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According to the International Financial Centre (IFC), Africa has a credit gap of $330 billion. Some estimates put this figure as high as $800 billion. Due to low banking penetration, many Africans are unbanked and thus lack sufficient financial history to pass traditional credit analysis. This has led to the emergency of digital instant loan apps.
Uganda has become a battleground of instant online loan apps that do little due diligence before they disburse loans. Many of these apps then engage in public shaming tactics and abuse of private data to coerce people into paying back. One of their favourite tactics is to message all the contacts in one’s phone book. After significant public outcry, the Uganda MicroFinance Regulatory Authority (UMRA) began to clamp down on these apps. Two weeks ago, it published a list of illegal online instant apps and encouraged Ugandans to stay away from them.
Despite being an instant loan app, Fido Credit wasn’t included on this list. Unlike other apps, Fido Credit is registered, licensed, and operates in full compliance with the laws of Uganda. Emerged as a significant player in the fintech landscape. The company was established with the vision of making financial services accessible to the unbanked and underbanked populations in Africa. Fido Credit aims to empower individuals and small businesses by providing instant, flexible, and affordable digital loans, thereby addressing the challenges posed by traditional banking systems that often impose stringent requirements for credit access.
Since its inception, Fido has successfully expanded its operations beyond Ghana into Uganda, where it continues to serve a growing customer base. The company has disbursed over 3 million loans, reaching over one million customers across its markets. Fido’s innovative approach leverages technology to simplify the loan application process, using a proprietary scoring system known as the “Fido Score.” This system integrates both alternative and conventional financial data to assess creditworthiness, enabling quick loan approvals and disbursements, often within minutes.
In September 2024, Fido Credit secured $20 million in a Series B funding round, co-led by BlueOrchard and the Dutch entrepreneurial development bank FMO. This funding is part of a broader strategy to enhance Fido’s capacity to serve micro, small, and medium-sized enterprises across Africa.
The investment reflects confidence in Fido’s business model and growth trajectory, with the company reporting over 100% year-on-year growth in the past few years Additionally, Fido has obtained $10 million in debt funding from Stanbic Bank Ghana and Growth Investment Partners Ghana, further solidifying its financial foundation for expansion.
The emphasis on financial inclusion is evident in Fido’s mission, as articulated by its Uganda Managing Director Emmanuel Oketa who highlights the company’s commitment to empowering individuals and entrepreneurs to improve their financial futures in an exclusive interview with CEO East Africa.
What sets Fido Credit apart from other instant loan applications in Uganda?
Fido Credit stands out in the Ugandan market due to its commitment to accessibility, transparency, and innovation. Unlike many loan platforms, Fido does not require loan collateral, and our services are fully digital through the Fido app.
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We utilise machine learning-driven risk models and the Fido Score to ensure responsible lending while providing fast, flexible credit options. Our system enables underbanked individuals and entrepreneurs to access financial services, supporting financial inclusion across Uganda.
How does Fido Credit manage non-performing loan risk, especially for first-time borrowers with only the Fido score used for credit checks?
Fido carries out robust credit checks. It just does it in real-time and very efficiently, driven by proprietary machine learning models. Managing risk is a core part of Fido’s operations, and these sophisticated models mitigate non-performing loans.
Using these models, we developed the Fido Score, which integrates alternative and conventional data, providing real-time insights into each borrower’s risk profile. The system then continuously learns and adapts, improving our risk assessment over time, allowing us to offer tailored, responsible loans, and building long-lasting, trusted relationships with our customers.
With the recent $30 million funding, what specific goals does Fido Credit aim to achieve in the coming years?
With the $30 million Series-B funding, Fido aims to scale its operations across multiple African markets, targeting over 500 million underserved individuals and businesses. This funding will support our expansion beyond Uganda and Ghana while also enabling us to introduce new financial products, such as savings and personalised insurance solutions.
Additionally, we will continue investing in our machine learning models and broader Research & Development, to ensure we remain at the forefront of digital financial services in Africa.
Can you describe the impact of Fido Credit’s services on financial inclusion and why was Uganda such a key market?
Fido’s services have had a significant impact on financial inclusion in Uganda. Approximately 90% of our customers do not previously have a credit history. Through our Fido Score, we have been able to offer credit to these customers, who previously lacked access to formal financial services. Uganda was a key market due to its rapidly growing digital economy and large underbanked population.
Notably, 40%+ of our customers are small businesses, and 50% of these businesses are owned by women. By supporting micro-entrepreneurs and small business owners, we are helping to drive economic growth and empower individuals to take control of their financial futures.
How do you see the future of digital lending evolving in Uganda, and what role will Fido Credit play in that landscape?
The future of digital lending in Uganda is bright, with increasing mobile penetration and a growing demand for accessible financial services. We foresee a more personalised, data-driven approach to lending, where machine learning plays a central role in assessing creditworthiness and offering tailored financial solutions. Fido Credit will continue to lead this transformation, leveraging our proprietary technology and expertise to expand financial access and inclusion across Uganda and the broader African market.
Our commitment to customer protection, compliance with regulations, and promoting financial inclusion ensures that we will continue to provide safe and responsible lending, always putting the needs of our customers first. Through ongoing innovation, we remain at the forefront of the digital lending space, offering products that meet the evolving needs of our customers.