FLOW LIQUIDITY ENGINE

The problem we address is the lack of financing for MSMEs. The financing gap in developing and emerging markets is valued at $5.2 trillion globally and $4.87 billion in Uganda - one of our markets - alone. Micro enterprises, which make up 96% of credit-constrained businesses, face the greatest challenge. Many micro-enterprises are small retail merchants. Our analysis of over 110 million retail transactions reveals a pressing need for working capital in high-growth digital activities, such as mobile money. With 1.6 billion registered mobile money accounts globally and 763 million in Africa, mobile money relies on retail merchants as the interface for cash to e-money conversion. However, capital and cash flow constraints prevent merchants from meeting the growing demand for digital transactions, resulting in rejected transactions and lost revenue. As merchants must prefund transactions by purchasing e-money ‘float’ from aggregators or mobile network operators, about 20% of transactions are denied due to insufficient e-money working capital. This constitutes not only a problem for the mobile money merchants as they lose commissions but also for their customers as bills can’t be paid, money can’t be sent or withdrawn or other essential financial transactions can’t be performed. This is specifically relevant in emerging markets, as mobile money is the dominant financial channel and retail payment system in emerging markets with 19% YoY growth in terms of users and 14% YoY growth in terms of transaction volume. Hence, our solution focuses on providing working capital and liquidity management solutions in the form of e-money, and float switching capability (inventory switch) specifically for mobile money agents.

The Flow Liquidity Engine* (FLE), our proprietary technology platform, was built specifically to enable small merchant financing at scale and is key for managing our business. The FLE addresses all use cases for customer-centric liquidity provision and management to small merchants:

The Loan Management System automates the end-to-end lifecycle of working capital loans, handling everything from application processing to disbursement management, while ensuring regular reconciliation and effective risk management. For operational support teams, our platform offers robust Operations Management Tools, providing real-time reports on portfolio performance, quality assessment, and in-depth analytics to aid decision-making processes.

Client assessment: we can KYC mobile money agents -origination and profiling - through data analytics of their mobile money transaction data in terms of number of customers and number and value of transactions. 

Product development: our platform designs e-money/float advance products based on the business data of the mobile money agents. This way we ensure that the product fits the business needs of the merchants and advances are neither too high nor too low and catalyzes the full business potential.    

Client decisioning: FLE assesses eligibility of potential customers by scoring them and assessing the risk. Our credit scoring system utilizes advanced AI and ML algorithms to generate customer credit scores by analyzing business transaction data, repayment histories, and revenue growth potential, thereby enabling more accurate risk assessment. Additionally, Flow follows up any tech analysis with in-person client interviews and onboarding processes.

Client management: The platform helps our staff in terms of onboarding, disbursements, collections, loyalty programmes, nudges. See below for more details 

The Flow field force app equips our field officers with a comprehensive CRM tool that assists in lead management, customer onboarding, and retention. It includes features such as sales pipeline tracking, automated KYC verification, loyalty programs, risk identification, and customer engagement tools.

Our customer app is specifically for mobile money agents and enables them to request and repay Flow e-money advances, ask for product upgrades and switch e-money between mobile network operators - a solution which is unique in our ecosystem. This is very helpful for them as it helps them to more efficiently manage different products inventories for there business and offer more choice to end customers. 

Together, these modules form a cohesive ecosystem aimed at enhancing efficiency, reducing risk, and driving sustainable growth within the financial services landscape.

Flow empowers mobile money agents, primarily women, rural, and youth micro-enterprises in Sub Sahara Africa and other emerging markets, with instant e-money working capital, driving their economic growth. Today, 68% of Flow's customers are rural, and 75% are youth. Additionally, Flow prioritizes women entrepreneurs, with 47% of its customers being women. Flow's proposition removes barriers such as collateral and mobility, enabling 92% of women borrowers to access formal loans for the first time, resulting in improved financial stability and economic independence. To date, the company has disbursed over USD 40 million to 6,450 women-led small businesses, with women borrowers exhibiting better repayment behavior.

