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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OKO: Insurtech Startup Raises US$1.2M to bring Innovative Insurance to Smallholder Farmers Across Africa
Insurtech start-up, OKO, that provides inclusive agricultural insurance to secure farmers’ income across Africa, has closed a seed investment of $1.2 million. The round was led by Newfund and ResiliAnce. Mercy Corps Venture, Techstars, ImpactAssets and RaSa also participated in the round.
The startup which currently operates in Mali and Uganda uses satellite data and mobile payments to create automated insurance products for farmers whose fields are affected adversely by weather events — primarily droughts and floods. With the new funding, OKO aims to strengthen its presence in Mali and Uganda and expand its offerings to more African markets, starting with Ivory Coast.
According to the founder of OKO, Simon Schwall, in a press statement said,
Simon also said they were using technology to solve this issue and secure the income of those farmers.
The company already has approximately 7,000 paying customers in Mali and compensated more than 1,000 farmers last year, who were affected by floods. OKO’s customers typically grow maize, cotton, sesame or millet. It also works with agro-industries to help them with their sustainability goals and secure their relationships with suppliers. Successful pilots were completed with ABInBev and Touton in Uganda.
This convinced Augustin Sayer, partner at Newfund, to support OKO:
“We believe recent advancement in iOT and data availability will lead to the rise of parametric insurance in Africa for the benefit of the local populations. Simon and his team have built solid bases in Mali from which OKO can now expand in new countries and offer new insurance products.”
OKO takes pride in being the most inclusive crop insurance available. All farmers need to connect to OKO is a phone (no smartphone required): they can dial a short code to obtain more information and pay through mobile money services. To achieve this level of accessibility, the company partners with mobile operators.
OKO, for Aisha Touré, the CEO of Orange Money in Mali, has taken full benefit of the Orange Money platform to provide a service that is both innovative and inclusive.
Daniel Block from Mercy Corps Ventures added,
“While other micro-insurance for farmers exist, we were impressed by OKO’s ability to partner with a pan-African operator like Orange and establish a direct consumer link, which allows for an exciting opportunity to drive deeper user engagement and expand to a suite of insurance products for rural farmers in the future.”
The service offered by OKO is supported by regulators and has won both the Fintech Showcase Award by the Alliance for Financial Inclusion, representing financial regulators of emerging countries, and the SME award from ITU, the telecommunication governing body.
When asked about the next challenges for OKO, Simon Schwall’s answer is clear:
“We need to find more partners who can bring our product to farmers, be it NGOs, agro-industrial players, mobile operators or governmental programmes. We proved that our solution is working and answers a strong need. Now we need to scale”
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