Posted on October 26, 2023

Read the original on my blog: The Higher Purpose Venture Capital Blog

Enabling financial institutions to provide credit to the unbanked in South Africa

Company: Akiba Digital enables lenders, banks, fintechs, and retailers to quickly extend credit, Buy Now, Pay Later, and cash advances through their lending-as-a-service platform.

HQ Location and Year Founded: Johannesburg, South Africa, 2019

Founder: Tebogo Mokwena, co-founder and CEO, is an entrepreneur and technology enthusiast who is passionate about solving African problems. With a background in software development, Tebogo has been a digital consultant at McKinsey & Co. and has also led a non-profit organization in South Africa. She was previously CTO at Akiba Digital and transitioned to CEO in 2020. Tebogo received a bachelor’s degree in computer science from the University of Cape Town and a master’s in computational science and machine learning from USI in Lugano, Switzerland.

Funds Raised and VC Investors: $3 million from Alumni Ventures, Expert DOJO, Flori Ventures, Hustle Fund, LoftyInc, Oui Capital, and others.

Where did the idea for Akiba Digital originate?

The idea of Akiba Digital originated from the founders’ personal challenges accessing affordable financial services from banks. At first, the founders wanted to build a digital bank to ease access to such services. However, due to regulatory challenges, they later pivoted to build a business that enabled banks (and other lenders) to better deliver financing, especially for underserved and credit-thin customers like small businesses and sole proprietors (individual merchants).

What is the key problem that Akiba Digital intends to solve?

We are solving the challenge most African consumers have, which is access to affordable capital quicker from legitimate lenders like banks, who often struggle to assess the creditworthiness of unbanked and underbanked consumers.

What are the company’s key accomplishments to date?

So far, Akiba Digital has managed to build an alternative score tested with over 50,000 borrowers and achieve direct sales of over $1 million in revenue without having to spend on marketing.

What lies ahead in the plans for Akiba Digital?

Akiba Digital has the ambition to enable 25 million new borrowers in Africa over the next 5-7 years, and to achieve this, we have refined a low-cost, high-volume distribution model to allow us to enter three new markets within 12 months. Two of the three markets are already confirmed.

Ron’s Take

Akiba Digital provides the tools and infrastructure for banks, fintechs, and other financial institutions to enable more people to purchase the items that they need when they are needed. For those with limited income and without an established credit score, this can be a true lifeline. The companies offering credit rely on the piping to make this happen. Akiba is taking the lead in sub-Saharan Africa, where the opportunities for extending credit to new customers open the door for vastly more transactions and empower buyers who were previously disenfranchised from financial tools that are taken for granted by much of the world.

Disclaimer: Alumni Ventures has made investments in Akiba Digital in 2021 and 2023.