Acumen announces its new investment in First Access, a data analytics company improving access to formal financial services for low-income East African communities. In East Africa, only 22 percent of the population has access to formal financial services with the region’s poor having even less at 10 percent. First Access presents an opportunity to increase the ability of these low-income communities to save, manage risk responsibility, invest in such critical services as education, and ultimately rise out of poverty.
Using a combination of financial and mobile data, First Access has created a platform that can predict credit risk, segment customers, and automate credit decisions to helping financial services reach more people at a lower cost while reducing the risk of lending and borrowing in informal markets.
“This investment is a first for Acumen within the financial services sector and highlights the importance access to credit plays in empowering individuals as they work towards raising their incomes and living standards,” said Acumen East Africa Director Duncan Onyango.
First Access aims to change the perception that lending to low-income communities is risky. Its proprietary algorithms and data analytics empower microfinance institutions and other financial service providers to make better lending decisions while reducing the cost of evaluating and servicing smaller loans.
“First Access is thrilled to have Acumen as a partner because of its deep experience with business models designed to reach underserved populations, its continuing status as a real pioneer in tackling entrenched problems, regardless of whether they’re trendy, and its prowess in attracting resources, expertise and talent from its unparalleled global audience,” said Nicole Stubbs, co-founder and CEO of First Access.
Acumen invested in First Access alongside The Social Entrepreneurs’ Fund, Nigel Morris, co-Founder of Capital One Financial Services, Accion Venture Lab and Golden Seeds. Acumen would also like to thank David Lyons and the Quadra Foundation for their support of out work in Tanzania, the African homebase of First Access.
Since 2007, Acumen has invested over $35 million across East Africa, focusing on a wide range of sustainable, scalable businesses—in agriculture, housing, health, water and energy—that use market-based approaches to deliver products and services to millions of low income people from both rural and urban communities. Acumen’s recent investments in the region include Miliki Afya, a low-cost, high-quality healthcare provider in Kenya, Mekelle Farms, Ethiopia’s largest producer of day-old chicks, and KZ Noir, a Rwandan specialty coffee producer that sources its coffee from more than 10,000 smallholder coffee farmers.