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Current Thrive Agric Episode Exposes Customer Education Problem of Nigerian Agritech/Fintech Startups

Tochukwu Egesi
Tochukwu Egesi

It’s has become common knowledge that Thrive Agric is currently facing operational issues which have culminated in its inability to meet up with due payments to subscribers who had invested in its crop and poultry farms.

According to Thrive Agric, the economic/logistical impact of the COVID-19 pandemic — caused by stringent restrictions — has been devastating to its business.

Consequently, it is currently unable to make payouts to subscribers, many of whom are irked by having to wait way past their due date to receive the due payout on their investment.

“I thought them (Thrive Agric) being insured meant that I would get my money no matter what,” a Thrive Agric subscriber, Val said.

Of course, Val thought wrong, but whose fault is it? Him for drawing his own conclusions? Or the company for not educating him enough while knowingly or unknowingly using the insurance bit as a selling point?

A screenshot of a section of the Thrive Agric website

And while it’s unlikely that any startup as reputable as Thrive Agric would intend to deceive its clients, in this era when tech is democratising and commoditising all kinds of investments (including U.S. stocks), there are not many investors who would not see the “insured by” as a sign that their funds are secured by insurance.

In fact, a statement on the Thrive Agric website reads thus: “To make sure your funds are fully secured, our farms and farming activities have comprehensive insurance covers by Leadway Assurance.”

To many subscribers, that came off as insurance cover on their investment in the agritech. But that was before the pressure of the situation led the insurance company, Leadway Assurance, to issue a disclaimer stating that it only insures the farms, and not the funds of investors.

A copy of the disclaimer issued by Leadway Assurance

Therefore, as fintech and agritech investment startups gain more ground in Nigeria (there are now well over 60 of them), there is an ever-present need for better customer education, to ensure that people know exactly what they are getting into.

The Thrive Agric episode also shows that even a little ambiguity can impact people's financial decisions, with customers reasonably believing that their funds were insured, when they actually were not.

The episode similarly proves danger in using ambiguously-worded insurance bits advertently or inadvertently as a marketing gimmick, as the cards eventually fell through, unsurprisingly.

In essence, the well-established fact that the risk inherent in investing implies that investments are NOT (and cannot be) insured. What must be done, however, is educating the average Nigerian agritech/fintech customer (investor) sufficiently.

Nigeria In Focus:

Population - 206.6 million (Compared to South Africa's 59.6 million)

GDP: $504.57 billion (Compared to South Africa's $369.85 billion)

GDP Per Capita: $2,465 (Compared to South Africa's $6,193)

Opinion

Tochukwu Egesi

Financial Services Strategy & Digital Economy Specialist (Scribing in Personal Capacity)