In this part of the Sahara, where small businesses are the lifeblood of the economy, access to credit remains the largest hurdle faced by small businesses. Although small businesses employ one out of every 10 Africans, they are cash-strapped due to tedious creditworthiness processes, coupled with general mistrust in the traditional fiat system. This ability to access financing puts them at risk as 80% of small and medium businesses fail before their fifth consecutive anniversary in Nigeria, for example.

While working as the Chief Business Officer of the premier cryptocurrency exchange Yellow Card, Munachi Ogueke, the CEO of OneLiquidity, saw a disproportionate focus on retail customers, while businesses and institutions suffered. “When we started Yellow Card and {we} were looking for a liquidity provider on the continent, we couldn't find any. So, at the end of the day, it was a problem that nobody wanted to solve,” Ogueke told NODO in an interview. Witnessing the importance of liquidity for businesses and institutions, Ogueke started working on a solution to flush them with much-needed funding. “I felt like the institutional space in Africa was not being handled properly. No one was trying to create efficient markets for businesses. Everyone was more focused on retail,” he said. “So that's when I decided to build a platform that will help institutional players, be it companies or anyone that is looking for institutional-size liquidity to be able to play in the market.”

According to the International Finance Corporation (IFC), 65 million firms, or 40% of formal micro, small, and medium enterprises (MSMEs) in developing countries have an unmet financing need of $5.2 trillion every year, which is equivalent to 1.4 times the current level of the global MSME lending. The absence of high-level institutional players that could meet these financing needs in Africa conceived OneLiquidity, Ogueke said. Access to liquidity, which is the speed and ease with which businesses can access cash whose market value is static, is a big problem, in light of weak currencies and a shortage of foreign exchange (FX). According to the founder, as businesses start on the continent, they require access to liquidity providers who can regularly provide them with optimal pricing. “The problem is, it's hard for you to find a local African company that provides this infrastructure,” he said. Furthermore, the weak African currencies have made it difficult for these businesses to source liquidity at favourable rates, preventing them from hedging positions and being unable to provide optimal pricing for their customers, Ogueke said. It’s difficult for African businesses to access many financial products as even banks do not provide these financial services on a meaningful scale, he added.

Liquidity-as-a-service startups are springing up across the continent and some of them include Ghanaian PAL, Kenyan Durrafx, and Nigerian Vella Finance.

Meeting businesses at the point of their needs

In 2022, Munachi launched Oneliquidity alongside co-founder Amaechi Osazuwa and came out of stealth in September 2023 to provide African businesses with crypto and fiat liquidity and technology infrastructure to collect payment from customers. OneLiquidity has expressed a commitment to startups to take care of their technology, liquidity, and compliance needs while they focus on innovating, acquiring customers, and scaling their businesses. With simple integration using its API, businesses can roll out digital wallets to their customers, collect crypto from them, or process cards.

OneLiquidity offers a comprehensive range of API tools that cater to the essential requirements of fintech and crypto exchanges, ensuring smooth operation across all areas of need. And it has enjoyed raved reviews from startups it serves. According to fintech startup WeWire’s CEO Ebenezer Ghanney, OneLiquidity has helped transform the management of crypto assets in their custody. Among OneLiquidity’s customers are Nigerian crypto startups, Obiex and Busha.

Supporting businesses is essential for a country’s economy as it generates job opportunities, increases taxable income and entities, and attracts foreign investors to the country, ultimately leading to economic prosperity. Offering businesses access to liquidity streamlines their operations, enhances their ability to retain customers efficiently, and enables them to prioritize other vital activities such as enhancing profitability. This support helps safeguard businesses from financial insufficiencies and prevents them from succumbing to failure due to a lack of funding.

OneLiquidity sources non-volatile FX from its financial partners across multiple jurisdictions for businesses in need of long-term payments to customers, allowing them to avoid the risks of volatile exchange rates while having access to the best pricing solutions as desired. On regular occasions, it collaborates with other liquidity providers to develop financial products and services that address the specific needs of businesses. A typical process involves market analysis, working closely with a select few partners, creating a tailor-made product, and integrating it for its client. These financial products can be quite intricate, but they encompass various aspects such as sourcing for FX, executing FC trades, hedging positions in different jurisdictions, and determining the best pricing by looking at the buy and sell side of the market. By bringing together buyers and sellers in different trade scenarios, such as importers and exporters, OneLiquidity facilitates the smooth exchange of currency and goods. This not only enhances the overall market efficiency but also allows institutions to scale their operations effectively, always at the best possible prices.

Africa trades in some of the most volatile currencies in the world, a situation that has made it imperative for businesses to seek stable foreign currencies at cheaper exchange rates and the ability to lock value. Between January and October 2023, the Nigerian naira declined more than 50%, making it one of the steepest declines of any currency in the world this year. In 2022, it was Ghana that took the crown, when it declined by more than 55% during the same period and ranked as one of the worst declines globally.

Additionally, OneLiquidity’s solution is a viable tool for cross-border payments. It assists African businesses in making payments to their suppliers overseas and engages in invoice financing from anywhere across the world. This saves them the stress, Ogueke said, instead of creating their tech stack to process payment seamlessly. Ogueke believes that Oneliquidity solutions would be helpful for giant crypto companies and Layer 1s expanding to the continent. According to Ogueke, when such companies seek expansion they require local infrastructure, partnerships to provide them with financing in stable local currencies, and appropriate licensing. “For international companies that are looking to come into the continent, we provide them with all the necessary API tools so that they can integrate them into their solutions and roll out a white-label solution that can be used to enter the market,” he said. “The advantage of working with us is that our licensing allows them to operate in the local jurisdiction without the need to establish a separate entity.”

Ease of doing business is a snag for making international businesses interested in setting up shop on the continent, by providing these much-needed infrastructure and services, the coffers of host countries benefit.

Using crypto to provide liquidity

OneLiquidity offers an API-based crypto-as-a-service product that integrates with businesses and allows them to collect payments using crypto across the globe. Over recent years, in Africa, where cross-border payment is expensive and tedious, cryptocurrency has proven to be a silver bullet for paying across borders and jurisdictions. Many liquidity providers on the continent prefer cryptocurrency because it is easy to source and allows them to seamlessly move money across jurisdictions with different currencies and diverse financial rules.

"We believe in the future of crypto on the continent and in the world generally and with the regulatory process coming in, crypto is becoming a more regulated product. We provide regulatory compliance and technology infrastructure for businesses that want to roll crypto into their solution," Ogueke said.

Although Ogueke revealed that OneLiquidity is currency-agnostic, OneLiquidity receives numerous requests from companies seeking to roll crypto into their solution, integrate a wallet service to collect crypto payments, convert, swap, and hedge against volatile currencies. OneLiquidity meets these needs including requests to lending collateralization with crypto, and enable payouts with crypto. “You can collect local currencies from us and you can pay out in crypto. You can collect crypto and pay it in local currencies. You can send us crypto and we pay out for you in local currencies,” he said.

As Africa reels from the aftereffects of a funding crunch, a crypto winter, and FTX and SVB’s implosion, OneLiquidity's commitment to providing liquidity as a service becomes even more crucial. By ensuring businesses have access to the liquidity they need, OneLiquidity helps them navigate through cash crunches and maintain their operations, ultimately increasing their chances of survival.