The Accra based tech startup, OZÉ, reports, it has raised US$700,000 led by Anorak Ventures and Matuca Sarl. The fintech startup helps small businesses in Africa grow their operations by digitizing and providing them with access to capital.
What the fund is to be used for?
In Ghana and in most other Africa countries, access to capital for small and medium scale enterprises is a struggle. Much that the MSME credit gap in Sub-Saharan Africa is pegged at US$331 billion which means many African lenders are missing out on close to US$80 billion in annual interest income, simply because lending to these category of businesses is tough.
The challenges with small businesses in the African market
Sadly, a number still keep records on papers, they have no formal business education, not only that, one cannot find any credit history, they have weak or no collateral, and their operations are quite opaque.
OZÉ comes into the scene with its award-winning business app and proprietary credit risk algorithm, making it profitable for banks to make no-collateral loans to MSMEs.
For the co-founder and CEO of the tech company, Meghan McCormick, their OZÉ Flywheel makes it profitable for banks to lend to MSMEs. She goes on to say that,
“Using OZÉ already screens for the type of entrepreneurs banks should want to lend to and as entrepreneurs keep using OZÉ they can access more funds at a lower risk to the bank.”
What we know is that, their OZÉ Business App makes keeping financial records habit-forming in a more fun way. Remarkably, its users earn gold coins when they track sales and expenses, send digital receipts and invoices.
They also remind customers to pay what they owe, simply from their smartphones. There is a business dashboard which shows how the business is trending and have made available a business coach who is just a click away.
Since it launched its beta app in 2018, a growing number of active users and paying subscribers have recorded more than 250,000 transactions in the app with a value of more than US$50 million. OZÉ says it piloted a small loan portfolio in 2020, with no defaults and had a projected annual 43% ROI (return on investment).
Dave Emnet, a co-founder and COO, in a press release said, he was super excited about the next stage of OZÉ, adding that, they were integrating with Paystack and other PSPs (payment service providers) to allow for SMEs accept and send payments through the app as well as partner with more financial institutions to expand on the success of OZÉ’s approach to lending.
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ImaliPay: Nairobi Fintech Startup Raises Pre-Seed Funding Led By TEN13
ImaliPay, a fintech startup helping African freelancers reach their financial goals has raised an undisclosed amount in pre-seed funding from the Australian venture capitalist, TEN13, reputed for investing in top-tier start-ups.
According to ImaliPay, the primary aim of this newly raised funding is to expand and accelerate their growth and footprint in Nigeria, South Africa and Kenya to be a one-stop-shop for gig workers’ financial needs on the continent.
The backing of ImaliPay by TEN13 is on the back of recent chain of events that has elevated the visibility of Africa’s fintech startup scene.
Commenting on the deal, Managing Partner of TEN13, Stew Glenn, said,
ImaliPay in 2020 was co-founded by Zimbabwe’s Tatenda Furusa and Sanmi Akinmusire a Nigerian, who were former colleagues at the leading payments company Cellulant. The fintech company thinks the investment from the venture capital has significant benefits.
In a statement released to the press, Tatenda Furusa said,
It’s a great opportunity for investors to participate in the fintech revolution and a fast-growing segment. Our vision at ImaliPay is to advance financial health and inclusion for gig workers who struggle to manage and access flexible financial services that are often only available to traditional SMEs.
The growth in the African gig workforce is being pushed by the growth in digitization and smartphone penetration. Gig workers constitute a significant proportion of the economy within ImaliPay’s target markets and this market segment is expected to grow rapidly over the next decade.
ImaliPay offers gig workers a one-stop-shop of financial services such as the ability to seamlessly save their income and receive in-kind loans through a “buy now, pay later” model tied to their trade.
Bolt drivers in Kenya can now request a fuel loan and payback after 3-4 days, this allows them to get more work done and Safeboda riders in Nigeria can now buy on credit bike parts, fuel, and smartphones to keep their gig moving and reduce any downtime.
Other products to be offered off the platform include insurance and investment options to foster a safety net for this hard-working but vulnerable part of the population.
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