Kenya-based financial technology (FinTech) firm Pezesha has won first place at the 2020 AFI Inclusive FinTech Showcase, after impressing AFI members and our panel of expert judges with an online pitch on how their solution is leading innovation in financial inclusion.
Pezesha, translated as “financial empowerment” from Kenyan Swahili, provides a digital platform where micro, small and medium-sized enterprises (MSMEs) can tap into finance after being matched with investors – including banks, microfinance institutions and other retail lenders – seeking to foster productivity and growth among small businesses.
Hilda Moraa, Pezesha’s founder and chief executive officer, connected via live feed to spotlight her company’s work in helping MSMEs across sub-Saharan Africa reach vital capital needed to grow their businesses.
“We are tackling the USD328 billion financing gap for MSMEs across sub-Saharan Africa … and the more than 50 million businesses that have been excluded and underserved,” she said.
Focusing on underserved markets in Sub-Saharan Africa, Pezesha, the competition’s second winner uses alternative transactional data from suppliers and partners to produce credit scores that give them access to credit for purchasing additional inventory. This is financed by investors using algorithms that aim to diversify risk by enabling lending to more secure small businesses.
Last year’s inaugural showcase event was won by OKO, which provides agricultural insurance to smallholder farmers in Mali.
“Everyone benefits in our value chain ecosystem: lenders can optimize their capital; suppliers can increase their network of merchants; and merchants can grow their inventory,” Moraa told the panel.
MSMEs can also use the platform, she explained, to learn about ways to increase their credit score by transacting through digital platforms and creating a digital presence. Its tools, she added, improve the knowledge and skills of customers by educating them on how to increase cash flows and safely expand their business.
Pezesha’s work also has strong links to several key AFI themes, having created a customer base that 80 percent youth and 60 percent women. According to Moraa, Pezesha has connected more than 20,000 youth MSMEs with working capital, leading to the creation of more than 1,000 formal sector jobs and 5,000 informal sector jobs.
Since its launch in 2017, Moraa said that the Pezesha has funded more than 75,000 loans to MSMEs, educated more than 200,000 MSMEs and disbursed more than USD2 million across Kenya.
Pezesha has also partnered with companies such as Google, PesaPoint, Mastercard and Letshego to expand its reach, including to groups frequently excluded groups, such as persons with disabilities and victims of gender-based violence.
Moraa hopes that strategic collaboration will help address the challenges of harmonization and that by speaking the AFI network, she will learn about ways forward on a regional and global level, as well as contribute her own experiences in going through sandbox processes and expanding her business into other countries.
Watch Pezesha’s winning pitch here!
Second place in this year’s competition went to Idemia, a France-based multinational technology company, which uses digital identification to aid in the enrolment and disbursal of funds, including government subsidies to low-income and vulnerable population. Its platform captures biometric data – facial and fingerprint identity – to create digital identities that can be used to access a range of financial services, including branchless banking.
Arifu, a Kenya-based social enterprise, came in third with its smart personal learning assistant and content marketplace that offers advice and financial skills training to vulnerable groups, including farmers, youth, women and MSMEs, through mobile phones. Users of both smart and feature phone can learn via SMS, WhatsApp and Facebook Messenger to develop new skills, discover products and services and earn rewards. According to the company, more than 1.5 million people have accessed Arifu’s services.
First, second and third placed finalists will be invited to participate in select activities of AFI’s Public-Private Dialogue platform and be awarded a one-year membership to Luxembourg House of Financial Technology (LHoFT), which provides practical training, education and research services for the FinTech community.
Congratulations to our top three finalists!
Below is a list of the remaining FinTech finalists (listed in alphabetical order):
Founded in 2013, Beyonic provides small and medium-sized enterprises (SMEs) and other organizations with a digital payments toolbox that provides an alternative to cash payments. It promotes business continuity and sustainable growth through remote payment and collection functionality in over nine markets in Africa through a range of last-mile delivery channels that include unstructured supplementary service data for feature phones and open application programming interfaces for apps.
Circulo de Credito
Circulo de Credito, a registered credit bureau in Mexico and Peru, empowers lending companies to reach markets that are not traditionally included for financial services. Recently, it created advanced analytic models to help lenders personalize lending solutions depending on a consumer’s financial maturity profile, a score that extends family-level credit behavior to include typically financially-excluded women as well as digital and legal biometric signatures to help disadvantaged groups sign up for loans through their phones.
cLabs is the team that developed Celo, an open blockchain platform that facilitates access to financial tools to mobile phone users. Its digital currency, the Celo Dollar stablecoin, can be sent to any phone number and aims to be accessible to all. Among the use cases developed on the Celo platform, Earn focuses on matching micro-work with integrated micro-payments.
One of the last year’s FinTech showcase finalists, KlickEx offers payments infrastructure focused on reducing settlement risks for central banks and providing cross-border transfer services dedicated to financial inclusion. Launched in 2009, the platform targets the formalization of remittances and informal development flows in the Pacific region, focusing on mobile money systems for the unbanked and retail sector services, including compliance.
Mosabi’s platform blends FinTech and education technology with artificial intelligence-driven business and life skills electronic learning for underserved citizens and micro, small and medium-sized enterprises in emerging markets. Through gamified lessons and unique journeys, users can learn about managing their business and money. Mosabi also connects users with relevant partner financial providers and platforms.
MyCash Online is a Malaysia-based e-market that provides online services for migrants, including the purchasing of bus tickets, airline tickets, mobile top-ups and international reload or bill payments.
People’s Pension Trust
People’s Pension Trust, another of 2019’s finalists, provides pension products to people working in the formal and informal sector with the aim of reducing old-age poverty across Africa. A subsidiary of the Netherlands-based People’s Pension Holding, its goal is to provide affordable pension products to four million people in the informal sector by 2027.
Proto‘s conversational artificial intelligence solution automates consumer protection for central banks and financial supervisory authorities across Southeast Asia and Africa. Proto, another of last year’s finalists, aims to overcome the manual limitations of complaints processing and financial misconduct monitoring. It uses SMS and social messaging apps to provide channels for bottom-of-the-pyramid consumers.
From its operations hub in Jordan, Tanda offers access to alternative financial solutions through the introduction of online savings clubs via a mobile application. Tanda works with payment service providers to enable the transfer of payments electronically.
All 12 finalists will be featured in a special AFI report highlighting how their solutions contribute to financial inclusion and COVID-19 response, which will be disseminated across the AFI network, the wider financial inclusion community and beyond. Furthermore, they will be invited to a special dialogue session with AFI members hosting the Pacific Regional Regulatory Sandbox, the world’s first regional sandbox, and have access to a mentoring and training on pitching to investors and presenting business models provided by LHoFT.
The event is an initiative under the 2018 Sochi Accord, in which AFI’s membership committed to “create and participate in platforms for systemic dialogue and partnership among regulators and policymakers with FinTech companies and technology providers”.
It is supported through AFI’s Multi-Donor Financial Inclusion Policy Implementation Facility, with participation of French Development Agency (AFD), the German Federal Ministry of Economic Cooperation and Development (BMZ) and the Ministry of Finance of the Grand Duchy of Luxembourg.
Watch all the finalists pitch their innovative solutions here!