Standard Bank and banking technology company JUMO have partnered to launch an innovative new financing solution that will enable entrepreneurs in Uganda with limited access to funding to receive credit to grow their businesses.
The initiative will have a positive spill-over effect in their communities through job creation. An annual survey of entrepreneurs who use JUMO’s platform to access financial services shows that 50% of micro-SMEs employ at least one other person.
This joint financing initiative is a bespoke asset-backed securitisation (ABS) solution, which gives entrepreneurs instant access to lower lending rates on their mobile phones.
This ABS debt-financing methodology has the potential to be replicated across a number of geographies and markets in which both parties operate. JUMO’s intelligent banking technology platform, backed by AI and machine learning, will ensure capital invested into the ABS structure is accessible to a new class of financially excluded customers. As senior facility provider, Standard Bank can benefit from articulated recovery value and recovery timing that’s well protected through credit enhancement mechanisms.
“This landmark transaction is the first milestone in developing a strategic relationship with JUMO in providing unbanked micro businesses and individuals across Sub Saharan Africa with access to finance” said Justine Crommelin, Senior Vice President of Debt Capital Markets – Securitisations at Standard Bank. “We are really proud to work with Standard Bank in another exciting first for Financial Inclusion! This partnership delivers on the growing worldwide demands for ESG investment opportunities and demonstrates the power of financial technology companies partnering with banks to grow financial inclusivity and social impact in Africa,” said JUMO founder and CEO Andrew Watkins-Ball.
Standard Bank is at the forefront of driving sustainable economic growth and human development in Africa where it has a footprint in 20 countries.
Trading as Stanbic Bank in Uganda, it participates in the ABS structure as sole arranger and senior lender. The ABS structure is a powerful financing tool that facilitates returns for investors, ecosystem growth and financial inclusion.
“This solution has unlocked a supply of local currency for JUMO, enabling the company to grow its lending presence in Uganda on more sustainable terms,” said Nicholas Gunning, Executive, Head Securitisation, Debt Capital Markets at Standard Bank.
“Our intention is to replicate this solution in other African regions where we overlap with JUMO, thereby contributing to the development of local financial markets, mobilising local currency financing and enabling JUMO to achieve greater economies of scale in a shorter time period.”
It’s estimated that this transaction will assist over 500 000 clients in Uganda, a portion of which will be first time borrowers.
JUMO offers savings and credit products to entrepreneurs in emerging markets, as well as financial services infrastructure to partners such as eMoney operators, mobile fintech platforms and banks.
“The fintech ecosystem continues to be a major focus for Standard Bank, which has been consistently supporting the growth of key players in the lendtech, connected finance, payment processing, remittance and ecommerce subsectors through a number of innovative financing transactions, thereby promoting financial inclusion across the African continent,” said Jiří Chotěborský, Executive Vice President, TMT, CC, Telecoms, Media & Technology.
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