South Africa-based FinTech company, JUMO, has raised $52 million to expand its services more into the Asian market. The financing round was led by Goldman Sachs and also saw Proparco, Finnfund, Vostok Emerging Finance, Gemcorp Capital, and LeapFrog Investments participating.
JUMO has its head office in Cape Town, South Africa and it also has offices in Kenya, Uganda, Tanzania, Rwanda, Ghana, Zambia and the United Kingdom. It provides loans and savings products to individuals and small businesses who don’t have a bank account.
To date, has raised $90 million.
Financial inclusion in Afrika
One of the big challenges and problems that companies like JUMO address is that of people and small businesses that operate outside the traditional and formal financial services sector. as such, such individuals and businesses tend to struggle to secure among others, loans. This is where companies like JUMO come in and have developed proprietary processes and systems in order to be able to assess how much of a loan they can advance to such individuals and small businesses.
Known as financial inclusion, because it involves bringing people who are outside of the formal financial sector into it, it is generally seen as a positive step in many Afrikan countries.
But, is it?
In some cases, not all, you find that the FinTech companies and startups, especially when it comes to mobile money and credit, charge rather steep transaction and other fees thus in turn eroding the very income that their target market already has. Which defeats the whole purpose because individuals who are not banked typically don't have access to a bank or they find the banking charges exorbitant.
This has become a big issue with the Central Bank of Kenya proposing that FinTech lenders be regulated as a result of, among others, the fees they charge.
Since launching in 2014, JUMO reports that approximately 9 million people have either saved or borrowed money using their platform. This includes over $700 million in loans that have originated from its FinTech platform.
Cover image credit: Andrew Watkins-Ball, CEO at JUMO. Share this article via: