It is said that the only thing worse than bad credit is no credit. And for millions of people across Africa who are unable to get access to traditional banking or a credit rating this adage is all too true. And without credit, there can be no loans for new businesses, business growth, purchasing homes, all the things many in the developed markets take for granted.
But in 2015, something changed. A company called JUMO was founded on the belief all people should have access to banking and the opportunity to borrow.
“What JUMO does is we provide digital financial services to people who wouldn’t be reached by traditional banks. So, we work with established partners in the country like banks, financial service providers and telcos to offer our customers financial products. And that really enables them to save, to have working capital, and to build a better future for themselves and their lives. The reason that they would have access to them historically, is because of the amount of income they had wouldn’t have justified them as a customer for a traditional bank. But we use the power of our data and technology platform to make it worthwhile. So basically, it’s win, win, win.”
And in the year since, JUMO has become vital to millions of Africans and the African economy. And that’s why we at GEMCORP have been proud to support them and their mission.
“GEMCORP have been invested in the business right from the very beginning. And then in 2015 they were also cornerstone investors in JUMO’s first equity raise round. They’ve been part of the journey right since the very start, and they’ve been fantastic partners throughout.”
What makes JUMO so unique is that they are using the power of technology and mobile data to provide banking access to millions of people. Using AI and machine learning, JUMO is building accurate credit scores and targeted financial products for people who don’t have a financial record, collateral or a credit score. Their prediction engine is able to tap billions of mobile usage data points to score and price loans at a tenth of the cost of traditional channels. We see Ai as the tool that helps to adjust the product to each customer. You have to understand each customer situation and that means there’s huge bottleneck for humans to actually do that at scale and accurate enough, because a human will be much more biased than data. The other side of it is we use AI to measure or to calculate what the risk is for that specific customer and the propensity, or the possibility for that customer to actually pay us back. And that combination is very powerful because you can give the customer the best price possible and actually improve over time.
The result of this innovation is that now over 18 million customers now have access to affordable credit. Over 60% of whom had never used financial services before. And remarkably, more than 1/3 of JUMO’s customers are women, underpinning their goal of gender-blind credit scoring. I think when you look at adoption of Fintech products in general, women tend to be left behind. Our view at JUMO is that we still have a way to go. But we’ve come a long way. If you look at where we were in 2016, where only 25% of our base were women, to where we are now where we’re trending towards the 40% mark.
Blind scoring means that there’s no human involved in understanding what a customer’s credit risks look like, which means the propensity to repay and the ability to repay. The benefit of that then creates is that everyone suddenly can use money and can use financial services in the most productive way without being artificially impacted by something which is an old way of looking at things. Blind credit scoring allows everyone to be treated exactly equal
Since GEMCORP have begun working with JUMO they have gone from strength to strength, working with customers in Ghana, Tanzania, Kenya, Uganda, Zambia, Cote d’Ivorie and Pakistan. With expansion plans now underway for Nigeria, Cameroon and Benin. Across Sub-Saharan Africa, 67% of adults remain unbanked. But with JUMO and their innovative banking solutions, this no longer needs to stand in the way of anyone’s success.
The GEMCORP team have really engaged in extensive due diligence on this business. They’ve put teams on the ground here in Cape Town. They’ve seen the potential in this business which I think they’ve also helped to facilitate further investments into JUMO. They really have spent the time to dig in and understand this business. I think without that skilled team at GEMCORP a lot of this wouldn’t have been possible. When we work with them, it’s really an extension of the JUMO team. They’ve been great partners.
Across Sub-Saharan Africa, and beyond, JUMO is making a real-world tangible impact to thousands of people who were previously unable to access traditional banking. In turn, this technology-first approach is fuelling not only economies, but the entrepreneurial spirit across the continent.