Integrated financial solutions in less developed markers are becoming more prominent as platforms try to offer various financial solutions to the unbanked and underserved. Banking infrastructure providers are primarily responsible for the proliferation of this type of solution. They allow companies such as mobile phone operators, e-commerce platforms, and logistics companies to integrate and enable banking products for their customers.
believable, a startup in this category that provides its clients with the technology stack, scoring capabilities and banking partners, has obtained a seed round of 2,5 million dollars. It follows the integrated finance platform pre-seed round secured in early 2021 and led by The Continent Venture Partners (TCVP).
Last May, Credable officially launched with two products: a 30-day loan product in partnership with Vodacom M-Pesa in Tanzania and a short-term loan product for Diamond Trust Bank in Kenya. Since then, the fintech has enabled more than six products for various businesses, from banks and mobile network operators to e-commerce platforms and fintech players in three markets: Tanzania, Kenya and Uganda. Until now, more than 1,2 million people have opened accounts on its platform and more than 200.000 customers (including consumers and SMEs) have used its banking products. These include savings products, term loans, overdrafts, asset financing and other credit solutions. Credable's platform has helped disburse $5 million worth of loans and received more than $3 million worth of deposits into its savings products, according to a statement shared by the startup.
Nadeem Juma, CEO of the startup, said that the integrated financial platform, which wants to become the "Emerging Markets Unit", is looking to expand its offering to large markets where the regulatory environment is conducive and companies with profitable channels in the entire Middle East and West Africa region: Pakistan and Nigeria top that list. With this new funding, Credable plans to launch four more products this year and partner with companies in these countries..
“The problem we are trying to solve is that a huge population of underbanked customers need banking services to improve their livelihoods. They are found in different channels that they use on a daily basis, such as mobile money led by telcos, e-commerce platforms and gig economy apps”, explains the CEO who founded the startup together with Jad Abbas y Michael Tarimo. "Rather than trying to create a new channel to bank these customers, our goal is to enable these channels through a B2B2C offering that provides customers with the banking services they need on the channels they are already on."
Fintechs that offer banking-as-a-service in the US and Europe, such as Unit, Rapyd and Treasury Prime, have achieved significant scale thanks to the developed banking systems they enjoy in their markets. Their peers, including bigger players like Flutterwave, JUMO and Migo and smaller ones like Maplerad, Bloc, OnePipe and Anchor, want to replicate this growth in less advanced banking systems in Africa and other emerging markets.
“If we think about a market like the US, we have banks and companies that have done this before, and companies that are very familiar with the model. So getting it up and running is a simple process,” explains Abbas, CFO, who before co-founding Credable was a director at venture capital firm Actis. “But in our markets we haven't gotten to that point yet, because we have a large underbanked population to start with. And that's what we're doing, building that capacity to get there, which today means a lot of different things where Credable takes the lead when it comes to launching new digital banking products.”
According to the executives, these capabilities set Dubai-based Credable apart from other platforms in what is becoming a crowded space. In addition to the technology stack and alternative credit scoring capabilities, Juma said the startup "walks" its enterprise clients through the design, development and management of the product and works with them to ensure the product is relevant to their customers. final consumers. Credable also offers a comprehensive solution with no exposure to credit risk by partnering with balance sheet providers (usually second-tier financial institutions that have difficulty accessing new clients because they lack relationships with technology companies).
This two-year-old fintech company employs a revenue-sharing model with all of its partners to "keep them invested and create some level playing field." Credable also hopes to address a bad financial practice with this model: predatory microlending, which often involves imposing unfair and deceptive loan conditions on end consumers.. The bad actors, who gain additional income through this tactic, take advantage of poor credit history or little or no access to credit in emerging markets. The fintech startup believes its revenue-sharing model, rather than the usual cost-per-service model, can help keep rates as low as possible and create access to affordable capital for consumers and businesses.
Pan-African venture capital firm Ventures Platform led the round, with participation from Launch Africa, MAGIC Fund, ACASIA Ventures, AAIC Investment, Adaverse/Emurgo Africa and other strategic angel investors. Dotun Olowoporoku, General Partner at Ventures Platform, said the company believes that Credable's platform, which enables companies to provide financial services to previously excluded market segments, will create a wheel of momentum that will drive economic growth in emerging markets. .
“In the last ten years we have seen the emergence of fintech and mobile money on the continent, and people have been trying to solve the question of financial inclusion: How to empower these clients who are not in the formal sector with products credit or savings?», said Juma, who, for most of his professional experience, has worked in fintech and companies that provide business solutions to the telecommunications and banking sectors. “We believe that nobody has really solved it, because you have to offer a comprehensive solution and take a collaborative approach with banks and companies. There is a huge opportunity to create impact at scale through a model that helps solve the problem at scale, rather than creating new channels and acquiring customers individually.”
