In 2009, the world was introduced to blockchain technology with the launch of Bitcoin. But things were very different then. Technology was very limited, compared to what we have today. Facebook was still young and Blackberry was the only smartphone available. Access to finance was limited to banks and a few other players in the financial services sector and loan sharks. There were no fintechs or technology enabled peer lending platforms available.
If you were an entry to mid-level corporate executive, your only source of credit would most likely be the bank in which your salary account was domiciled.
When the bank that held your salary account stopped honoring loan requests from staff of your organization, then you knew there is a big problem. You were left with loan sharks.
That was the situation my colleagues and I found ourselves in 2009.
The bank that housed our salary accounts stopped honoring loan requests from our organization. The bank also put a cap on what its own staff could borrow, making it almost impossible for most junior staff to get access to reasonable credit.
If you think that salary earners were having it bad, small businesses that did not make a sizeable turnover and were not really attractive to the newly capitalized banks were getting it even worse.
This might not have been a problem for the major players in the financial industry, but it was big enough for a couple of young visionaries to build a business around.
My earliest recollection was one late night in mid-2009. We were working late as usual. It was on the 4th floor of a leading Investment banking outfit on Lagos Island. Nonso, who was a technical assistant to one of the executive directors, now CEO of VFD Group, had called me to his office, which was on the same floor as mine. They (he and a couple of friends) had been able to put together a business model around the “access to credit” problem and needed some form of identity – a logo to represent the business. I sat down in his chair, in front of his laptop, and with him and his colleague by my shoulder, quickly put something together on Microsoft word. It was a yellow and green circle overlapping each other. It was tacky but good enough.
I remember Nonso talking to me and a couple of colleagues about investing. Many of us didn’t see the vision. I remember some of the early meetings. There was no office so we used Federal Palace Hotel. Over a sandwich and soft drinks, Nonso, supported by Niyi and Bolaji would articulate the vision. They were so audacious in their goals that I can bet I was not the only person who thought they were hallucinating.
They raised capital from friends and family and started lean. Everything was limited – except their vision. They didn’t have a borrowing license in the first 3 months they started so they filled the gap by creatively structuring a lease buy back arrangement where you borrowed money based on an asset. Actually, that was the form of security they could get to de-risk the lending.
In very simple terms- You sell your car to them and buy it back gradually. In the third month, their borrowing license came through – covering only Lagos State.
They grew the business brick by brick and today, VFD has grown and has within its group, a microfinance bank, an asset management company, a real estate concern, a mortgage bank and a host of other businesses.
On April 16, 2021, BusinessDay published a story on its website – VFD Group Gets SEC Approval for Proposed N4.13bn Rights Issue.
A friend of mine sent the link to me and asked “Where them they see this money?” He couldn’t wrap his head around it. How Vbank has managed to get Donjazzy and a host of other A-list celebrities in its corner.
There was a time when the group operated without an office. There was a time when all the key players had to hold regular jobs because they couldn’t afford to do it full time. People don’t see this side of the story. They don’t want to see this side of the story. I wasn’t ready to go into history mode to school this friend. I desperately wanted to but a voice deep down inside spoke to me – Resist the need to shalaye.
I heeded the voice. My response was short. You don’t wake up and become a butterfly; growth is a process. Big Businesses start small.