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Migo credit startup expands to Brazil with $ 20 million and Growth of Africa

After increasing its loan business in West Africa, the emerging markets credit startup Migo is expanding to Brazil in a $ 20 million Series B financing round run by Valor Capital Group.

The San Franicso-based company, formerly Mines.io brand, offers AI-driven products to large companies so that these companies can extend credit to consumers in an unbanked manner.

That generally means making lending services to low-income populations in emerging markets profitable for large corporations, where they once were not.

Founded in 2013, Migo was launched in Nigeria, where the startup now has the fintech Interswitch unicorn and the largest telecommunications company in Africa, MTN, among its customers.

Offering its branded products through partner channels, Migo has originated more than 3 million loans to more than 1 million customers in Nigeria since 2017, according to company statistics.

“The challenge of global social inequality is driven by the lack of access to credit. If we look at the middle class in developed countries, it is mainly based on access to credit, “Migo founder and CEO Ekechi Nwokah told TechCrunch.

“What we are trying to do is make prosperity available to all by reinventing the way people access and use credit,” he explained.

Migo does this through its cloud-based and data-based platform to help banks, businesses and telecommunications companies make credit decisions around populations that they could have previously avoided.

These entities integrate the Migo API into their applications to offer these market segments overlooked digital accounts and credit lines, Nwokah explained.

“Many people are trying to do this with small microcredits. That is the first place where you understand the risk, but we are becoming point of sale solutions”, he said.

Migo client customers can access their credit lines and make payments by entering a business phone number on their phone (via USSD) and then clicking on “Pay with Migo”. Migo can also be configured to use with QR codes, according to Nwokah.

He believes that structural factors in border and emerging markets make it difficult for large institutions to serve people without traditional credit profiles.

“What makes banks difficult is too expensive”, he said of establishing the infrastructure, technology and personnel to serve these market segments.

Nwokah sees similarities in unbanked and unbanked populations worldwide, including Brazil and African countries such as Nigeria.

“Statistically, the number of people without credit in Nigeria is approximately 90 million people and their approximately 100 million adults who do not have access to credit in Brazil. The countries are about the same size and the problem is more or less the same”, he said.

In clients in Brazil, Migo has a series of agreements in process, according to Nwokah, and has signed an agreement with a renowned partner in the South American country of 210 million, but has not yet been able to reveal which.

Migo generates income through interest and fees on its products. With the principal investor Valor Capital Group, Velocity Capital and The Rise Fund joined the $ 20 million Series B of the startup

Increasingly, Africa, with its large share of the world’s unbanked, and Nigeria, home to the largest economy and population on the continent, have become a testing ground for new companies seeking to create scalable financing solutions for emerging markets.

Migo could become a pioneer by shaping a fintech credit product in Africa with application in border, emerging and developed markets.

“We could really take this to the United States. We have had conversations with several partners on how to bring technology to the United States and Europe”, said founder Ekechi Nwokah. However, in the short term, Migo is more likely to expand to Asia.


Also published on Medium.

Published inStartups

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