TechInAfrica – Meet Bloom Impact – Bloom Impact is a digital marketplace that lets small business owners in emerging markets easily access financing for their business, like loans and savings, through their smartphone.
First of all, can you pitch us your company in just a few sentences?
Bloom Impact is a digital marketplace offering financial services to small businesses in Africa. Our mission is to empower small businesses to grow and offer employment by easing affordability & access to finance. Business owners apply thru our mobile App for a business loan, savings or payment account and our scoring algorithm connects them with the best suited financial service providers and products on our platform. We help many banks and financial institutions cut costs and risks and grow their customer portfolios by digitally connecting them to SMEs that meet their requirements.
Can you tell us more about yourself, your personal background, your experience and how you went to this journey?
Co-Founder & CEO Carol Caruso, is an expert in emerging markets and financial inclusion. For over a decade, Carol has had extensive experience launching mobile apps, online platforms, mobile payments, agent networks and working with dozens of banks and fintech companies. Prior to Bloom Impact, Carol was the Senior VP of Digital Channels at Accion International, leading a team of digital finance experts consulting financial institutions and fintech firms across Africa. Carol is also currently the Social Innovator-in-Residence at Harvard Kennedy School supporting social impact startups. Co-Founder & CTO David Hutchful, is an expert in mobile apps, software development and human-centered design (HCD). David designs Apps that are well informed by the nuances of the African market and Bloom’s target audience. He has had experience leading technology teams on 3 continents, having previously worked as the Director of Technology Innovation for the Grameen Foundation and as co-founder of engageSpark, a social impact messaging service. David is also currently teaching HCD at Ashesi University in Accra. Carol and David came together to combine their knowledge and know-how to address the significant problem of unaffordable, inaccessible and inconvenient access to finance which hinders growth for the small business sector across Africa.
Can you tell us more about Ghana? Why this market?
We address the problem of access to finance for MSMEs (Micro, Small, Medium Enterprises) and Employment. Small businesses in emerging markets consistently cite “Access to Finance” as their greatest challenge for growth. We are focused on addressing this issue across Africa, we’re currently in Ghana and now expanding to Nigeria. These businesses are the foundation of the economy and their success is directly tied to a nation’s success. SMEs contribute 70% of GDP in Ghana, and account for 92% of the businesses in the country. Despite their significant number, small businesses face a massive finance gap, even though Ghana has 400+ financial service providers. Much of this exists because traditional lenders are hesitant to lend to small businesses, due to costs, reach and risks. While there is a growing finance gap, smartphone usage in Ghana and Nigeria has increased so that almost every small business owner now has access to a smartphone. Reducing the perceived risk for these traditional lenders and introducing underbanked SMEs to the formal banking sector is the key problem we are trying to solve.
We offer a simple to use smartphone-based marketplace where business owners easily learn about & access affordable financial services at their convenience. By digitizing access to financial services, we make it significantly easier & faster for business owners to apply for banking products. We also provide financial education and literacy through our app, such as offering access to Credit Reports and educating users about basic banking products and their terms and conditions.
What are the main issues you have been facing at Bloom Impact?
In the past 9 months we have seen tremendous growth in SME demand for our service with increasing downloads of our Android App and applications being submitted for business loans or savings accounts. So we are often challenged to keep up with a wide enough supply of products and geographic coverage. We partner with banks and other types of financial institutions providing them new, verified, qualified SME customers by matching their products to customer needs – helping thousands to date. These partnerships require understanding of and integrating with their processes which we have been able to achieve with many partners. But with certain financial institutions, it’s a challenge and negatively affects turn-around-times because the institution isn’t run efficiently, has inconsistent policies and procedures or has taken on too many initiatives for it’s capacity.
Additionally, some financial institutions have a low risk tolerance to work with small businesses and hence require, oftentimes burdensome, requirements that are difficult for even a healthy business to meet. Trust for example is low in Ghana, hence asking business owners to put forth a guarantor is not realistic for many, despite having a healthy business – there are too many burdens put on that Guarantor. Oftentimes loan requirements are so high that if one is able to meet them they wouldn’t need a loan in the first place. Changing the banking mentality is critical for many traditional institutions in order to stay relevant in the years to come.
Who are your main competitors around ? And outside of the country, who are your inspiration ?
We focus on working capital, asset financing and other types of business loans as well as savings & payment accounts for businesses. Telcos and many digital startups are focused on salary loans, consumer banking or even nano-credit loans – we could partner with them to provide leads for nano-loan sizes, providing interest rates aren’t abusive. If a traditional financial institution isn’t on our platform we could consider them as competition but our process is fully digital and they are usually working with many manual and traditional approaches so we hope to have more of them join our marketplace so we can help them grow and operate more efficiently.
What is your point of view, as a startup founder, about Ghana ?
The government has been driving the need to support SMEs which has helped us partner with many financial institutions looking to expand in this sector. In places like Accra & Kumasi there is also a strong entrepreneurial spirit along with hubs and organisations providing support along with a drive to build technology skills and innovation.
Is it hard to find investors there?
The angel investment community is thin and not very active but there are a growing number of new VCs that work in Ghana & Nigeria looking to invest in Fintech and strong startups in general.
What do you think is lacking to Ghana to develop it more? What are the main barriers to develop a startup there?
Ghana needs more early stage, Seed investors, committed to helping startups grow and willing to take risks similar to the risks non-African investors have been taking. Whilst the startup scene is growing and the entrepreneurial spirit is high, there is also a lack of infrastructure from finding qualified talent to affordable office space that can create a barrier to growing the innovation and startup space.
As you know, we are always on the look of great startups, new products and amazing entrepreneurs, could you name a few locally or regionally in Ghana ?