SC Ventures and Yabx partner to support Africa’s unbanked

SC Venturesinnovation, fintech investments and the venture arm of Standard Charteredhas entered into a Memorandum of Understanding with the digital lending platform Yabxwith the aim of addressing the need for responsible consumer finance across Africa and supporting financial inclusion in the region.

SC Ventures and Yabx revealed plans to capitalize on Africa’s recent digitization of the financial sector. The Covid-19 pandemic greatly accelerated this development, and Africa now has over 700 million mobile wallets.

Citizens of the continent also have around 450 million bank accounts in total. Despite this, access to formal credit has been limited due to poor credit infrastructure and the slowly evolving risk appetite of financial services players, especially traditional banks. In response to this problem, SC Ventures and Yabx look to create a new Africa-specific product line to increase access to credit for the unbanked.

The two companies understood that a collaboration was best, given the scope and complexity of the challenge. They explained that flexible future-ready technology, together with data analytics, can reduce the cost of delivering innovative credit products. The prediction of costs could increase inclusion among the most underserved parts of Africa.

Loans will also be given to customers for education and skills development, using a data-driven scoring and analysis engine. The loan products will initially be launched in Uganda, and will eventually be expanded to other countries across the continent.

Service of unbanked “through purpose-driven loans”

Jiten Aroramember SC Ventures, said: “We are excited by the prospect of using a data-driven, technology-enabled partnership model to serve underbanks through purpose-driven lending in Africa, a continent we have a deep understanding of and a strong commitment to.”

Manoranjan MohapatraCEO of Comviva, commented: “Yabx has seen exponential growth over the past year and we will continue to invest in their mission to serve millions of consumers and MSMEs in emerging markets who have limited traditional sources of funding available to them.”

Rajat DayalCEO of Yabx, said: “We have a lot of synergy with SC Ventures in Africa and together we are uniquely positioned to create a seamless embedded finance experience. This partnership bridges the gaps in the current market, drives digital innovations and delivers significant benefits to the underserved population of Africa.”

Fintech Yabx, headquartered in the Netherlands, expanded into Africa in late 2022, after partnering with a number of Nigerian banks. The aim of the initiative is to support banks that offer a wider range of services. It also looks set to allow banks to launch products including Buy Now Pay Later, personal loans, payday loans and more.