INSUBCONTINENT EXCLUSIVE:
After growing its lending business in West Africa, emerging markets credit startup Migo is expanding to Brazil on a $20 million Series B
funding round led by Valor Group Capital.
The San Mateo based company — previously branded Mines.io — provides AI driven products to
large firms so those companies can extend credit to underbanked consumers in viable ways.
That generally means making lending services to
low-income populations in emerging markets profitable for big corporates, where they previously were not.
Founded in 2013, Migo launched in
Nigeria, where the startup now counts fintech unicorn Interswitch and Africa largest telecom, MTN, among its clients.
Offering its branded
products through partner channels, Migo has originated over 3 million loans to over 1 million customers in Nigeria since 2017, according to
company stats.
&The global social inequality challenge is driven by a lack of access to credit
If you look at the middle class in developed countries, it is largely built on access to credit,& Migo founder and CEO Ekechi Nwokah told
TechCrunch.
&What we are trying to do is to make prosperity available to all by reinventing the way people access and use credit,& he
explained.
Migo does this through its cloud-based, data-driven platform to help banks, companies, and telcos make credit decisions around
populations they previously may have bypassed.
These entities integrate Migo API into their apps to offer these overlooked market segments
digital accounts and lines of credit, Nwokah explained.
&Many people are trying to do this with small micro-loans
That the first place you understand risk, but we&re developing into point of sale solutions,& he said.
Migo client consumers can access
their credit-lines and make payments by entering a merchant phone number on their phone (via USSD) and then clicking on &Pay with Migo&
Migo can also be set up for use with QR codes, according to Nwokah.
He believes structural factors in frontier and emerging markets make it
difficult for large institutions to serve people without traditional credit profiles.
&What makes it hard for the banks is its just too
expensive,& he said of establishing the infrastructure, technology, and staff to serve these market segments.
Nwokah sees similarities in
unbanked and underbanked populations across the world, including Brazil and African countries such as Nigeria.
&Statistically, the number of
people without credit in Nigeria is about 90 million people and its about 100 million adults that don&t have access to credit in Brazil
The countries are roughly the same size and the problem is roughly the same,& he said.
On clients in Brazil, Migo has a number of deals in
the pipeline — according to Nwokah — and has signed a deal with a big-name partner in the South American country of 290 million, but
could not yet disclose which one.
Migo generates revenue through interest and fees on its products
With lead investor Valor Group Capital, new investors Africinvest and Cathay Innovation joined existing backers Velocity Capital and The
Rise Fund on the startup $20 million Series B.
Increasingly, Africa — with its large share of the world unbanked — and Nigeria — home
to the continent largest economy and population — have become proving grounds for startups looking to create scalable emerging market
finance solutions.
Migo could become a pioneer of sorts by shaping a fintech credit product in Africa with application in frontier,
emerging, and developed markets.
&We could actually take this to the U.S
We&ve had discussions with several partners about bringing the the technology to the U.S
and Europe,& said founder Ekechi Nwokah
In the near-term, though, Migo is more likely to expand to Asia, he said.
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