Feature/OPED
Four Ways FMCG Distributors Can Use Embedded Finance to Grow Trade Within Supply Chains
By Ope Adeoye
You have a shop in the neighbourhood or market selling things like milk, noodles, sugar, etc. Now imagine that your plug for Nestle, Unilever or Flours Mill of Nigeria (FMN) products provides you with a special bank account. “That’s absurd, why?” You say. Let’s take a step back a little…
This distributor has probably done business with you for five, 10 years or more, knows your business, your purchase, sales and payment patterns, and can, in fact, offer financial services better suited to your business.
This is because they know more about you than perhaps the big-name bank you use down the road. For example, when you need to expand your business from one to two shops, your bank is unable to give you the loan to help you do that because, frankly, it can’t tell whether or not you are into what you claim is your business.
Your bank statement does not contain enough information about your business to help them decide and they don’t know what you sell daily, weekly, etc. Or the margins you get on each supply you receive and sell. But, your distributor provides you goods, maybe weekly or even daily, knows the volumes you move and how promptly or not you make payments. Also know the margins in each product. Just like you, they know the business.
If the distributor could finance you to grow your business, you will buy more from him. And sell more. And she in turn will pull more volume from Nestle, P&G, etc. Win-win-win for everyone.
The spoiler? That distributor is not a bank and can hardly do more than give you goods on credit, occasionally. She definitely doesn’t have the liquidity to cater to all of your growth needs.
That’s where embedded finance comes in.
A Forbes article describes embedded finance as “the use of financial tools or services — such as lending or payment processing — by a non-financial provider,” and expanding this, the end goal is to offer customers a payment experience that is likely to keep them loyal and continue doing business through that platform.
Here are four ways the FMCG industry can utilise embedded finance, to offer financial services throughout their supply chain, without having to grow through the overhead of becoming banks themselves.
Credit line to keep goods moving
The supply chain as of today is mostly analogue and it is hard to accurately know in micro details, what role every participant has played. To be clear, a manufacturer or distributor would have records of how much inventory is sold or not, but does it know what moved across different categories of distributors and down to retailers? Not likely. And definitely, not accurately.
Digitizing the workflow creates an integrated ecosystem in which every player becomes visible in the supply chain. This is especially important for players closer to the bottom of the chain, many of whom the FMCG manufacturers would have no direct records of, yet are active participants in getting goods down the last mile and to consumers.
Many of these could rely on physical bookkeeping to track their finances, but when they need a credit line for goods from the same company, showing a track record becomes challenging. Even worse when they buy their inventory through layers and layers of middlemen and sales agents.
A finbox article emphasised that “The digital integration of smaller distributors and local stores through payment solutions, accounting apps, and banking solutions will generate standardized data on transactions within the chain, leading to increased transparency at every stage – tracking goods, inventory management, and sales.”
In essence, offering digital tools that help a retailer to spend, receive and track their money – embedded finance, could allow a 3rd party (or even a bank) have the visibility and confidence to step in to offer credit lines that support the retailer with goods or services (as the case may be), based on their transaction history, which would have been recorded on the platform.
In a practical sense: If a shop owner usually buys N20,000 worth of inventory every week, consistently, and a bank or lender has visibility into this, they are able to step in to help increase the basket size to N30,000.
Needless to say, the more goods the retailer is able to sell, the more the FMCG distributor or manufacturer itself stands to make. With embedded finance – inserting the services of the bank or lender into the (now digital) exchanges between retailer and distributor, we are now able to determine based on transactions; who is qualified for what level of credit line. It becomes possible to have data-driven decision making that keeps retailers in business and possibly expanding and invariably, the company at the top of this chain keeps winning.
Insurance on sales
Insurance is often overlooked in this part of the world and when offered to people, it is not unusual to hear; ‘loss is not my portion’. Yet, losses occur, and perhaps more frequently than many would like to admit.
However, there are instances where insurance is not optional, especially for the transnational movement of goods.
As part of the supply chain experience, insurance protection can be embedded within the solution offered by the FMCG manufacturer or distributor. As usual, an insurance provider needs historical data to determine risk and price it appropriately. The digitization effort creates this trail and makes this possible.
