Moniepoint data includes distributors and retailers, so industry number for comparison is likely higher

Rationale for top 3 prioritisation choices

Retail & general trade

This is the industry providing the largest number of transactions for Moniepoint today, and the largest industry in Nigeria outside of crop production.

It is a growing industry, and contains a high percentage of Top30 profitable accounts today, relative to other industries serviced by Moniepoint.

The retail & general trade industry allow Moniepoint to build products to incentivise sales staff on a daily basis, which will allow clients to materially increase revenue.

Retail & general trade is a broad industry category, and allows focus on servicing distributors in sub-sectors. Suggestions:

• Supermarkets

• Pharmacies

• Restaurants

Each of these allow subsequent expansion upwards into the manufacturing supply chain for these industries.

For each of these, the industry is large, growing fast in real terms, and Moniepoint has strong presence in.

Remittances distribution

If inbound remittances were considered as an industry in their own right, they would be the second largest in Nigeria today after crop production.

Whilst this is not to be built within the commercial bank, it is a key part of the strategy.

Moniepoint, through their existing infrastructure to instantly settle payments across the whole of Nigeria, have a natural competitive advantage. Servicing our own retail offering and providing rails to existing remittance companies such as Wise, Remitly and World Remit will provide penetration into a market contributing $19.5bn of USD flow annually.

This will allow Moniepoint to create USD denominated deposits products that have a competitive advantage relative to others in the domestic Nigerian market. This is crucial for competitive offerings in the market today.

Manufacturing

Moniepoint has good penetration, can build a market-leading ERP solution solving real pain points, and work our way up and down deeper into industry verticals.

Agriculture is the largest industry in Nigeria- why is it not included?

Most of agriculture is subsistence. Only an estimated 5% of agriculture is mechanised industry. In addition, only 15% of current Moniepoint merchants are top 30% by profitability.

Summary- prioritisation

1. Retail & general trade

   1. Supermarkets

   2. Pharmacies

   3. Restaurants

   4. Fuel stations (to eventually expand to midstream and upstream)

2. Remittances distribution

3. Manufacturing