🗞 Fast and easy loans for millions of Africans

The listed fintech company Mybucks wants to create financial inclusion in Africa - by mobile phone.

The company headquarters in Luxembourg, most employees in South Africa, listed on the Frankfurt Stock Exchange: The fintech company Mybucks is very well positioned internationally. With European technology, a very small-scale market is to be served, in which customers sometimes get bad loans: the Southeast African region of Kenya to South Africa. "We're creating financial inclusion in Africa," said vice CEO Timothy Nuy.

When Mybucks started in 2011, it was about providing customers with loans faster with the help of the mobile phone. Three years later, the company expanded the technology by using more data to serve previously excluded consumers. Nowadays they promise payouts within two minutes.
The challenge is that many African customers have no credit experience and history. There aren't any public credit offices keeping records of credit customers . "That's why you have to rely on alternative data," says Nuy.

The Mybucks technique can evaluate the SMS history of a mobile phone user and draw conclusions about the creditworthiness. "Credit losses remain our biggest risk," says Nuy. Therein the business resembles the traditional banks. Mostly it is about loan of the equivalent of 5 to 100 euros. Microfinance providers and credit institutions are the main competitors, and in more developed economies, such as Kenya and South Africa, the company also competes with other fintechs.

Mybucks currently does not think about expansion, although there are needs in many Asian and Latin American countries. First, the supply in the twelve African countries should improve. "The technology runs in English and is scalable," says Nuy. Currently, the distribution of mobile phones in many countries reaches 80 percent. Only 4 to 6 percent have a smartphone. Thus, the mobile payments are transferred with numerical codes via SMS.

The stock price of Mybucks is like a roller coaster ride. After the stock market launch in June 2016, the price climbed to 19.10 euros. Since then he has fallen by 48 percent. After the dip in December, it went up again by 24 percent. Currently, the stock stands at around 10 euros.

The two analysts watching the company recommend a buy and set their target prices at € 16.90 and € 22.50. "We had expected more in the past three years, but smartphone penetration is lower than expected," says Nuy. The company now wants to clearly outperform the average growth rates of 30 percent in recent years.

Source: Reuters, dpa

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