In practical terms: It’s not uncommon for drivers of delivery vans to drive off with goods and cash. Or get waylaid by urchins. Embedded insurance protects against this possibility. But requires digitization to be effective.
There are even more interesting insurance products that can be designed: Imagine a retailer getting money back for inventory they were unable to sell due to external factors? Yes, possible.
A financial bouquet to do more
The account number that ties any dealer in the supply chain to the embedded finance solution, can also be used for any regular banking service. So, when the delivery of Indomie Noodles comes from Dufil and the distributor needs to pay the haulage company, they are able to do so through the embedded finance solution provided by Dufil. They would not need to log into a separate bank account, then make a transfer, or worse still, hand over a wad of cash.
Payment for warehouses, store rent, utilities and even salaries of employees can be done from that account provided by the FMCG company.
A distributor can make all business-related expenses from that single account, making it easy to accurately determine what costs are associated with that business, and how profitable or not it has been.
The good part of this? Because the account is provided by the FMCG company or Distributor, they usually have negotiated “corporate pricing” with the bank or financial service providers… and because they are not in this to make money from banking services, per se, they are able to pass those gains down to the retailer in the form of cheaper services, etc. Imagine sending money for less or buying airtime at a discount because the margins of the bank have been passed to the retailer in the form of incentives.
Integrated payment experiences to eliminate cash
Every distributor and manufacturer knows that cash handling is a big problem and cost. The retailer receives cash from his own customers. The retailer pays the wholesaler or distributor in cash. Everyone has to count, reconcile and move that cash around. Someone pays for the insurance on that cash, someone pays the cashless penalty on that cash, Etc.
With an embedded bank account, the distributor can in one click take payments from the account of the retailer when the time comes to pay.
With an embedded account, customers can pay directly into the account of the retailer versus cash. And these days, they can do that with either cards or transfers.
And the incentive for the Retailer to push this? Every inflow and outflow from that account helps him to create the required data trail through which he can get the credit line with which he can start his 2nd shop or buy more inventory. An unending hamster wheel of growth..
In conclusion
Embedded finance solutions are ready for deployment within days and do not require building from scratch. OnePipe makes it possible for non-financial institutions like FMCG manufacturers and distributors, to offer financial services without becoming fully-fledged providers.
From facilitating credit to offering investment possibilities, each possibility is in itself a full-time job, with requirements varying from tech to operations, regulation, dealing with things like fraud, compliance etc, yet, possible to offer as a single suite through embedded finance. The experiences for customers keep them integral in the supply chain and implementing FMCG expands revenue without ‘investing heavily in the tech to achieve this. What is there not to love about embedded finance?
Ope Adeoye is the Chief Plumber of OnePipe
Ever wondered where to find trendy fashion, cutting-edge tech, or stylish home decor at unbeatable prices? Look no further than Temu.
What is Temu?
Temu, an online marketplace sensation, has taken the world by storm with its vast array of products, competitive prices, and user-friendly platform.
Since its 2022 launch, it has quickly become a global sensation, boasting hundreds of millions of downloads and catering to over 80 markets. Now, Nigerian shoppers can experience the Temu magic firsthand.
This guide will walk you through the Temu shopping experience, ensuring a smooth journey from product discovery to delivery.
Step 1: CREATE AN ACCOUNT TO UNLOCK SMART SHOPPING
The registration process
Joining Temu is super easy! Whether you prefer the traditional approach or the convenience of social media, Temu has you covered. For the classic signup, simply visit temu.com or download the mobile app, enter your email or phone number, create a strong password, and confirm your details. It’s as easy as that!
For social media savvy, link your Google, Apple, or Facebook account and skip the hassle of creating a new login. With Temu’s streamlined process, you can spend less time logging in and more time exploring the incredible deals awaiting you.
Mobile app vs. desktop: Which platform offers the best shopping experience?
Both the mobile app and desktop website offer a seamless shopping experience. However, for a truly dynamic and interactive shopping journey, we recommend the mobile app. You will enjoy real-time price alerts, exclusive mobile deals, and easy order tracking.
