How a woman changed lend­ing sys­tem in Africa

Lesotho Times - - Business -

NEW YORK — A vast ma­jor­ity — 85 per­cent — of mi­cro through medium size en­ter­prises in emerg­ing mar­kets suf­fer from a lack of ac­cess to credit, ac­cord­ing to the In­ter­na­tional Fi­nance Cor­po­ra­tion and McKin­sey.

When an African fe­male en­tre­pre­neur can’t bor­row money, she must rely on her own limited sav­ings to in­vest in her busi­ness, which lim­its her prospects.some would think this is an in­sur­mount­able prob­lem, but not Kate Woska, an en­tre­pre­neur­ial bank an­a­lyst who wanted to do good.

Woska re­searched the mar­ket to un­der­stand what was work­ing and what wasn’t. She learned about the play­ers in the sec­tor. She learned about the mar­ket­place trends that were im­pact­ing the sec­tor, in­clud­ing use of mo­bile. In de­vel­op­ing re­gions, the adop­tion rates of mo­bile are grow­ing faster than ac­cess to TV or elec­tric­ity.

She iden­ti­fied the prob­lem and what fi­nan­cial ser­vices the mar­ket would pay for. Woska dis­cov­ered that fi­nan­cial in­sti­tu­tions didn’t have ad­e­quate:

risk trans­fer­ence to en­sure re­im­burse­ment if a bor­rower failed to pay back a loan

data on un­der­served com­mu­ni­ties that shows who was a good risk and who wasn’t

op­er­a­tional ef­fi­ciency in re­mote ru­ral ar­eas, which re­sulted in high in­ter­est rates

meth­ods to connect with peo­ple seek­ing loans to start or grow their busi­nesses who are a good credit risk

It wasn’t a lack of cap­i­tal that was hold­ing growth back. It was un­der­uti­liza­tion of cap­i­tal. Banks were afraid to make loans to peo­ple who didn’t have the same de­mo­graphic pro­file as peo­ple who had pre­vi­ously paid back loans.

The same Catch-22 that women face in the U.S. when look­ing for eq­uity fund­ing, trips up women in Africa when they are look­ing for a loan. With the ex­cep­tion of fi­nan­cial in­sti­tu­tions that are char­tered to lend to un­der­served com­mu­ni­ties, fi­nan­cial in­sti­tu­tions in Africa for the most lend to male prop­erty own­ers over the age 35.

The bias wasn’t just based on gen­der, but also on eth­nic­ity, reli­gion, health, age, etc.

To ad­dress those in­ad­e­qua­cies, Woska founded Atikus In­sur­ance, which pro­vides credit in­sur­ance and tools to to en­able and in­cen­tivize lenders to ap­prove a greater num­ber of loans at more eq­ui­table rates.

In ad­di­tion to shar­ing the risk if a bor­rower doesn’t re­pay, Atikus ag­gre­gates and shares data from a range of fi­nan­cial in­sti­tu­tions to help them de­ter­mine the char­ac­ter­is­tics of a good risk in un­der­served mar­kets.

As part of its data gath­er­ing, Atikus also as­sesses fi­nan­cial lit­er­acy and busi­ness devel­op­ment pro­grams so fi­nan­cial in­sti­tu­tions use the ed­u­ca­tion bor­row­ers have re­ceived to find the best can­di­dates.

It’s built a data­base of peo­ple look­ing to bor­row money to start or grow their com­pa­nies so a fi­nan­cial in­sti­tu­tion can fil­ter bor­row­ers by the cri­te­ria it deems a good credit risk.

Atikus then con­nects lenders with bor­row­ers in­di­vid­u­ally or en masse via SMS (Short Mes­sage Ser­vice: cel­lu­lar phone text mes­sag­ing).

Atikus uses a mo­bile in­ter­face that is easy to use, cost ef­fi­cient, and re­flects the way busi­ness is con­ducted in this mar­ket.

Mod­eled on one of her fa­vorite lit­er­ary char­ac­ter, At­ti­cus Finch in To Kill a Mock­ing­bird, Woska’s com­pany is ded­i­cated to fair­ness, jus­tice, and a rig­or­ous set a prin­ci­ples that it ap­plies to ev­ery­one.

Woska will pi­lot Atikus in Rwanda some­time in 2015. Help­ing her de­velop the mo­bile plat­form is In­fu­sion, which cre­ates dig­i­tal ex­pe­ri­ences and emerg­ing tech­nol­ogy so­lu­tions for ma­jor banks and in­sur­ance com­pa­nies around the world.

It also works with com­pa­nies that will trans­form th­ese in­dus­tries in the fu­ture.

As she pre­pares to launch her so­cial en­ter­prise, Woska is build­ing a buzz around the com­pany and rais­ing money. Atikus was named one of CNBC’S Hottest Start-ups of 2014. Woska closed its first phase of a seed fi­nanc­ing from friends, fam­i­lies and an­gels in 2014.

She is cur­rently work­ing on closing the sec­ond phase of seed fund­ing. In ad­di­tion, she is build­ing in­ter­est among ven­ture cap­i­tal­ists and in­sur­ance com­pa­nies who are likely to in­vest in later in­sti­tu­tional rounds of fund­ing.

To me, Woska is an­other ex­am­ple of why in­vest­ing in women pays off: They don’t just help them­selves, they help oth­ers. — Forbes

In­dian hair, renowned for its strength and tex­ture, has be­come a sought-af­ter com­mod­ity in africa.

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