FairMoney to recreate Nigerian growth story in India

FAIRMONEY, A LICENSED NIGE RIAN online lender that provides instant loans and bill payments to underserved consumers in emerging markets, is on its way to further tap into the over 1.7 billion underbanked people globally, by establishing a firm base in India, Asia’s second-most populous country.

The fintech platform which offers loans ranging from

1,500 ($3.30) to 500,000 ($1,110.00), and its longest loan facility standing at 12 months, describes itself as “the mobile banking revolution for emerging markets.” In its first year of operation it had little over 100,000 users, and three years down the line of launching its mobile lending services in Nigeria, it is basking over its 1.3 million unique users who have made more than 6.5 million loan applications,

Upon its expansion plans six months ago, the company stated it had processed over half a million loan applications from over 100,000 unique users, with the number trickling down to 5,0006,000 loan applications daily, with APR standing at 12-36%, which Laurin Hainy, CEO and founder of FairMoney says it has achieved with zero ads spendings or marketing. The company said that by the end of 2021 it is already projecting a $300 million loan disbursement volume.

Before expanding, FairMoney experienced exponential growth in Nigeria in terms of loans disbursement. It even disbursed a total loan volume of $93 million in 2020, which represents 128 per cent increase from 2019 and a staggering 3,189 per cent growth rate from 2018, its first year of operation.

The platform then hopped on data-driven insights it spotted which stated that was a close similarity between the Indian and Nigerian markets, where 36 per cent of adults have access to credit, leaving an untapped market of about 141 million people microfinance banks do not serve, as the motive behind its choice to chase India’s market, although unlike Nigeria, India has better unit economics for the lending business and a more friendly regulatory environment.

Hainy also said, “If our ambition is to build the leading mobile bank for emerging markets, we need to start with very large markets. We tested our products in 10 different markets checking out for things like what the yield economics is like, NPLs, cost of risk, customer acquisition cost, cost of infrastructure, and India stood out to us.”

International expansion for African-based start-ups more often goes with huge challenges, mainly due to the daunting logistics behind it, and especially if the start-up intends to expand outside the shores of the continent. But in spite of this, quite a few startups have been able to take up this task-take for example Nigerian fintech, Paga with 15 million users and a network of over 24,000 agents, which acquired Ethiopian software company Apposit to hasten its expansion into Ethiopia and Mexico.

FairMoney on its part is trying to tow a similar line by hiring the services of Rohan Khara, former head of product for financial services for Indonesian super app Gojek, who also held senior roles at Microsoft, Quikr and MobiKwik, to tap into his wealth of experience in building consumer products in large emerging markets — as he did in India and Indonesia, as leverage to help perk its platform in India.