There are more than 10 million agents in SSA which Flow targets and today are excluded from access to finance as they don't meet traditional financing criterias such as collaterals.

Additionally our services to these mobile money agents enable the digital ecosystems in our markets enabling end customers to be able to do digital transactions. 

The dedicated team behind Flow, a group of individuals driven by a shared mission to revolutionize the mobile money landscape and empower underserved communities.

Nitin Garg, our Founder, has over 14 years of expertise in consulting on digital finance. His extensive portfolio includes advising over 40 financial services providers on digital finance operations and product development, with notable clients such as Equity Bank (Kenya), Standard Bank (South Africa), and BanColombia (Colombia). Nitin's contributions extend to prestigious organizations like the World Bank, UNCDF, and MicroSave, earning him recognition from the UK Government as Exceptional Tech Talent. Nitin's commitment to driving innovation for global financial inclusion is underscored by his academic background, with a Post Graduate Diploma in Management specializing in Finance and International Business.

Michael Rothe, another founder, brings over 11 years of experience in microfinance and inclusive FinTech. His journey began at Citigroup's Inclusive Finance unit, where he conducted risk assessments of microfinance institutions. Subsequently, Michael spent four transformative years at the Central Bank of Uganda as a resident adviser on digital finance regulations. Witnessing the exponential growth of a previous FinTech startup, where he played a pivotal role in scaling customer acquisition from 15,000 to 320,000, ignited his passion for driving impactful change. Michael's insights and expertise have been sought after across numerous African markets, where he has actively shaped FinTech landscapes and influenced policies.

Geoffrey Acini, our Country Manager in Uganda, brings over 7 years of experience as an innovator in FinTech. His entrepreneurial spirit led him to successfully launch and scale businesses in the transport and construction sectors before transitioning to the digital finance space. Geoffrey's expertise in managing operations and catalyzing digital payment acceptance for shopkeepers has been instrumental in driving adoption and fostering growth. His commitment to advancing socioeconomic development in his community is evident through his academic pursuits, with a Bachelor's degree in International Business Relations & Diplomacy from Nkumba University Uganda.

Praveen Saldhana, our COO, boasts over 16 years of experience in mobile money distribution across East Africa. As the former COO of Simba Telecom, the largest distributor for MTN in Uganda, Praveen played a pivotal role in driving mobile money growth in the region. His strategic acumen and operational prowess have been instrumental in navigating the complexities of mobile money ecosystems. Praveen's leadership is grounded in a deep understanding of the needs and challenges faced by mobile money agents, making him an invaluable asset to Flow's mission of driving financial inclusion at scale.

Together, our team's diverse backgrounds and expertise converge to tackle the challenges faced by mobile money agent networks. With a shared vision and unwavering dedication, we are committed to creating lasting positive impact in underserved communities.

We at Flow have developed the Flow Liquidity Engine, an end-to-end platform for small business finance. This comprehensive solution includes a backend with core functionalities like digital lending, KYC checks, analytics, risk management, product development, loan management, and payments. Additionally, there's a field app to empower the field force of Flow, making it easy and transparent to onboard new customers. Finally we have built a merchant-facing app for front-end use which helps small merchants to access working capital when they need it. 

Since its inception, Flow has disbursed over 410,000 loans, totaling more than $95 million USD. There are almost 15.000 registered customers in Uganda, Rwanda and Madagascar while close to 9.000 are active. Flow is provider agnostic and live in 11 ecosystems with major telcos (e.g., MTN, Airtel, Orange) in Africa.

In addition, Flow has introduced the unique "Switch" product, which allows mobile money agents to convert float/e-money from provider A (e.g. MTN) to B (Airtel), thereby massively enhancing their ability to manage scarce liquidity and raise their value proposition for their customers, hence solidifying their income and boosting their positive impact to the local economic development.

At Flow, we love the solution that we have developed over the past 5 years and we are convinced that it serves a community of MSME which would be financially excluded and deprived of economic opportunity to improve their life without our solution. To move to the next level we want to expand our client and market outreach and to continuously work on our solution to make it even better.

