SC Ventures, Standard Chartered’s innovation, fintech investment and ventures arm has entered into a Memorandum of Understanding (MOU) with Yabx, a company incubated by Comviva and part of the Mahindra Group, to address a deep-rooted need for responsible consumer finance in Africa.

ALSO READ: Fintech, Yabx Launches in Nigeria to Enhance Digital Lending

Africa has over 700 million mobile wallets, and about 450 million bank accounts but access to formal credit remain severely constrained due to poor credit infrastructure and the slowly evolving risk appetite of financial services players, especially traditional banks.

The COVID-19 pandemic has accelerated digitization in the financial sector and created a fertile environment for new and disruptive products to be taken to the market. The partnership between SC Ventures and Yabx is leveraging on this to create unique, Africa-specific products that will increase access of credit to the underbanked across Africa.

Nimble future-ready technology, data analytics combined with a deep understanding of banking will reduce the cost of delivery of innovative credit products, thereby widening inclusion across underserved segments in Africa where it is needed most. Given the scale and the complexity of the opportunity, SC Ventures and Yabx have taken a collaborative approach to jointly address the challenge. Loans will be provided to customers for specific purposes like education and skill development using an innovative data-driven scoring and analytics engine that has been built with rich experience from African markets. These loan products will be initially launched in Uganda and then subsequently expanded to other countries in Africa.

Jiten Arora, Member SC Ventures said, “We are excited at the prospect of using a data-driven, technology-enabled partnership model to serve the underbanked through purpose-driven loans in Africa, a continent for which we have a deep understanding and a strong commitment towards.”

Manoranjan Mohapatra, Chief Executive Officer at Comviva, commented, “Yabx has seen exponential growth over the past one year, and we will continue to invest in its mission to serve millions of consumers and MSMEs in emerging markets who have limited traditional sources of funding available to them.”

Rajat Dayal, CEO at Yabx, said, “We have a lot of synergy with SC Ventures in Africa and together we are uniquely positioned to create a seamless embedded finance experience. This partnership further bridges the gaps in the current market, driving digital innovations and bringing significant benefits to the underserved population of Africa.”

According to a World Bank Report, the private credit bureau coverage in Nigeria was 13.9% in 2019. The numbers must have improved post pandemic but there is still a long way to go. 

Yabx aims to bridge the gap between the new-to-credit segments and the banks in Nigeria at scale and introduce new age fintech products and solutions in the high demand markets of the country.

The company will further amplify its local operations in Nigeria to capitalise on the investments being made in the digital lending space of the country.

Yabx has partnered with several African banks to create large, scalable and profitable digital lending portfolios by leveraging its fintech platform.

In Nigeria, where banks generally have faced challenges in underwriting its own captive base optimally, Yabx will not only help banks to widen the horizon of services they offer to their captive base but also allow them to launch new and innovative products like Buy Now Pay Later, Personal Loans, Payday loans, MSME loans etc.

Commenting on the expansion, Rajat Dayal, CEO & Founder of Yabx said, “While digital financial services have catalysed financial inclusion, access to financial services and credit remains an obstacle in countries like Nigeria. Without available credit services, smalls farmers, SME owners, and the new to credit segments face difficulty in obtaining loans to make profitable investments or pay off debts”.

“Today, banks and financial institutions in Nigeria are more than keen to partner with us and launch new and innovative products for new-to-credit segment. Our platform doesn’t only increase the reach of such banks but also helps them play a major role in creating a global credit score which will eventually help the new to credit segments in the country build a life without any external aid,” further added Rajat. 

Yabx uses Big Data Analytics and AI/ML algorithms on large volumes of alternate data to create a detailed financial identity of customers and help banks underwrite them over Yabx Loan origination and Lifecycle Management System. This customer origination and servicing can be done on various channels like the bank’s own digital banking app, USSD channel, website or even as embedded options in third-party apps.

Yabx’s growth and innovation has also been validated at the most reputed global platforms ranging from the United Nations Capital Development Fund (UNCDF) to being recognised as the “LendTech of the Year” at the Asia Fintech Awards 2022. The Fintech start-up also won the “Best BNPL Solutions Award” at the recently concluded Global Fintech Fest 2022.

With such global recognition and presence already in place, Yabx is set to accelerate its mission in the Nigerian market to open up corners of opportunities that didn’t exist earlier.

The fintech start-up recently won the Pacific Islands FinTech Innovation Challenge 2022 for ‘Increasing usage of financial products and services in Solomon Islands’ organized by United Nations Capital Development Fund (UNCDF) in Singapore. 

There is a significant dearth of financial literacy & financial product usage in the Islands and Yabx will be working together with Solomon Islands National Provident Fund to amend this situation.

Yabx, continued its winning streak by outperforming competition at the Asia Fintech Awards’22 and winning ‘LendTech of the Year’ amongst hundreds of global players. Asia Fintech Awards is a stage to find the world’s premiere financial services solution fostering the best financial technological ventures stretching from Mumbai to Tokyo. 

Within a week, Yabx went on to win the Best ‘Buy Now Pay Later’ Solution award at the Global Fintech Fest’22, a gathering recognizing the best that the FinTech world has to offer.

This was one of the biggest events worldwide and a testament to the new age digital solutions offered by Yabx that are transforming the lives of customers and providing financial empowerment.

Rajat Dayal, CEO & Founder of Yabx said, “This is a great time to be in this space, solving complex financial problems which touches people’s lives. These are important yet unaddressed issues, for example, customers’ transactional hurdles are often caused by shortage of funds in their wallets. Through our BNPL solution, users will be able to complete transactions that would have otherwise failed or postponed due to shortage of funds. These awards validate our efforts in bringing innovative digital lending services to the forefront.”

Yabx has witnessed significant momentum in its existing lending portfolios. With partnership agreements signed with leading Banks and Wallet providers in several East, West, and Central African countries. Yabx is poised for market expansion and launching new service offerings to cater to customer needs.

‘We are planning to grow our customer base by two-fold this year which will further contribute to financial inclusivity and literacy for more people,” further added Rajat.

Making quick digital lending a seamless norm for anyone and everyone with a mobile phone is the future of the world.

In the midst of such recognition, Yabx is determined to intensify operations to exponentially progress towards financial inclusion and stir a digital revolution across geographies.