Danish startup GrowthBond uses Facebook to help micro-entrepreneurs in Africa
In Africa millions of people log into Facebook every day looking to socialize and escape from the stress of work, but for many of those people Facebook is the actual workplace. Facebook is no longer just a place to share pictures of cats, but a flourishing network of thousands of entrepreneurs using the platform to take advantage of the rapidly growing e-commerce market in Africa.
The low start-up costs and an established user base mean that Facebook is the first choice for small merchants who want to reach a wider and increasingly international audience beyond their traditional local market. Today, millions of Africa’s online retailers, selling everything from shoes and clothing to cars, run their entire business through Facebook.
However, the challenge for these entrepreneurs is to get access to the capital required to reach and serve their new enlarged audience. The traditional banking system for small entrepreneurs in less developed economies is limited by time-consuming assessment processes and high-interest rates. It is hard for big banks to deliver loans on less than a couple of hundred thousands of dollars. Banks generate a lot more revenue on the larger loans, so they tend to avoid the smaller loans.
That’s where GrowthBond comes in. GrowthBond is a platform designed to automate the credit assessment process for small business owners, cutting waiting times by weeks, reducing loan operating costs, and slashing minimum loans from thousands to hundreds of dollars. The problem in loans to small businesses has never been repayment rates, but rather the costly and inefficient methods of assessing, delivering, and charging repayments on loans. In addition to helping with financing, GrowthBond has a marketplace of internet marketing experts to provide technical and business support to help the small business owners get up and running with ads on Facebook and other social platforms.