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Press Release: DFS Lab Announces Investment in African Fintech Startups- Pezesha being one of them.

June 27, 2017 in Announcements

Source: Cision PR Newswire

Digital Financial Services Lab (DFS Lab) today announced it would invest $250,000 in four separate fintech startups that are building products that help low-income consumers in developing markets. Inclusive (based in Ghana), Pula (based in Kenya), Pezesha, (based in Kenya), and Teller, (based in the United States), were each selected for financing after presenting their products at DFS Lab’s Fintech BootCamp in Sri Lanka earlier this year. DFS Lab, which is funded by the Bill and Melinda Gates Foundation, seeks to identify promising entrepreneurs and invest in companies that focus on consumers in Sub-Saharan Africa and Asia.

Read the full press release by clicking here.

Sports Betting behaviour a common trend among low income borrowers in Kenya

June 8, 2017 in Trends

Pezesha is a Peer-to-Peer micro lending Marketplace that connects lenders with high quality underserved  low income borrowers by giving them choice, inclusion and affordable digital financial services that elevates their freedom, equality and hope to being part of the formal financial system.

Mobile credit in Kenya has left the poorest 40% of Kenyans behind – with penetration in this segment at less than 10% which prevents them from having the means to expand their micro-businesses and move up in their well being.

Pezesha solves this through taking a data-centric approach to giving loans to low income borrowers which traditional organisations and smartphone lenders won’t.

As such we are able to find rich insights from the behaviours of our customers.

What are the odds

One of the key findings has been the prevalence of gambling amongst low-income borrowers.

Each month, a high number are spending money at some of the most popular gambling companies in Kenya, often forming a major portion of their total outgoings. This exists across both both male and female borrowers, though is seen most with males.

What’s interesting is whether borrowers admit to having gambled.

From our data we are able to cross-reference whether a borrower self-reports their gambling with whether they actually do.

There could be many reasons why they do not self-report. Some may feel shame at undertaking gambling activities, whilst others may feel it is improper to mention in the process of applying for a loan.

In any case, the outcomes from this data make for interesting insights.

A losing streak

The impact of gambling on an individual and their family is large and overbearing.

People can get into a web of bad decisions where one bad bet follows another, and before long invaluable possessions are being sold to try and win back huge losses.

There are naturally huge psychological pressures that come with this, such as strains on familial relations and physical danger from inability to pay ones debts.

Indeed a behaviour we have observed is that of borrowers receiving money from financial institutions (i.e. loans) and within a few hours paying that same amount to a sports betting company.

Affecting repayment

When we run the numbers, we see how the level of gambling that an individual undertakes translates into a predictive element of whether a borrower will back.

Across our population of borrowers we see that:

  • No/ Low gambling: doesn’t affect repayment
  • Moderate/ High gambling: repayment is significantly worse

When someone is in the throes of gambling, or doesn’t fully appreciate the implications of betting in the broader picture of their lives, then undesirable choices and actions can often follow.The toil and pressures of betting consistently result in lower likelihood of a person repaying their loan.

Change needs to happen

Much has been written about the appeal of betting for those with low income, and at Pezesha we are seeking to help both through the work we do, and organisations we partner with.

In collaboration with other players in the market we have made it our responsibility to  offer education and training to low-income borrowers on the consequences that can arise from systemic gambling, the impact this can have on themselves, their families, and their businesses, and measures they can take curb their influence.

This gets to the heart of why Pezesha exists.

Our mission is to provide a peer to network marketplace of high quality low income loans to our lenders and  this can only be achieved if the people who are give credit to are in a position to repay.

Helping micro-businesses grow is not just in disbursing funds at an affordable rate, but also holistic lessons in how to build a better future. Hence why at Pezesha we are keen in building a strong credit ecosystem of quality low income borrowers by collaborating with other market players to join hands with us in building the future of banking that is inclusive to creditworthy and with responsible low income borrowers who have often been ignored and considered risky due to such gambling behaviours. We believe with the right foundation- education and value add services and products e.g. savings and financial training etc that could motivate the low income to save and invest responsibly for the long term then it puts them a step ahead on the formal financial ladder, meaning our vision for the future will be possible.

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Pezesha goes through DFS Sprint Bootcamp in Sri Lanka

May 4, 2017 in Fintech Events

The Pezesha team have just returned from a week in Sri Lanka after being invited to attend a bootcamp for innovative start ups looking to promote financial inclusion in developing markets.

The organisers were the DFS Lab, an organisation funded by the Gates Foundation to support and accelerate growth in companies promoting financial inclusion through digital means.

Pezesha was one of the seven who made it through the hundreds of applications, and joined start-ups from Ghana, India and the US.

The DFS Lab Bootcamp in Sri Lanka

Sprint methodology

Throughout the week we were undertaking a Sprint.

This is a five day process to identify and quickly test an idea that you have about how to improve your business.

We were had the help of the DFS team, and experts flown in from across the globe to assist in the process.

Over the week we identified our area of focus, brainstormed ideas, and tested our versions of these ideas with our customers. The feedback we got was invaluable, and guides us in how to Pezesha even better for them.

Going through the tasks for the day

The other six companies were great, working on a variety of hard problems in innovative ways. This ranged from from seed insurance for farmers, price comparison for SMEs and chatbots for banks.

Seeing the impactful results they were getting was incredibly inspirational.

Discussing feedback from our customer interviews

What we worked on

For Pezesha, we began by clarifying our core vision:

“Pezesha exists to give choice, inclusion and affordability to low-income borrowers in Africa to bring fairness, freedom, equality and hope”

Pezesha is a two-sided marketplace and for this sprint we decided to improve the way that lenders can fund our low-income borrowers.

We drew out how they currently interact with Pezesha, identified ways to improve it, and then began designing ways to test out ideas

Creating a business which works for customers is baked into our ethos, and so the idea of asking customers how we can make a service for them which they would love wasn’t too foreign.

We held interviews with our customers over Skype and took down feedback to understand the common themes, and areas with which we could make the most progress.

If you’re interested in lending money with Pezesha, and seeing what we come up with, then you can download the Pezesha app here 😉

By the end of the week we presented to the rest of the group what we had learnt and headed back to Nairobi with a solid plan to put our learnings into action.

Information on DFS Lab

We are incredibly grateful to DFS Lab for giving us the opportunity to work with them in growing Pezesha.

We’re pleased to say that we progressed to the next round of the funding application and so we hope to continue the relationship going forward.

If you, or someone you know, is a start up looking to improve the lives of others through increasing financial inclusion, then we’d thoroughly recommend you putting forward an application. All the details can be found here.