Digital lending platforms are an easy and quick way for microenterprises and individuals who are not served by traditional banks to get credit. These platforms are crucial for many people who don’t have access to banking services. The digital lending platform market in the Middle East and Africa is expected to reach $2 billion in the next five years, growing four times since 2021.
Ghanaian fintech Fido is looking to enter new markets in East and Southern Africa by using $30 million in Series B funding. This includes $20 million from global impact investment manager BlueOrchard and Dutch entrepreneurial development bank FMO.
Fido was started in 2015 by Nadav Topolski, Tomer Edry, and Nir Zepkowitz to offer loans through mobile phones. Over time, they added more services like savings, bill payments, and smartphone financing to increase their income.
Many companies in Africa offer digital lending services, like Branch and Tala, which use mobile technology to offer quick loans to individuals and small businesses. These services are important because traditional banks often require collateral and have long processes. This makes micro-lenders like Fido, who provide loans instantly, a key source of funding for small businesses.
Fido is focused on customers in sub-Saharan Africa who have little access to financial services. They offer a variety of loan products with insurance included, and plan to introduce more insurance options for their business customers. They also help customers build a financial history so they can access credit, insurance, and other services.
Customers of Fido can borrow between $20 and $500, while businesses can borrow more based on their needs and credit score. Loans are typically repaid within six months with an interest rate between 7% and 12%, and the default rate is below 4%. This is due to the company’s credit score system, which uses artificial intelligence models.
Fido has served over a million customers, with 40% being small businesses, and has provided over $500 million in loans in countries like Ghana and Uganda. Their goal is to reach more customers and have a positive impact on their lives using the new funding.
More Stories
Google Removing Low-Quality Android Apps to Increase Engagement