Solve brings together a huge community of exciting entrepreneurs, organizations, funders and other changemakers. We see this as a unique opportunity for us to learn and benefit from interesting exchanges and experiences. As this will happen on the highest level in terms of professionalism and entrepreneurship we believe that we can benefit from and contribute to this platform of exchange. We closely followed some of the past Solvers and saw how the challenge has propelled their ideas into new spheres. 

There are two specific outcomes that we are hoping to achieve by being selected:

As we are working hard every day to make our company better, it is sometimes hard to get out of our ecosystem/bubble. Solve would provide an opportunity for us to exchange ideas with people from other sectors and help us question what we are doing and how we do it. The 9 month support program with its support network, access to in-kind support and exchange with peers (we are not alone in this!) could support us in this. 

We see Solve as a unique chance of being put in contact with innovative and impact-minded leaders. As we want to grow both in terms of ideas and resources we would like to further develop our ties and network with top professionals from all sectors and industries.

Flow offers a distinct value proposition for small merchants by providing instant access to growth financing for any mobile money service, enabling small merchants/mobile money agents to unlock their economic potential. This access is characterized by appropriate funding amounts, convenience, and favorable pricing, all without the need for collateral or burdensome documentation. 

What mobile money merchants find outside the offerings of Flow often lacks transparency in pricing, and financing products that do not cater to the specific requirements of small businesses. This means the loan amounts and duration fall short of meeting the financing needs of agents. Often, the financial products mobile money agents use are really tailored for retail customers and hence fall short in fully powering the potential of these SMSE. As opposed to existing loan products, Flow uses a tech and human approach in tandem combining the best of the digital and analog world, using best practices from micro finance to engage, inform and onboard customers. Notably, Flow is ecosystem agnostic, offering liquidity support to various platforms such as MTN, Airtel, ChapChap, EzeeMoney, and others. This innovative approach is made possible through a combination of cutting-edge technology and a human-centered approach, bolstered by a unique go-to-market strategy. With a customer retention rate over 94% and repayment rates exceeding 99%, Flow’s customer satisfaction figures reflect the effectiveness of Flow's services. The company's unique operational model and technology platform, the Flow Liquidity Engine (FLE), contribute to these positive outcomes, indicating that customers find value in Flow's offerings.

Flow’s innovative approach lies in its profound understanding of the market its customers are working in and responding with products and services they really need.

One example is Flow Switch: a service which allows customers to exchange e-money value between mobile network operators (MNO). A service which is unique in the sector and will bring massive benefits to agents as they save time, costs and attract customers by always having available the right amount of float of a certain MNO. Flow realized that demands for certain e-money/float is difficult to predict for agents, hence we developed the switch feature which is already integrated in the customer app and ready to launch in new markets.

We believe that this innovation could have a lasting impact on the whole sector. Interoperability between operators could be brought to new markets making it cheaper and faster for customers to use mobile money offerings. Ultimately other actors and MNO will move to offer a possibility to exchange float between operators making it hence much easier for agents to respond to the demands of their customers.

Flow's business model seamlessly integrates a dual social and commercial agenda, with a primary goal of elevating the income levels of its customers, thereby directly benefiting them and their families. Hence, Flow Global's Theory of Change revolves around empowering small businesses, particularly mobile money agents, by providing them with access to working capital financing. By offering tailored financial products and services, Flow aims to increase the income and revenue opportunities of its customers. This, in turn, leads to economic growth, job creation, and enhanced productivity within the informal economy. Notably, Flow's customers have seen remarkable results, with an average income surge of 40%, and in some instances, witnessing their incomes double. This positive trajectory has also spurred business expansion, with several customers opening additional shops or outlets - hence contributing to job creation in the local economy.

In the past 24 months alone, Flow customers have consistently generated an average monthly revenue of US$ 111 through Flow liquidity services, with a corresponding average fee payment of US$ 21. As a result, these customers have enjoyed a noteworthy average monthly profit of US$ 90.

This strategic approach aligns seamlessly with Sustainable Development Goal (SDG) 8, which aims to foster sustained, inclusive, and sustainable economic growth alongside promoting full and productive employment. Flow's contributions to this overarching goal are multifaceted:

By enhancing access to financing and emphasizing responsible financial practices.

