It’s the goal of every business to get seamless access to customer information and carry out processes efficiently and with ease. Credrails is set to ensure African businesses attain this goal.
Credrails is a B2B startup building open banking for the African continent, connecting banks, mobile money, offline data into a single API which is subsequently exposed to customers in a variety of use cases.
“We started with lending analytics, reconciliation but other use cases include KYC, on and off ramps for crypto,” said Clara Wanjiku Odero, CEO and co-founder of Credrails.
Before embarking on the journey to build Credrails, Odero worked at global payment companies such as Rapyd and along the line, she saw how Africa was the last place that companies would go to develop their products, mostly so they could say they are global. “But it was really difficult to extract value from the continent because it was so broken up,” Odero said.
Thinking about how to solve this problem; how to reach a market of a billion people, Odero realised this could be done by connecting everything into a single API and then building the next generation of billion dollar businesses on top of that API.
Credrails is a fintech company that has connections to banks and other financial service companies. “So anyone who would have any form of financial data, we aggregate that data,” Odero clarified.
“Think of us just the same way there are payment aggregators – they are people who help pay with bank cards, mobile money or with cash. We are a data aggregator for the continent.”
Citing an instance, Odero explained:
“An example of someone sending money to a relative or anyone in another country within or outside Africa, the remittance businesses would come to us to do something called KYC – Know Your customer. If they wanted to get information about their customers, they would come to us because we aggregate data for the entire continent,” she continued.
“We would be able to tell you about people’s ability to pay. That’s the kind of information we aggregate and those are the use cases that people build with us. So our main customers are fintechs and enterprises looking to serve the entire continent.”
In a nutshell, we could say Credrails enables fintechs scale across the continent and serve the entire market as one.
Speaking on transparency, Odero said businesses can find out customers’ ability to pay via the platform. When onboarding to a lending app, they ask you for access to your bank statements and would have to get your consent to share that statement. When the bank statements are given to Credrails, they do the analytics. “That’s an example and we do this via APIs, with the customer’s consent. We work together with regulators to make sure we are following privacy and data protection laws. Also, in every country we operate, we make sure we are compliant with regulations there.”
Cybersecurity remains an important issue in discussions like this. How does Credrails handle this aspect? Responding to this, Odero’s answer was simple:
“By having the best people work in our security team. We use a lot of bank grade security and always review our security which is best-in-class. We are working on international certification like ISO, 27001 and making sure that we are PCIDSS compliant. Also, we ensure everything is tokenised, just basically using the best-in-class security mechanisms to make sure that everything is done the way it’s supposed to be and we are always updating this information.”
Does that mean no matter how skilled an individual or cybercriminal is in data science and technology, they wouldn’t be able to get any customer information from Credrails database?
Odero gave a reassuring statement. “No they wouldn’t because we tokenise it. We also don’t store the information ourselves. There are things called best-in-class practices and we use that for our businesses,” she emphasized. “Because I used to work in payments, I am very cognisant of these threats.”
A reiteration of Credrails journey
“I call Credrails ‘My love letter to Africa’, Odero said.”I was working at international companies and seeing how we were the last for every company to go to. It was more to tick a box than it was to actually do business and it was not through any fault of their own.”
“It was 55 different countries, extremely difficult for you to extract value from. None of them is big enough to compete with the US. So for it to make sense everything has to be aggregated.”
Owing to the fact that the aggregation had not happened, Odero took this upon herself as her way of changing the narrative or situation by aggregating everything so that it’s one customer base not multiple. “All the complexity that comes with trying to figure out KYC for different companies, we are obstructing that complexity ourselves.”
Challenges are inevitable, they help us grow stronger as long as you do not let them sweep you away. Speaking on Credrails’ challenges, Odero said:
“It’s really hard to connect 55 different countries, so the first thing is the scale of the problem.”
The company’s second challenge is access to information. “Getting access to information the way we want to do it is difficult but we are working directly with the providers of the information. We don’t see scraping as something that is sustainable and it is just impossible to scrap all the banks or all the financial institutions in 55 different countries, so what we are doing is partnering with banks and other institutions to get access to this data.”
Credrails was launched in August of 2020, during the heat of the pandemic. One would wonder if the pandemic was one of its drives.
But for Odero, this wasn’t the case. “I think the major drive for me is that there was nothing left. I have worked at two Unicorns, one Decacorn. I have worked at the very best tech companies in the world and I was head of Africa in the Middle East, then I was going to be head of Europe, Middle Eastern Africa.”
“After a while, there was very little challenge and it was a question of what do I want to do thereafter. I have also been bullish on the continent, I have always believed in the promise of the continent and I knew I was going to start a business. So when I thought about what kind of business it was, what challenges I have seen in the past and how can I address them? Credrails was the answer.”
