Asaak Financial Services Limited (“Asaak”), a provider of mobile-based equipment financing for gig workers in Uganda, has entered into a $20 million credit facility with Cauris, Inc. (“Cauris”). Cauris is a global private credit investment firm that uses DeFi blockchain protocols to promote financial inclusion in emerging markets. The investment will be Cauris’ third in Africa.
Website
Geography
Uganda
Description
Founded in Kampala, Asaak provides asset financing to gig workers in Africa. The company estimates that drivers for ride-hailing companies generally spend approximately 50% of their earnings on rent costs for their vehicles, must return leased motorcycles each day contributing to significant commuting expenses, and have limited access to financing solutions.
To address this problem, Asaak uses its proprietary underwriting systems to offer drivers the chance to own their vehicles through its “boda” loans. Boda bodas are motorcycle taxis, which are a popular mode of public transportation in Uganda, and elsewhere in Africa. The company’s technology allows it to use thousands of data points from a prospective borrower, employ digital verification, and make a credit decision. The company is then able to monitor important borrower data points and use such data to support lending for tangential loan products such as fuel loans, personal loans and smartphone loans. Asaak’s loans are collateralized by the underlying equipment financed.
Asaak partners with international mobility companies, e-commerce platforms and credit unions such as Bolt, Safeboda and Jumia to keep its customer acquisition costs low and ensure borrower pool scale, reliable data for underwriting such as customer ratings, trips completed and money earned, and legal guarantees. The company has already provided thousands of loans with very low default rates. It has also experienced tremendous growth thus far in Uganda. The country ranks among the highest in the world in percentage of the population that is self-employed and nearly 40% of Uganda’s population is unbanked. This dynamic gives rise to the substantial funding gap for gig workers that Asaak is servicing. The company estimates that there is $100 billion in unmet demand for vehicle financing in the African ride-hailing sector. “We are excited to partner with forward-thinking investors like Cauris as we continue to scale our asset financing solutions across Africa. In a continent full of opportunity, mobility is the key to connect and bolster economies. Through this partnership, we’re enabling tens of thousands of individuals to become business owners, bridging the employment gap and driving local economies forward,” said Dylan Terrill, Co-Founder and Chief Business Officer of Asaak.
“We are happy to support Asaak in bringing innovative financing solutions to boda-boda drivers and other gig workers in Uganda. We recognize the immense importance of the gig economy in Africa and the significant need for tailored liquidity and financial solutions for this critical element of the continent’s economic activity,” said Azer Songnaba, Chief Investment Officer of Cauris.
About Asaak
Asaak is an African fintech company that provides asset financing to entrepreneurs across Africa. In 2019, they launched a motorcycle financing product for taxi (“boda”) drivers in partnership with the continent’s largest gig economy apps: Jumia, Bolt, and SafeBoda. Asaak is backed by American and African VCs such as Resolute Ventures, Social Capital, 500 Startups, HOF Capital, Catalyst Fund and Founders Factory Africa. For more information, visit https://asaak.com
About Cauris
Cauris is a mission-driven investment firm that provides private credit to financial technology companies in emerging markets. Working across the Global South — with financings in Africa, Asia and Latin America — Cauris partners with fintechs that are making financial inclusion a reality for tens of millions of consumers and small businesses. Through debt investments, Cauris enables its partners to scale efforts that provide the traditionally underbanked access to financial services that improve their lives and livelihoods. Leveraging Decentralized Finance (DeFi), Cauris aims to facilitate efforts that extend financial services to 100M people in line with its mission to empower individuals and small businesses through access to credit; to enable economic growth in emerging markets; and to accelerate the growth of the global middle class. For more information, please visit www.caurisfinance.com.
Source:medium.com