The main goal of fintech companies is to lower access barriers and include segments that have traditionally been left out of the financial services industry. With the help of Fintechs, ethical and successful businesses may now maintain their operations with easy access to finance at reasonable rates. In order to power financial services in Africa, JUMO, a Banking as a Service platform employs AI. In this way, the startup provides lending and savings products to business owners as well as financial services infrastructure to partners including banks, mobile fintech platforms, and eMoney operators.
JUMO has touched more than 20 million users and small enterprises in their seven years of existence and enabled the issuance of more than $4 billion in loans. The startup now plans to establish its presence in new African markets including Cameroun, Nigeria and Benin Republic.
Recall that JUMO had secured a $120 million investment led by Fidelity Management & Research Company, LLC in November 2021. At the time, the fintech had noted that the investment will fuel its international expansion into new markets and improve on its SME offers.
Jumo’s Managing Director for Africa, Buhle Goslar, unveiled the fintech development plan for the upcoming year on the sidelines of the Africa Financial Industry Summit (Afis), which took place in Lomé on November 28 and 29. Cameroon will be the focus in the first quarter, followed by Nigeria and Benin in the second. In the first half, there will also be the unannounced introduction of new commercial products in Ghana and Uganda.
JUMO is neither a neo-bank nor a non-bank lender or financial services provider; the firm does not offer credit, savings, or insurance products directly. Instead, JUMO’s business strategy serves as an illustration of a “aggregator platform”. Aggregator platforms, also known as “Platform as a Service (PaaS),” are a specific type of multi-sided digital economy market-maker that stands in between “sellers” and “buyers” of goods.
JUMO has served 18.9 million customers, has disbursed $3.95 billion in loans and given 128 million loans to date. By reducing the cost of lending by up to 60% in the last 6 years, JUMO has accelerated systematic change enabling capital to flow more freely, in the markets where they operate. JUMO’s entire business is based on fostering social impact, as its business model is centered on improving financial inclusion for the underserved.
JUMO endorses the principles set by the Responsible Finance Forum and ensures fair and transparent terms and lending practices. They work with their banking and payments partners to ensure that customers receive credit amounts they can manage and pay back, while actively applying measures to avoid over-indebtedness.
JUMO has a vision beyond the successful growth of its technology platform. CEO Andrew Watkins-Ball has said, “Our ambition is to facilitate the financial inclusion of every adult in the markets we serve.” While many Fintechs state similar aspirations, JUMO’s track record signals deeper commitment to quality financial services.
JUMO has increased its decision science, credit risk, and portfolio analytics capabilities after the two Smart Campaign assessments. For them, these operations are integral to strong operations but also to touch-points for ensuring healthy take-up and usage of its products.
What the Expansion Offers New Markets
JUMO offers loan options to people who would not typically have access to formal lending options. This is evident in the fact that over 90% of its consumers make less than $10 per day. Over 40% of Nigerians for example, make less than $1 each day. This population will benefit greatly from the expansion project. The growth of JUMO will significantly increase people’s ability to manage their money by offering loans for things like company investments, college expenses, or more fundamental requirements like food and healthcare.
Reintermediation of monetary and financial relationships is the main justification for JUMO. JUMO’s reintermediation will entail recruiting differentiated users “at scale” utilizing socio-technical processes, displacing and modifying current informal interactions in Africa, which is home to nearly three-quarters of the estimated 1.7 billion “unbanked” individuals worldwide.
JUMO typically aims to support a broader developmental logic of opportunity, based on inclusion within formal economic institutions. For instance, the JUMO website and marketing materials are rife with images of consumers who seem to be self-sufficient, upwardly mobile, and generally young and tech-savvy. The platform intends to promote access, empowerment, and inclusion into the contemporary system of rational formal monetary and financial relations, and to favorably impact the demographic of Africa that is most financially excluded.