Africa’s credit infrastructure has lagged behind the rest of the world for years due to low credit coverage from its offices. According to a World Bank report, only 11% of Africans have their credit information recorded by private credit bureaus. And for those who are banked, only 17% have access to loans.
Thus, there is a real need to record credit transactions. And as financial services in Africa continue to digitize, real-time access to credit is becoming increasingly important.
Credit bureau systems in Africa need to be upgraded to address these issues, but as this is a difficult task, the infrastructure platforms that provide lending processes are positioned as market options. Indicina, one such platform based in Lagos, Nigeria, is announcing an initial round of $ 3 million.
Pan-European venture capital firm Target Global, headquartered in Berlin, topped the list, adding to its long list of investments in Nigerian startups, including Kuda, Kippa and Edukoya. The company’s partner Ricardo Schaefer will join the board of Indicina. Greycroft also participated in this round, as did RV Ventures.
As it has been established, access to credit is an integral part of the acceptance of financial services in each region. But while large corporations and high net worth individuals have no problem accessing bank loans in Nigeria, the retail and SME segments have been somewhat neglected on a large scale.
This concern was too important for Yvonne Johnson to ignore while working as a chief executive at First Bank, one of Nigeria’s largest banks in terms of assets. And as digital banking – which includes lending – began to grow in the country, she told TechCrunch that she sees an opportunity to launch Indicina in 2019 to provide credit lines and financial analysis tools for these businesses.
Thus, lenders can use Indicina for credit rating and sentiment analysis of banks, gaining access to ML-managed financial analysis and an improved view of consumers who do not currently have, and refusing unsecured loans. Another interesting angle to Indicina’s decision is that lenders who process loan applications manually can use the platform to double or triple their volume without blowing up their credit books.
“We have never had a balance. It has never been a question of offering credit to us. We want to focus on the infrastructure layer and provide good infrastructure to make people feel more comfortable, ”said CEO Johnson, who has experience in investment banking at Merrill Lynch.
“We want lenders to be better informed about credit decisions so that they can enter the market faster with their digital product. So we never had a business model that included our balance sheet, which we always worked with creditors. ”
Indicina’s unique approach to solving Africa’s credit problem is why Target Global and Greycroft are investing in the company. According to the two companies – as their partners Schaefer and Will Schkerbiak said – they supported Indicina because it uses data to solve the problem of eligibility of the loan, previously resolved by incomplete creditworthiness assessments.
Fintech partners with credit bureaus and open financial platforms. Johnson, who launched Indicina with CTO Jacob Ayokunle and chief data scientist Carlos del Carpio, said the platform has more than 120 customers, including banks, non-bank lenders and fintech companies. Some include Polaris Bank, LipaLater, VFD, Zilla and CreditDirect. According to information on Indicina’s website, it has helped these customers process more than 3 billion ~ (~ $ 5 million) in loans from 10,000 bank statements and repaid more than 700 million ₦ (~ $ 1.17 million).
The company’s revenue comes from API calls made by its customers when analyzing financial documents. The company will launch a B2C offer in the coming weeks to diversify offers and revenue streams. Although Indicina is already analyzing real-time bank statements so that lenders can make informed decisions, it is hoped that consumers will also need this information. The simplest way to describe it is a credit and financial management platform like Credit Karma.
“We work with creditors; now we want to include consumers. So they see what the lender will see if they apply for a loan, “said Johnson, who is also an angel investor after supporting Flutterwave, Eden and Thndr during the conversation.
Present in Nigeria and Kenya, this new funding will boost Indicina’s expansion into other African markets. “This will also allow the company to strengthen its key product offerings, build more consumer credit recommendation products and strengthen its infrastructure,” the company said in a statement.
Johnson stressed the importance of using the funding to get to the next iteration of Indicina machine learning and data play during the conversation. “This is the basis of what we do,” said the founder, who heads the company with team members on four continents. Funding will allow Indicina to deepen product development in this area by hiring more data scientists and machine learning engineers.