By augmenting income and revenue opportunities for micro and small businesses.

By bolstering productivity within the informal economy.

By actively supporting the formalization and technical advancement of small businesses.

In essence, Flow's business model not only drives economic empowerment but also aligns with global initiatives aimed at fostering equitable and sustainable economic development. 

Flow furthermore supports SDG 9: “Build resilient infrastructure, promote sustainable industrialization”, by enhancing efficiency of digital infrastructure (the mobile money ecosystem); fostering innovation by capturing and analyzing data; and addressing the 5 trillion credit gap for small enterprises. 

In 2023 Flow received the “Fintech For Good Award” in London where the committee explained that: “This is yet another recognition of its [Flow] ability to drive impact in emerging markets at the same time as financial returns. The FinTech commenced operations in 2018 and is on a rapid drive to expand across Africa…the impact is transformational, with 69% of merchants seeing an improvement in their revenue within the first month and a 40% growth on average over six months.

Flow's impact goals are oriented towards empowering small businesses, particularly mobile money agents, to achieve sustainable economic growth and financial inclusion. In 2023, Flow served a total of 10,207 mobile money agents in its markets. Building on this momentum, in 2024, our goal is to double this figure and reach more than 20,000 agents. Additionally 

To measure progress towards our impact goals, we focus on several key indicators:

Income Increases: Flow tracks income increases related to the e-money float loans we provide. We analyze the uplift in mobile money commissions achieved by the mobile money agents we finance after becoming our customers. On average, we observe a 40% increase in income for our customers - after 6 months.

Number of Women-/Youth-Led Businesses Financed: Flow is committed to promoting gender equality and youth empowerment. We track the number of women- and youth-led businesses financed through our services to ensure that our impact reaches diverse segments of the population.

Number of Businesses Previously Unfinanced: Flow aims to address the financing gap for small businesses that have previously been underserved by formal financial institutions. We track the number of businesses that receive formal financing for the first time through our services, thereby enhancing financial inclusion and economic opportunities for underserved communities. Since its incorporation, Flow has distributed more than 425.000 loans, worth more than USD 95 million which sustainably benefitted a segment traditionally excluded from traditional financial products.

The Flow Liquidity Engine plays a crucial role in tracking these indicators digitally. Leveraging live transaction data combined with qualitative research and customer feedback, the platform provides real-time insights into the impact of our interventions. This enables us to make data-driven decisions, adapt our approach as needed, and maximize our impact on the ground. Through these efforts, Flow contributes to broader societal goals, such as promoting sustainable economic growth, gender equality, and financial inclusion, ultimately creating lasting transformational impact.

The Flow Liquidity Engine is a comprehensive lending platform designed to facilitate digital enterprise credit. It supports lenders in providing low-risk financing to small businesses using a data-driven approach. The platform includes:

• Lending Management System: Automates the disbursal process, account reconciliation, and repayment verification.

• Customer Relationship Management with KYC: Oversees the entire product and customer lifecycle, delivering timely alerts and notifications to relevant stakeholders.

• Data Analytics, Reports, and Portfolio Alert System: Provides stakeholders with in-depth insights into businesses, customers, and products, enabling timely interventions.

• AI/ML-based Credit Scoring: Develops a customer’s credit score based on income/commission and repayment history, and flags potential default risks.

On top of our platform, we have developed applications and systems that help customers and run business efficiently:

• Mobile App for Field Officers: Enables field officers to manage the sales pipeline, make regular customer visits, and process customer requests.

• Customer Mobile App: Allows customers to apply for working capital loans and make repayments directly through the app.

• Payment Verification and Account Reconciliation Applications: Facilitate instant verification of payments and account reconciliations.

• Web Applications for the Back-End Team: Helps the back-end team track, monitor, and support customers and field officers.

All these applications have been developed on PHP, Laravel, Python, SQL, React & React Native and AWS Cloud.

We have 40 team members working full-time on our product, design and engineering team.