For a more deliberate shopping experience, the desktop website is the perfect choice. With larger screens and easy-to-use comparison features, you can take your time and make informed decisions.
Step 2: BROWSING AND SHOPPING LIKE A PRO
Navigating Temu’s vast selection
Temu offers a vast selection of over 200 product categories, from fashion and tech to home goods and beauty.
To get started, simply use the search bar function to find specific items or explore categories, and refine your search with filters for price, colour, size, and more. Sort items by relevance, price, or newest arrivals to find the perfect products.
Temu’s ranking system highlights popular and trusted products, often based on customer reviews and sales trends. To make informed choices, compare prices, features, and reviews before purchasing.
Best-selling products
Temu’s best-selling products are constantly updated based on real-time sales data.
Other metrics beyond rankings
Temu goes beyond traditional product rankings, focusing on the performance and quality of its providers. By considering factors like historic ratings, repurchase records, follower numbers, and new product releases, consumers can make informed decisions. This approach not only empowers buyers but also incentivises providers to deliver high-quality, diverse products and build strong customer relationships.
Providers can earn recognition directly on their product pages by ranking highly in categories like Top Sales, Top Rated, Top Repurchased, Top Followed, or New Arrival. These rankings are based on the provider’s performance over the past 30 days and are updated daily to ensure the most current information is displayed to consumers.
Finding your perfect fit
Temu provides detailed size guides to help shoppers find the perfect fit, particularly for clothing and accessories. These guides often include measurements, comparison charts, and sometimes even virtual fitting tools to make your online shopping experience seamless.
Save more, shop smart
Simplify your shopping and maximise your savings with Temu. All discounts are displayed directly on product pages. For the best deals, explore the platform’s Lightning Deals. To ensure satisfaction, pay attention to details, read descriptions, verify measurements, understand features, and consult seller ratings and reviews.
Step 3: PLACING AN ORDER
Shopping safely and securely
Temu offers a variety of payment methods, including popular credit cards and digital wallets like Visa, Mastercard, American Express, Maestro, Discover, JCB and Diners Club. To prioritise your security, the platform employs advanced security measures, adhering to strict industry standards to protect your information.
Step 4: FAST AND RELIABLE DELIVERY
Hassle-free delivery, every time
Temu prioritises customer satisfaction by providing real-time order tracking and reliable shipping options, including free standard shipping and express delivery. The platform guarantees on-time delivery and offers full refunds for damaged or undelivered orders.
At the moment, Temu is in partnership with local logistics firms, such as Flyt Express, SKYNET, and Speedaf to make delivery to Nigerian shoppers on time.
Step 5: AFTER-SALES SERVICE – BEYOND THE PURCHASE
Returns and exchanges made easy
Temu provides a seamless return process with its Purchase Protection Program. If you’re unsatisfied with a purchase, log into your account, select the item, provide a reason, and submit a return request. Temu will provide a prepaid shipping label.
You have a 90-day return window for most items. Once processed, you can choose a refund to Temu credit or original payment. For exchanges, return the item and place a new order. Temu also offers refund policies for no updates and no deliveries. Check Temu’s specific return policy for the latest information.
Beyond shopping: A greener future
Temu is committed to sustainability. By shopping on Temu, you contribute to a greener future. The platform’s Tree Planting Program and combined shipping initiatives help reduce environmental impact.
Smart shopping simplified
Temu has transformed online shopping, offering a wide range of affordable products and a user-friendly experience.
Follow these simple steps to easily navigate the platform and discover your next favourite find. If you need assistance, Temu’s customer support team is available 24/7.
So, shop with confidence on Temu!
By Jerome-Mario Utomi
Some persons are born as a special breed of humans. Chiedu Ebie, Chairman of the Governing Board of the Niger Delta Development Commission (NDDC) is one of such persons.
In fact, at 55, Ebie encapsulates Menachem Mendel Schneerson’s postulation about people born as a special breed. Schneerson: “Because time itself is like a spiral, something special happens on your birthday each year: The same energy that God invested in you at birth is present once again.”.
