How project with London, NY financier led to JUMO serving 15m credit, saving users [Q&A]


Earlier this month fintech startup JUMO — which was founded by SA entrepreneur Andrew Watkins-Ball in 2014 — celebrated a new milestone, having helped connect over 15 million people to credit and savings in their six markets in Africa and Asia to date.

The startup, which is registered in Mauritius, helps facilitate digital financial services such as credit and savings in emerging markets.

In a statement on 5 November JUMO claimed it has helped disburse over $1.6-billion in funding to small and micro enterprises and is growing its base of savings products.

JUMO currently partners with financial service providers and mobile network operators to provide credit and savings solutions in Pakistan, Ghana, Tanzania, Uganda, Kenya and Zambia.

The company plans to enter new markets in Asia and Africa in the coming months.

In this Q&A, JUMO’s director of corporate affairs Susie Squire (pictured above), explains how the idea for JUMO first came about, how the startup earns revenue and which mobile operators and financial sector providers it works with (the company’s media liaison told Ventureburn that Watkins-Ball was not available for a telephonic interview — Ed).

Squire declined to detail what share each shareholder has and what kind of return JUMO has so far generated for investors.

How did the idea for JUMO first come about? 

Between 2000 and 2007 JUMO founder and CEO Andrew Watkins-Ball worked with Salomon Brothers Leveraged Finance business in London and New York to develop a new strategy for the bank.

Looking at ways to invest in high growth (but less developed) financial services environments, he found that while banks were sitting on large amounts of capital, the majority of people in emerging markets had no access to even the limited investment needed to start a small business. This brought him to two important realisations:

There was lots of capital available to reach new customers, but serious constraints in how to reach them sustainably.

This unbalanced access to capital, especially for micro and small enterprises is the number one barrier to economic development for a lot of emerging economies.

Andrew believes financial access has only ever been a problem of limited information and unsuitable unit economics, not a financial risk problem. In founding JUMO, he set out to solve these problems using data and technology.

What does JUMO stand for (is it an acronym?)?

The name JUMO is not an acronym, it evolved from the words “just mobile”, but the company is far more than just a mobile financial services solution.

It is a full technology stack for building and running financial services for emerging market customers, using any interface.

How does JUMO earn revenue and what is the fee structure you charge clients?

JUMO’s partners use our technology stack to offer savings, lending and insurance products (in the pipeline) to entrepreneurs in emerging markets.

JUMO’s advanced data engine, end-to-end banking technology and flexible operating platform work together to create ultra-lean infrastructure that delivers financial services at a fraction of typical banking costs.

Revenue is generated from the fees charged on the platform which is then shared between all partners in the ecosystem.

What are some of the company’s biggest operating costs?

Being a geographically dispersed company with offices in 11 different countries has its challenges.

JUMO’s facilities, manpower and travel costs require careful management and the company is learning to strike the right balance between hiring the right skills in the right places at the right time, selecting optimal travel opportunities and implementing policies or trialling progressive ways of working that can contribute to reducing opex, such as our remote working policy.

When it comes to resource and capability planning, we are at heart a data-driven organisation and we use key metrics, which the entire company is aware of, to examine operational efficiency on a regular basis.

This allows us to make changes where necessary, driven by the changing requirements for delivering in our markets.

How many financial sector providers and mobile network operators is JUMO currently working with?

For loans built and run by JUMO, these are:

  • Qwikloan via MTN and Letshego (Ghana)
  • Xpressloan via MTN and Ecobank (Ghana)
  • Kopa Cash via Airtel (Kenya)
  • Easypaisa via Telenor and Telenor Microfinance bank (Pakistan)
  • Nivushe via Tigo (Tanzania)
  • Timiza via Airtel (Tanzania)
  • Wewole via Airtel (Uganda)
  • Kasaka loans via MTN and Barclays Africa (Zambia)
  • Na Sova via Airtel (Zambia)

For savings built and run by JUMO, these are:

  • Timiza Akiba via Airtel (Tanzania)
  • Kasaka savings via MTN and Barclays Africa (Zambia)

How big is the market that JUMO is currently operating in?

JUMO currently has 120 million people under integration. The International Finance Corporation (IFC) estimates that 40% of small and micro enterprises in the formal sector in developing countries have an unmet financing need of $5.2-trillion every year.

While there are a number of companies using alternative data for credit scoring, JUMO’s approach is unique in that instead of seeking to disrupt incumbents, we’re working to enable local players to be more efficient.

Through this model, we are able to offer credit products at around 2c per dollar disbursement and we’re operating at roughly one fifth of the cost for fulfilment that a bank would. This makes JUMO’s model compelling for banks.

JUMO has raised over $91-million over eight rounds, according to Crunchbase. Where has the money gone to all?

JUMO’s investors have helped fund expansion into new markets, attract and retain key talent, improve the engineering capability, and test product and business model innovations.

Much of JUMO’s investment has come from development finance and social impact institutions who have provided capital to support the company’s mission to extend finance to entrepreneurs and individuals in Africa and Asia who have been largely excluded from formal financial systems.

What return have investors received so far on their investment and what return are they ultimately expected to see?

Goldman Sachs, Proparco (the private sector financing arm of the French Development Agency AFD), Finnfund, Gemcorp Capital, Leapfrog Investments, Vostok Emerging Finance, Athena Capital and Odey Asset Management are some of the principal investors in JUMO.

Due to confidentiality agreements we are unable to disclose information on returns.

Who currently are the biggest shareholders in the business and what stake do each have?

Due to confidentiality agreements, we are not able to comment on this question.

How have you sought to source, attract and retain good talent? 

The startup environment is a fast-paced one that demands high performance from exceptional people who can be focused, flexible and are comfortable with change.

The talent acquisition team at JUMO works hard at attracting and retaining critical expertise in our core business areas.

On the whole, we have found that what really works for us is building small, highly specialised teams that work across a flat structure.

Like most businesses, JUMO uses sourcing and attraction tools, but these don’t mean much without a compelling employee value proposition.

At JUMO this starts with culture, knowing who we are and who we want to be and then communicating that coherently to the external market.

What have been some of the biggest challenges that the business has faced? And what lesson does this hold for other startups?

Doing business in emerging markets that are new to fintech products and services is challenging. Evolving regulation, consumer education and infrastructure pushes us to constantly seek new ways to build and grow our business.

As a five-year-old company, JUMO continues to learn to navigate existing and new markets, and we’re fortunate to share the learning experience with our incredible partners who have been navigating these markets for decades.

These challenges force us to be creative in finding solutions and to adapt our approach to solve particular pain points in specific markets, while appreciating the underlying nuances of different countries, cultures and people.

The results speak for themselves. We have served 15 million customers across Africa and Asia and are continuing to grow our reach.

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Read more: JUMO’s $12.5m deal from UK investor, brings funding raised to $64.5m in 2018
Read more: SA fintech JUMO closes $52m round led by Goldman Sachs
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*Correction: Subsequent to the publication of this article, JUMO said it had misstated the mobile partner for its Timiza Akiba savings product in Tanzania, as MTN and Letshego — when it is in fact Airtel. We have updated the article to reflect this correction.

Featured image: JUMO director of corporate affairs Susie Squire (Supplied)



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