OK, I don’t know if I’m looking for a sponsor or if I need a pre-pre-seed funding…
Let me explain (long read & French version here).
I’ve been living in West Africa, Bénin since 2016. Have met many people in various sectors, have worked on many different projects (digital transformation, change management…) across the extended region… Have read a lot, as part of my life is to be a « watchman » (as defined by a psy/coach friend), compiling ideas and data to generate a potential vision for the future.
The Covid19 pandemics slowed down most of my consulting/coaching activities. What to do with all that free time? Well, I started working on various ideas to try to transform them into potential projects. A few went directly to the trash after a few days…
Finally, I came back to a subject I’d visited a few times in the past… but unconclusively so far: what to do in the context of digital financial services to « Bank the Unbanked »? And to complete this project, I’m looking for a sponsor.
Digital financial services, powered by fintech, have the potential to lower costs by maximizing economies of scale, to increase the speed, security, and transparency of transactions and to allow for more tailored financial services that serve the poor.World Bank
Gaining access to basic financial services—such as transaction accounts, credit, savings products and insurance—help the poor increase their incomes and become more resilient.
Unequal access to technology and the ‘digital divide’ can exclude the poor, particularly women, from benefits.
In the startup world, the first solution would « always » be: let’s do an app!
But how people, who can’t read (illetrism) or don’t know how to use a phone app (illectronism) and don’t have enough money to pay for internet bandwidth, will be able to use your app? Developing an app is focusing on a specific subset of the market (I won’t call it « middle class » here as it’s a bit more complicated than that). Was reading a post the other day on TAM, the Total Available Market. It was explained that countries on the continent where investment in new ventures was primarily focused, had large global populations, overselling the real TAM. From 200M people to a real market of 3M… there’s quite a difference, isn’t it?
OK then, do solutions exist for the underserved populations?
There are indeed plenty of NGOs, such as micro-finance, or « startups » working on the problem. Governments in some African countries have started to send money directly to Mobile Wallets too… Is it enough? Well, these are good first steps, for sure… Are there ways to go further? Is there a way to create a sustainable business, offering solutions as a social enterprise?
After reading papers from the World Bank, IMF, GSMA, OECD, a few Central Banks and many more, I’d synthetize my way of seeing things in 3 bullet points :
- Technology is useless if it’s not accessible or if people don’t know how to use it.
- Technology needs to adapt to the emerging needs of users.
- Technology is a potential enabler in the quest for social change.
The low levels of human capital provide an ample scope for developing worker-enhancing digital technologies that can be adopted by formal and informal businesses across Sub-Saharan African countries. Many digital technologies that are accessible through the internet are particularly well-suited for the types of less educated, less skilled workers who are more prevalent in Sub-Saharan Africa than in other, higher-income regions—for instance, digital financial services for low-income entrepreneurs and the unbanked […]Africa’s Pulse 04/2021 – World Bank
There were many experiments across the world (India, Africa, South America) and I validated my idea/project against what worked and what seemed to be part of an uncomplete approach of the real problems (a few post-mortem reports were interesting to read).
I then analyzed the financial landscape: existing startups & bank apps, Telcos, DeFi (Decentralized Finance, based on Blockchain), BaaS (Bank as a Service), OpenBanking APIs…
With all this useful information, I wrote down a few drafts (version .04 so far, .05 in the works) and a short presentation.
To be clear, this project is not « app »-based. It’s a full platform/ecosystem and the friends and other people (in the banking/investment/finance world) I showed it to, described it as « interesting and ambitious« .
A few remarks:
- My focus is Francophone West Africa to start with. There are some obvious reasons I can explain, if needed.
- Yes, the goal is to start a « real » social enterprise, that can be « easily » replicated elsewhere.
- This project will be women-led and customer-centric.
- This project will embed (or associate with) ways to help people (customers) at multiple levels: financial education, mental health hotline… Will also be environmentally friendly (recycling, solar energy as much as possible…)
Thanks for reading.
This post was first published on LinkedIn on July 1, 2021.DJM