When you look at Ebie’s career trajectory, his exhilarating performances in all the public offices he has held, his contributions to making Delta State a dream state for Deltans, and his current efforts to saturate the Niger Delta region with socio-economic, infrastructural, and human capital development as NDDC chairman, you won’t but agree that he indeed, as submitted by Menachem Mendel Schneerson, belongs to a rare breed of humans. Born January 2, 1970, Ebie’s birthday is a huge celebration of excellence.
Though he wears no airs and does not sound his own trumpet, anyone who encounters him will readily see in him a personality whose life is characterised by remarkable, legendary, and exemplary feats.
A thoroughbred attorney and oil and gas exploration executive, before his appointment as NDDC Board Chairman in November 2023, Ebie had served as Delta State Commissioner for Basic and Secondary Education and later, Secretary to the State Government.
Private and public sector stakeholders share common, refreshing commentaries about Ebie’s eventful and impactful 55 years on earth and his salutary accomplishments.
The common denominator, however, is that this “birthday boy,” this illustrious son of the Ika ancient kingdom who had contributed immensely to the realisation of the Smart and Stronger Delta agenda of the Governor Ifeanyi Okowa administration”, is worthy of commendation, emulation, and celebration as he turns 55 today.
Late American President John Quincy Adams was probably talking about Ebie when he argued that “If your actions inspire others to dream more, learn more, do more, and become more, you are a leader.” Indeed, in Ebie, you see a man whose knack for hard work, honesty, integrity, purposefulness, and excellence has been a source of inspiration to his subordinates and admirers.
His amiable and genial attributes, his traits of transparency and rock-solid integrity, as well as his goal-orientated nature, are arguably traceable to his grandfather, who was the first ordained reverend of the Anglican Church in the Ika nation, and whose two sons later became ordained reverend gentlemen themselves.
As Commissioner for Basic and Secondary Education from 2015-2019, for instance, Ebie achieved unprecedented set goals, which included the massive renovation and rehabilitation of schools and the revamping of grassroots sports through the Zenith Bank Delta Principal’s and Headmaster’s Cup.
In 2019, he achieved a record-breaking and, of course, the transparent recruitment of 1,000 teachers, posted across secondary schools in the state. This merit-based and high-level transparency recruitment exercise made it possible for most of the beneficiaries to scale through without knowing anyone in the ministry or government.
In recognition of his rare attributes, then Governor Okowa made the following elegant statement about Ebie during his inauguration as SSG: “Mr Ebie is a fine gentleman who served meritoriously as Commissioner for Basic and Secondary Education in the first tenure of his administration. His civility, analytical intelligence, communication skills, and diligence are essential qualities needed for the office of the SSG.
In addition to these, modern statecraft, with all its complexities and challenges, requires team players, proactive leaders, and men with a large appetite for work. Mr Ebie meets these criteria, and I am convinced that he is well equipped to enrich the social, political, and economic narrative of our dear state.”
In just one year as NDDC Board Chairman, the Board under his leadership has turned not just the Commission round for the better but also the entire Niger Delta region through purposeful and result-orientated superintendence.
Today is not just Ebie’s birthday but also the dawn of a new year for him, the beginning of another cycle of 365 days of rendering quality, humane, deliberate, intentional, and transformational service to Nigeria and the people of the Niger Delta in particular.
Happy birthday, sir!
Utomi, a media specialist, writes from Lagos, Nigeria. He can be reached via [email protected]/08032725374.
Feature/OPED
Kaolin Mining in Nigeria and Processing into Pharmaceutical Grade Kaolin with Export Potential
By Anaekwe Everistus Nnamdi
Kaolin, a versatile and valuable industrial mineral, holds significant promise for Nigeria’s mining and industrial sectors. Its wide-ranging applications, especially in the pharmaceutical industry, present an untapped potential for mining and processing into pharmaceutical-grade material for both local use and export.
Kaolin, or china clay, is a soft, white clay primarily composed of kaolinite. It finds applications in ceramics, paper, paint, rubber, and plastics. In the pharmaceutical industry, it serves as an excipient, binder, and coating agent for tablets, underscoring its economic significance. Pharmaceutical-grade kaolin is a premium product, requiring high purity levels and strict processing standards.
