Egyptian fintech startup Cassbana, which builds financial identities for the underserved and unbanked communities, has scaled rapidly, and has already provided more than 10,000 loans across 14 cities.
Founded in June of last year, Cassbana uses machine learning and AI to offer financial identities for underserved and unbanked consumers, with its technology and data, sourced through an Android app, offering financial institutions and companies the opportunity to create innovative lending and financial support solutions by analysing consumer behaviour patterns.
The company initially launched its services on a trial basis with one service provider in Cairo, but in one year has now facilitated 10,000 loans across 14 cities, with a 1.6 per cent default rate. Haitham Nassar, founder and chief executive officer (CEO) of Cassbana, believes the startup is building a behaviour-based scoring system and smart data analysis scheme that is the future of data-based financial advisory.
“By developing mobile technology and data science algorithms, Cassbana disrupts the way financial identities are being built within the modern financial sector. The main goal of Cassbana is to reach and penetrate underbanked segments in growing markets in MEA, through using alternative data, network behaviour and instant credit,” Nassar said.
The startup raised a US$1.4 million pre-seed round earlier this year, and is planning on starting a new round later this year. The overall goal is to tackle a major problem.
“Globally, almost two-thirds of adults without an account at a financial institution said that they have too little money to use one. Over five billion people around the world own and use a mobile phone, while 1.7 billion adults have no access to financial services,” said Nassar.
“One in five of them blame the fact they are unbanked on the inability to provide personal information, demonstrate a credit history or account for their financial behaviour. Banks and other financial institutions still rely on the collateral-based scoring system or KYC, and aren’t positioned to meet the capital needs of the underserved due to lack of financial data on these populations.”
Due to this, 77 per cent of 65 million Egyptians remain unbanked and financially underserved. Cassbana is here to fix that.
“We enable individuals and businesses by giving them access to useful and affordable financial products and services that meet their needs, delivered in a responsible and sustainable way with a steady focus on constant embedding of financial literacy at the heart of each offering, product and service,” Nassar said.
Cassbana has ambitions beyond Egypt, however, and plans to begin expansion into other markets within the Middle East and Africa with similar inclusion problems next year. The startup, which monetises via revenues on interests rates and is already turning a small profit, knows it has competition, but believes it has an edge.
“Fintech is a hot space now, and there is noise everywhere, so the challenge is always to keep your focus on your customers, not on the competition or noise,” said Nassar.