Africa’s social media money service providers are making financial services more accessible for a wider range of Africans.
Statistics say that about 80% of the continent’s 1.2 billion people do not have a bank account or access to formal financial services.
Most African financial institutions, banks especially, are taking to the internet and mobile to make banking services more accessible.
A typical example will be the Kenyan and Tanzanian successful mobile banking platform, M-Pesa, which was launched in 2007.
Still being more flexible with the idea of creating more accessible banking/financial services, a country like Nigeria has come up with a social media based style.
In Nigeria now, it is possible that your social media profile could make you score in terms of loan application.Whoever knew your credit-worthiness could be detected by your social media personality profile.
Nigerian youths have founded a money lending start-up, Strapline with the motto, “Get rep, get cash, stay fly”. According to one of the founders, Faith Adesemowo”
“The solution is designed to bridge the gap of immediate fund access for people with limited access to formal credit.”
“Loans are guaranteed by the user’s social profile and network, allowing users to borrow from banks and other financial institutions based on their social reputation.”
“We solve the problems of prohibitive cost to serve the market, inadequate financial history, unreliable credit score and lack of collateral for these people that hitherto prevented our partner financial institutions from serving this market.”
The social media money lending company says that the platform uses its own algorithm to determine the “social reputation score” of the user-client.
They also work with “social guarantors” to validate their trustworthiness. At the moment they have about 10,000 registered users taking out loans of up to 10,000 Naira (£24). Withdrawal of loans occurs via bank accounts or mobile money.
Africa’s social media money service providers are bridging the gap for Africans who would not normally have access to money services because of status and location.
Jumo Partners are one of Africa’s social media money service providers. They lend money to people and send it to their phones. They also use their own algorithms to ascertain who should be lent money and who should not.
Also, in Uganda, we have a mobile friendly money institution known as Redcore Interactive.