Credable, a business in the financial infrastructure space whose Global headquarters is located in Mumbai, Maharashtra, India, has raised $2.5 million in an early round to provide its clients with technology and banking services.
This follows a pre-seed round for the embedded finance platform in early 2021, which was led by The Continent Venture Partners. (TCVP).
To reach the unbanked and underbanked, many platforms are turning to embedded financial solutions in emerging countries. Providers of banking infrastructure are largely responsible for spreading these solutions. They make it possible for telecommunications companies, e-commerce sites, and logistical firms to provide customers with financial services.
In May, Credable released two new products: a short-term lending option for Diamond Trust Bank in Kenya and a 30-day term loan with Vodacom M-Pesa in Tanzania.
More than six items have been made possible thanks to fintech for banks, mobile network providers, e-commerce platforms, and fintech companies in Tanzania, Kenya, and Uganda. More than 200 thousand individual customers and business clients have opened accounts on its platform. They cover a wide range of financial services, from savings accounts to overdrafts to asset financing. Credable claims that its platform has processed $5 million in loan disbursements and over $3 million in savings deposits.
Read also: Adaverse backs Ejara, woman-led DeFi platform to democratize African finance
Nadeem Juma, CEO of the startup, told TechCrunch that they plan to expand their embedded banking platform to major nations in MENAP and West Africa, such as Pakistan and Nigeria. With this money, Credable plans to expand into four more countries and introduce four new products while forming partnerships with local firms.
‘We’re worried that a sizable number of people who don’t have bank accounts need those services in order to enhance their standard of living. The company’s CEO, who co-founded the company with Jad Abbas and Michael Tarimo, explained that their products can be found in a variety of channels that consumers use on a regular basis, including telco-led mobile money, e-commerce platforms and apps for the gig economy. Instead of launching a brand-new channel specifically for these customers, we’ll be enabling existing channels with a business-to-business-to-consumer solution to provide the necessary financial services to these customers where they already spend their time.’’
Fintech companies in the United States and Europe, such as Unit, Rapyd, and Treasury Prime, have flourished in recent years thanks to the developed financial systems in those regions. The companies Flutterwave, JUMO, Migo, Maplerad, Bloc, OnePipe, and Anchor hope to replicate similar expansion in Africa and other developing countries.
Financial institutions and major businesses in the United States have used this approach before and are familiar with it. CFO Abbas was a director at private equity firm Actis before co-founding Credable with his colleagues. “We still have a sizable unbanked population, therefore, our markets aren’t quite ready. Credable is the industry standard when it comes to introducing innovative digital banking products, and that’s exactly what we’re working towards.”
Executives at Credable claim the company’s unique capabilities help it stand out in Dubai’s competitive industry. According to Juma, the firm “handholds” its corporate customers through product design, development, and management to guarantee the product is relevant to their end users, in addition to providing the technological stack and alternative credit scoring. Credible works in tandem with balance sheet suppliers to deliver a turnkey solution free of chargeback potential (usually tier-two financial institutions that struggle to access new customers because they lack relationships with tech-enabled businesses).
More On Credable Investment
In order to “keep them invested and provide some fair playing field,” the fintech of two years’ standing divides its profits with its collaborators. We at Credable are also committed to ending predatory microlending, which offers borrowers high interest rates and other unfavourable terms. Criminals in emerging markets capitalise on the fact that their customers have no credit history or access to credit. The financial technology firm proposes a revenue-sharing model as an alternative to the traditional cost-per-service model that it believes will result in lower rates and more affordable financing for individuals and enterprises.
The financing is led by a group of strategic angel investors, including Ventures Platform, Launch Africa, MAGIC Fund, ACASIA Ventures, AAIC Investment, Adaverse/Emurgo Africa, and others. Dotun Olowoporoku, the managing partner of the Ventures Platform, believes that Credable’s platform will create a flywheel that propels economic growth in emerging markets by allowing enterprises to deliver financial services to formerly excluded market groups.
People on the continent have been trying to answer the question of financial inclusion for the past decade, which has seen the rise of fintechs and mobile money. Remarked Juma, who has spent most of his professional life providing corporate solutions in the telecoms and banking industries through fintech. We don’t believe anyone has done that yet because it requires delivering an end-to-end solution and collaborating with banks and businesses. A scalable solution to the problem might have a much greater impact than focusing on creating new channels and collecting customers one by one.