Digital Banking Startup Credable Raises $2.5M to Expand into Nigeria and Pakistan
Credable, a digital banking startup announced that it has raised $2.5 million in a funding round led by Pan-African early-stage VC firm Ventures Platform. Other participants include Launch Africa, MAGIC Fund, ACASIA Ventures, AAIC Investment, Adaverse/Emurgo Africa and other strategic angel investors.
Founded in 2021 by Nadeem Juma, Jad Abbas, and Michael Tarimo, Credable is a digital banking platform enabling digital banking products for Businesses and connecting them to Financial Institutions to better serve the underbanked populations with products they need.
The Dubai-based startup launched officially in May 2022 with two projects in East Africa – partnering with Vodacom M-Pesa in Tanzania to offer a 30-day term loan product and Diamond Trust Bank in Kenya to offer a short-term lending product for its customers.
Since then, Credable has launched more than six products tailored to various businesses, including banks, mobile network operators, e-commerce platforms, and other fintech players. Their products have been implemented across Tanzania, Kenya, and Uganda, and have attracted over 1.2 million registered users. Additionally, their banking solutions have been utilized by over 200,000 customers, ranging from individual consumers to small and medium-sized enterprises. These offerings include savings accounts, term loans, overdrafts, asset financing, and other credit options. With the aid of Credable’s innovative platform, they have successfully disbursed $5 million worth of loans and have received over $3 million in deposits to their savings products.
With this new raise, the startup intends to expand its offerings to large markets where the regulatory environment is conducive and businesses with profitable channels across MENAP and West Africa – Nigeria and Pakistan. It also plans to launch four more products this year and partner with businesses in these countries.
According to CEO, Nadeem Juma in a discussion with Techcrunch, “the problem we’re trying to solve is that a huge population of underbanked customers need banking services to improve their livelihoods. They are in different channels that they use every day, like telco-led mobile money, e-commerce platforms and gig economy apps.”
“Rather than try to create a new channel to bank these customers, we aim to enable these channels through a B2B2C offering that provides the customers with the banking services they need in the channels they’re already in,” he added.
Aside from its technology stack and alternative credit scoring capabilities, Juma explained that the startup also provides extensive support to its business clients throughout the product design, development, and management stages. Credable collaborates closely with its clients to ensure that the end product is tailored to its customers’ needs.
Furthermore, the company offers a comprehensive end-to-end solution that mitigates credit risk by partnering with balance sheet providers, typically tier-two financial institutions that face challenges in acquiring new customers due to their limited relationships with tech-enabled businesses.
Credable utilizes a revenue-sharing strategy with all of its partners in order to maintain their involvement and foster a more equitable environment. Additionally, it aims to tackle the issue of predatory microlending, a common financial practice in emerging markets that often involves imposing unfair loan terms on unsuspecting borrowers. This predatory behaviour allows unscrupulous lenders to profit at the expense of those with little or no credit history. By implementing a revenue-sharing model instead of the typical cost-per-service approach, the fintech startup hopes to reduce lending rates as much as possible, ultimately providing consumers and businesses with access to affordable capital.