Pocket Money, a Singapore-based financial services firm, has announced plans to cement its presence within Africa’s lending sub-sector. The tech company recently launched a ‘marketplace’ that will allow otherwise rejected borrowers to access credit.
Company CEO and Co-Founder, Stefano Virgil said the new marketplace seeks to expand Africa’s financial ecosystem to have a real impact on financial inclusion on the continent.
In a recent announcement, he explained that the marketplace offers a multi-layered solution that ensures that the borrower is introduced to various potential lenders.
The marketplace has been described as a multi-faceted platform that incorporates simple and intuitive lender dashboard developed by Pocket Money allowing for efficiency in saving processing time and ease of access to borrowers wherever they may be.
The marketplace supports licensed lenders to ensure their sustainability by supporting some of their cash flow and liquidity challenges through loans made directly to borrowers, provision of third-party lenders and borrowers who use Pocket Money tools and borrowing money at low-interest rates and lending out at slightly higher rates for the service provided.
Over the past few years, Pocket Money has observed a proliferation of new fintech models, offering alternative financial solutions to the conventional set-ups, more so in the lending sub-sector in Africa.
“New horizons in the African financial industry are evident with new trends gaining strong traction especially through peer-to-peer (P2P) models-allowing such distinct niches as consumers, SMEs and other borrowers who were hitherto ignored by conventional lenders to access loans more efficiently and expeditiously via digital lending technology,” the company said in a statement.
However, financial experts have discovered that credit extension in Africa lags behind other regions, noting that while the ratio of credit is only 18 percent in Sub-Saharan Africa, comparable figures in South Asia and Latin America are 37% and 47% respectively.
To address this challenge, Pocket Money has come up with a marketplace that offers a multi-layered solution that ensures that the borrower is introduced to various potential lenders, offering more alternatives that provide the likelihood of a borrower to finally access the loan in the long run.
“Pocket Money, therefore, offers solutions to these challenges by innovatively using technology, expanding the financial marketplace and strategic social engagement that reduces the risk of default. These solutions include creating a unique socially enabled Pocket Money Credit Profile that addresses the challenges of credit scoring which is a common criterion used to access borrowers’ repayment risk,” Virgili explained.
He stated that the new marketplace seeks to expand Africa’s financial ecosystem and have a real impact on financial inclusion on the continent.
“Through this unique system that links an array of potential lenders to borrowers, we are able to create a larger pool of clients who will in essence provide revenue sharing with lending businesses located across the world while the borrowers can connect with lenders around the world, breaking the barriers that prevented them from borrowing money from a competitive global marketplace,” he explained.
“Conversely, tech partners can connect to Pocket Money network and develop apps to integrate with fintech solutions while investors can participate in the Pocket Money fundraising as well as the backing of new loans,” Virgili continued.
Currently based in Singapore, Pocket Money is now set on establishing its footprint in Africa, by paving the way for what the company says is “destined to be a unique credit-lending marketplace that will undoubtedly transform the continent’s lending sub-sector.”