Nigeria boasts substantial kaolin deposits in states like Adamawa, Katsina, Ogun, Ondo, and Ekiti, with reserves exceeding two billion metric tons. Despite this abundance, the potential of kaolin mining and processing remains underutilized due to limited investment, inadequate infrastructure, and technological challenges.
The local demand for kaolin, particularly in pharmaceuticals and cosmetics, is on the rise. As Nigeria’s pharmaceutical sector grows, fueled by an increasing population and higher prevalence of chronic diseases, the need for high-quality pharmaceutical excipients like kaolin is set to surge. Beyond pharmaceuticals, kaolin is essential in toothpaste, cosmetics, and agrochemicals, further diversifying its domestic applications.
Globally, the kaolin market was valued at USD 3.09 billion in 2022 and is projected to reach USD 4.90 billion by 2030, growing at a compound annual growth rate (CAGR) of 4.59% from 2023 to 2030. The rising demand across industries such as paper, ceramics, paints, and rubber drives this growth. Construction activities worldwide also contribute to the expanding market, aligning with the growing global population’s needs.
Pharmaceutical-grade kaolin represents a niche yet high-value segment of this market. Major importers include the United States, Germany, Japan, and South Korea, where stringent regulations require high-quality raw materials.
Nigeria’s strategic location and trade agreements with African and international partners position it as a potential supplier. Investments in mining and processing infrastructure could enable Nigeria to compete globally, leveraging its vast reserves and cost advantages.
Trends in the Kaolin Market
Increased Demand for High-Purity Kaolin: The pharmaceutical and cosmetic industries are driving the need for ultra-fine, high-purity kaolin that meets regulatory standards.
Sustainability in Mining: Emphasis is growing on sustainable practices, minimizing environmental impact, and benefiting local communities.
Technological Advancements: Innovations in processing technology improve beneficiation efficiency, meeting stringent global standards.
Local Value Addition: Many governments encourage local processing industries to reduce reliance on raw material exports.
Processing pharmaceutical-grade kaolin involves a series of meticulously controlled stages. The first step is mining and beneficiation, which includes extracting kaolin and removing impurities through processes such as washing, sieving, and magnetic separation.
Next, calcination is employed to heat the kaolin, removing moisture and enhancing its chemical and physical properties.
This is followed by grinding and micronizing, a critical phase where the kaolin is refined to achieve the ultra-fine particle size required for pharmaceutical applications.
Finally, quality testing is conducted to ensure the product meets stringent international pharmacopoeia standards, guaranteeing its suitability for high-value uses.
Modern processing plants in Nigeria could significantly boost the local value chain, create jobs, and reduce dependency on imported pharmaceutical-grade kaolin.
The Nigerian mining sector operates under the Minerals and Mining Act of 2007, which provides the legal framework for activities. Key provisions include:
Licensing: Companies require licenses, such as Exploration Licenses, Mining Leases, and Small-Scale Mining Leases.
Environmental Compliance: Operations must adhere to environmental regulations, including conducting Environmental Impact Assessments (EIAs).
Community Engagement: Companies must engage host communities and deliver socio-economic benefits.
Additionally, the National Agency for Food and Drug Administration and Control (NAFDAC) oversees pharmaceutical product quality, including raw materials like kaolin. Compliance with NAFDAC standards is crucial for local producers targeting the pharmaceutical market.
Kaolin mining and processing offer Nigeria an opportunity to diversify its economy, reduce import dependency, and boost foreign exchange earnings. Investments in infrastructure, technology, and regulatory compliance can unlock the full potential of Nigeria’s kaolin reserves.
As global demand for high-purity kaolin rises, particularly in the pharmaceutical sector, Nigeria’s strategic position and abundant resources make it a key player in the industry’s future.
Anaekwe Everistus Nnamdi is the founder and Market Research Analyst of Foraminifera Market Research Limited, Lagos and can be reached via [email protected] or +234 8033782777
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