Kippa's Troubles Unfold
In a recent turn of events, Nigerian fintech startup Kippa finds itself in the midst of a financial setback. Reportedly, the company has incurred a loss of ₦30 million due to internal fraud linked to its now-defunct agency banking product, Kippa Pay. This revelation sheds light on a series of events that unfolded over the past months, tarnishing the company's reputation.
The Rise and Fall of Kippa Pay
Kippa Pay, an agency banking product by Kippa, ceased operations in November 2023. The decision came two months after the company had announced a reduction in its headcount. However, the aftermath of this move unearthed a fraudulent scheme that had gone undetected within the company for at least four months.
Uncovering Fraud During a Rush
The fraudulent activities within Kippa came to the forefront during a surge in customer withdrawals triggered by the closure of Kippa Pay. It was in the midst of this rush that the company discovered a senior manager, whose identity remains undisclosed for legal reasons, engaging in large-sum withdrawals without utilizing a Point of Sale (PoS) system.
The Legal Consequences
As a result of the internal investigation, the manager was arrested in November 2023, with ₦30 million uncovered in one of his accounts. However, despite the initial arrest, the manager has since been released, leaving legal implications and questions surrounding the case.
Controversy Over Severance Packages
Adding another layer of controversy to the situation, Kippa faces backlash for its decision to withhold promised severance packages for the employees affected by the headcount reduction. The company had initially committed to providing severance pay equal to one month's net salary for the laid-off employees. However, as revealed, Kippa has not honored this commitment, leading to discontent among the affected individuals.
Closure of Kippa Pay and Justifications
The company's decision to shut down Kippa Pay was initially attributed to issues with over 500,000 small businesses on its platform and the depreciation of the Naira, among other reasons. However, the subsequent events, including the internal fraud and the failure to fulfill severance commitments, have cast a shadow over Kippa's handling of the situation.
In the aftermath of these revelations, Kippa faces not only financial repercussions but also challenges in rebuilding trust and credibility within its workforce and the broader fintech community. As the company navigates through these setbacks, the unfolding saga serves as a cautionary tale for other players in the industry.