On investment and seed funds, Credrails bootstrapped. The first fund raised was a seed round from a couple of investors.
Credrails recently raised $2,500,000 from investors including Japanese tech giant, SoftBank. “We are excited for what it could bring,” Odero stated.
Leveraging the capital to improve its product offerings and its reach across the continent, Credrails currently operates in Kenya and Nigeria. The company is looking to expand into other countries, scaling the business and doubling down on the vision to create an API that makes it possible for the next billion dollar company to be built.
“When I say that it’s usually about the way people think about fintechs, they think about payments, remittance and so forth. That was generation one. If you are to look at America or even Europe, it was like PayPal, among others. Now you are seeing Plaid, which is what we are like. With Venmo, you are seeing things that are built on top of infrastructures that are being connected and that’s what we are doing, an aggregator that allows other businesses to be built on top of it.”
Supporting startups to become billion dollar companies
Credrails is making it simpler for businesses to grow. For instance, as an individual who seeks to start a lending business in Africa, what would you need to do? You would have to start in one country, get your licenses, your customer base, understand how to read the statements there so you can know who is and who is not a good customer. Credrails is doing this same thing 55 times across 55 countries.
“What we are saying is we can get you the statements, show you the analytics, and tell you that this person is available or these are the kind of people that you lend to and this is how much they can afford. So all you have to do is deploy the capital, build the software and not worry about what it looks like to get access to this information.”
If you wanted to start a KYC business, rather than going to every country and connecting to the various tows of information, Credrails would make the process seamless for you. For example in Nigeria you have BVN, NIN, etc, imagine having to do that in 55 countries. “We are making it possible for you not to do that by connecting all of these ourselves and exposing this to everyone who wants to do it. You want to scale a business across Africa, you come to us. We want to build a community of businesses that can scale across the continent.”
Odero built the infrastructure which she calls the “Generation one of Fintech“. Odero was head of expansion for Flutterwave, and a fintech executive for major payment networks. Her responsibility entailed connecting all the payment methods in different countries so the company can have one way to make payments which they can share with their customers. “I have already built an infrastructure before, I am just doing it for my own company.”
Being that Credrails focuses on financial information, building use cases from the information and connecting banks, mobile money and offline data into that API, the company targets all sectors.
“So it’s for financial information and there are different use cases for how one can use information. Think about it as a library; we are building a library, people come to do different things in the library. Some come to study, some come to increase their knowledge. It’s basically the same thing. We are the library and the different businesses coming to build on top of us are the different library users.”
It doesn’t matter what field or sector one is in. Credrails’ services can take care of your business needs.
“For instance, in the agricultural sector, usually you would want to lend money to your farmers. How do you know your farmers are able to pay you back? You come to us and we look into their information. These include how much money is coming in and financial information.”
Financial information is the bedrock of a lot of things because it’s basically the story of your life. It’s how you get money in, how you spend money and what is left.
Despite being women-led, Credrails is focused on everyone.
The co-founders have known each other for almost a decade. Teresia Kairu who is also the Chief Operating Officer of Credrails, previously worked in a fintech company called BitPesa, now called Aza Finance.
Kairu was the COO of Aza Finance and it was the first Bitcoin marketplace on the continent. “She has experience building a team and I have experience building infrastructure,” Odero said. “We have a CTO who is an engineer – a former principal data engineer at Jumo – we have very experienced people coming to work on this problem.”
We could say Credrails is one of those companies striving to ensure Africa becomes less dependent on foreign countries.
“I think more than just being less dependent, what are we building for ourselves? I think that’s the story of what Credrails is.”
“What are we building for ourselves and how can Credrails make that easier for the upcoming start-ups? It is a question of how we use our experience to build companies and infrastructure that makes possible the growth of our community of developers who are building the next generation of companies.”
“That’s the question for us. It’s easy in developed markets because the people have had exits so a lot of these developers have money to do this and so on. Here we are going to bring not just our experience but also our network so that when we see businesses built on our platform that are doing well, we ‘ll definitely share it with our network and use that as a way to also help them grow. This business is less about us and more about what we can do to make building the next generation of businesses easier. That’s the goal.”
Advice to start-ups
Everyone makes decisions that are best for their companies. If they are competing in a space where venture funding is not required to be able to scale they could build strategies to scale and generate revenue.
“I can’t tell people whether or not to take funding or if they should quit if things aren’t going well. It’s a certain amount of privilege to be able to not quit because you have savings, or a family to fall back on. It’s just about understanding the risks. I don’t think people should kill themselves over start-ups. I really don’t.”