Sub-Saharan Africa’s largest fintech investment fund – GreenHouse Capital – has invested (amount undisclosed) in Indicina, an innovative and solution driven fintech startup that creates a hassle-free lending process through its banking-as-a-service technology.
GreenHouse Capital has for years invested in promising fintech and fintech-enabled startups and their latest investment in Indicina is nothing short of extraordinary. Indicina’s solution-based approach bridges a major gap in Africa’s credit infrastructure.
Access to credit is a big problem in Africa. Indicina is building the infrastructure to unlock it.
“Only 17% of African banking customers hve consumer loans – less than half of those with a transaction product. This massive consumer credit opportunity requires technology and credit risk innovation that most lenders currently don’t have,” says the CEO at Indicina, Yvonne Johnson.
Indicina’s platform optimizes analysis and decision making for lending in Africa which makes the lending process easier and faster. It creates a massive opportunity to tap into Africa’s consumer credit potential.
“The market opportunity is driven by both regulation and improved financial technology. Central banks in many African countries, for example Egypt and Nigeria have recently introduced regulation that mandates a minimum ratio of consumer loans (individual retail and SME) to the total loan portfolio. IFC’s estimate of this opportunity is $300B. To capture the upside in consumer lending, banks need a competitive digital offering backed by strong data and analytics capabilities for more efficient customer acquisition and risk assessment,” says Johnson.
There have been blind spots in Africa’s credit sector especially for consumer lending due to lack of data, proper analysis and personnel which has limited the potential of the credit sector in Africa. Indicina solves the problem by providing alternative credit scoring and data needed for quick decision making. This accelerates the process of financial inclusion.
“Banks have typically focused on the corporate lending space because of the risk profile and ease of execution. Consumer loans issuance requires a different type of risk management skills, different from what banks have developed over decades. Additionally, distribution is a key consideration in consumer loans and in order to reach a good scale, technology has to play a role in the distribution and speed of execution. Our platform at Indicina tackles this problem by providing data in the necessary format to leverage it for analysis and decision making.”
Indicina’s full credit analytics suite is already a favorite with the risk officers of their existing clients due to its ability to fully track and monitor the lending business throughout the entire customer life-cycle.
Indicina’s key value proposition is to improve consistency of credit decisions and minimize bias from human underwriters; increase customer lifetime value; empower lenders to drive new uses of data beyond predicting default such as managing churn, marketing and campaigns and empower non-lender brands to expand offerings by embedding lending and related products.
“We invested in Indicina because of its alternative credit scoring, risk assessment and quick decision-making on credit. Indicina presents a massive opportunity for the continent to accelerate financial inclusion and we are proud to be part of their story,” says the Principal at GreenHouse Capital, Ruby Nimkar.
The Nigeria based fund is an important component to the growth of Indicina because of the values they hold for a tech-enabled Africa as well as their expansive network and know-how.
“GreenHouse Capital are founders and operators with a deep appreciation of the African operating environment. There are a few challenges I’m facing now that they can help problem solve through their active participation model in the tech ecosystem in a manner that directly benefits portfolio companies. So far, they have already involved Indicina in industry events that raise visibility in addition to the behind the scenes business development work to fuel traction,” says Johnson.
Indicina is clearly here to transform banking in Africa.