Since 2015, Fido has extended credit to thousands of customers over mobile phones, and the company is now looking for more growth opportunities.
It is planning to add savings and payment products to its portfolio later this year, and to enter Uganda, its second market, as it prepares to expand to more regions across the Africa. The second research and development center will be located in the capital of the West African nation of Ghana and will help automate most of its operations.
Plans come against the backdrop of a $30 million equity investment and some undisclosed debt funding that the startup has just raised in a Series A round led by an Israel-based private equity fund. The equity investment has been raised to $38 million so far.
We see an opportunity to offer these customers, who are outside banking systems, savings products that are fully-digital and very easy.
Customers will be able to deposit from mobile money, cards and even cash, and we get attractive returns on those savings. Eitan said that they wanted to create interoperability between all the different payment rails that are popping up in different countries.
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Fido gives mobile loans of up to $250 to individuals and small businesses. The loans can be repaid through single or multiple installments.
According to Eitan, it is easy for customers to register for a Fido account.
To register, customers need to upload their headshots and copies of their identity cards, which are then checked against existing databases, as well as uploading their photo. The multi-step verification prevents fraud, according to Eitan.
He said that the fintech uses credit- scoring technologies to determine how much it can lend.
We have been able to find a solution to the default rates. Our results are second to none in the region. We have a low single digit default rate. We deliver new machine learning models in space so we are able to do that. We currently operate more than three models on the risk side, and will soon release a fourth. We have models for fraud as well.
Over 350,000 customers have been given loans by the fintech in the country. It will grow as it enters other markets in Africa.
We understand the regulation in Uganda in ways that are very similar to the regulation inGhana. It is a very large market in terms of population size and penetration of mobile. It is important for us to go to a market that is mature because it will help us deliver our services instantly.
Fido is backed by a team of 65 employees who use ethical approaches to follow up on late repayments.
Fortissimo Capital partner, Yochai Hacohen, said in a statement, "We are truly impressed by the team's ability to underwrite people immediately while delivering sustainable economics." They are different from the others in the space.
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