Ghanaian Fintech Bezo Money Raises US$750,000 to Offer Social Financial Products and Services – Gains 100,000 Users

by · December 19, 2022

London – The mobile phone financial ecosystem is constantly growing in depth, and one of the more successful areas is small-scale lending. Russell Southwood spoke to Bezo Money CEO Mubarak Sumalia about how it is addressing the Ghana market.

Bezo Money CEO Mubarak Sumalia had no problem understanding what his potential customers needed and why: “I grew up in a slum in Accra and I understand why people have stayed at the same level financially and I think there is something very wrong with this.”

To participate in the annual participation competition of the MEST program, he went to his mother to understand more about the credit clubs that come under the generic name of Susu collectors: “I was fascinated by the model. That was how she paid for my school fees. I wondered on: why aren’t the banks doing this? It was a way for people to bank. I thought technology is needed to be able to do this well.”

The susu collector is a financial intermediary who, for a small fee, gives people an informal way to save and access their money. In this way, they can run credit unions where members can access larger amounts of credit to pay for larger payments they have to make. These collectors exist because the banks do not have financial products aimed at poorer citizens and there is a low level of financial literacy in the informal sector.

But what seemed like an obvious opening for a fintech startup wasn’t what it seemed: “They didn’t want to use our technology because they were already happy with what they were doing. From this we started to understand that we needed to build based on need.” On this basis, they began to focus on the key problem. They wanted to access credit and have a credit history: “No one knew their credit history, and they wanted to be able to show that they had a track record.”

“MEST gave us US$100,000 to find out, but we were hit by the arrival of Covid. We did a crowdfunding campaign to support these women. We also went to Lagos and it’s very big there. The idea was to build a digital bank for the informal sector. We raised USD 200,000 and the idea was to go broad.”

Like all the best laid plans, it didn’t work out as first thought. To reach people in the informal sector, the service was initially offered using USSD which would work on basic phones. It developed a partnership with Vodafone Ghana to offer a personal savings platform for the unbanked. So far, it has reached 100,000 customers and is waiting to increase capacity before taking on more business next year. It crashed when 200,000 tried to join. Currently doing about $80,000 a month in financial transactions.

As soon as it started raising its profile in the market, it found that a lot of young people were contacting them and saying: why isn’t there an app? Bezo Money started by saying that the service was designed for their parents, but eventually responded to this claim: “We built a web app that could connect our service to mobile money wallets.”

It addresses these two markets differently. The older, less financially and technologically savvy are interested in being able to get credit based on their savings history. They are aimed at using USSD on basic phones and Bezo Money has partnered with community leaders to explain things. Their service is much more focused on sales agents on the ground and face-to-face offline service.

Occasionally, Susu collectors walk away with all the money and credibility is important. For the younger users, it is much simpler: “They just get it”. The distribution between older and younger users is approximately 70%/30% in favor of the latter.