We started buidling our solution in 2019.

At Flow, we are deeply committed to fostering diversity, equity, and inclusion in all aspects of our work. Our approach begins with the composition of our leadership team, which reflects the diverse backgrounds and experiences of the communities we serve. Our founders have lived and worked in the markets where we operate, giving them firsthand insight into the challenges faced by mobile money agents and underserved populations.

Furthermore, our local teams, who run operations on the ground, bring a wealth of experience and understanding of the sector. Many of them have been personally affected by the problem of financial exclusion that Flow is solving, giving them a unique perspective and driving their passion for our mission. We already have employees from Uganda, Rwanda, India, Madagascar, Germany, Peru and Austria. 

We offer a annual training budget of USD 1000 for every confirmed employee globally. A good number of our employee have already used that option to do academic courses, professional trainings. 

Our team's goals for becoming more diverse, equitable, and inclusive are multifaceted. We strive to create an environment where everyone feels valued, respected, and empowered to contribute their unique perspectives. This means actively recruiting and retaining talent from diverse backgrounds, including women, minorities, and individuals from underrepresented communities - for instance, in Uganda we are proud that our field staff represents all major regions and most languages spoken in the country. 

To achieve these goals, we have implemented a range of actions. We prioritize diversity and inclusion in our hiring practices, ensuring that job postings reach a wide audience and that candidates from diverse backgrounds are given equal consideration. We also provide ongoing training and development opportunities to our team members to raise awareness of unconscious bias and promote inclusive behaviors.

Additionally, we actively seek out partnerships with local organizations and community groups that are dedicated to promoting diversity and inclusion - such as celebrations of the international day for equal rights for women. In Madagascar Flow supports local initiatives to raise awareness for financial literacy for people without formal school education. By collaborating with these stakeholders, we can amplify our impact and reach more marginalized individuals who stand to benefit from our services.

Ultimately, our commitment to diversity, equity, and inclusion is not just a moral imperative but also a strategic advantage. By harnessing the collective talents and perspectives of a diverse team, we can drive innovation, better understand the needs of our customers, and ultimately achieve our mission of promoting financial inclusion and empowerment for all.

Flow's business model revolves around providing value to small businesses, particularly mobile money agents, through a combination of impactful services and revenue streams. Our primary revenue streams include fees charged for our liquidity advances and our unique "Switch" service. Additionally, we are poised to introduce software licensing as a third revenue stream through upcoming BaaS (Banking as a Service) partnerships.

Flow leverages data analytics to assess the creditworthiness of shopkeepers and project future revenues, enabling us to provide tailored e-money working capital advances to agents. These advances are crucial for agents to manage their cash flow effectively and seize growth opportunities. In return for these liquidity injections, Flow's customers pay a fee, calculated as a revenue share, which equates to approximately 20% of the profits generated by the shopkeepers through Flow's services.

Over the past two years, our customers have consistently generated an average monthly revenue of US$ 111 through Flow liquidity services, with an average fee payment of US$ 21. This leaves our customers with an impressive average monthly profit of US$ 90, showcasing the tangible value we provide to our customer base.

By offering innovative financial solutions and leveraging data-driven insights, Flow not only generates revenue but also fosters the growth and success of small businesses within the mobile money ecosystem. Our commitment to delivering impactful services and sustainable revenue streams positions us as a trusted partner for mobile money agents seeking to thrive in the digital economy.

Flow operates at the intersection of financial innovation and social impact, leveraging advanced data analytics to provide tailored financial solutions to mobile money agents. Our approach begins with a deep dive into shopkeepers' transactional data, allowing us to assess their creditworthiness and project future revenues accurately. By understanding the unique business patterns derived from sales data, we can offer customized e-money working capital advances that meet the specific needs of each agent.

One of the key aspects of our business model is the fee structure for our liquidity advances. Rather than imposing fixed fees, we calculate fees as a revenue share, representing approximately 20% of the profits generated by the shopkeepers through Flow's liquidity injections. This ensures that our success is directly tied to the success of our customers, aligning our interests and fostering a mutually beneficial relationship.

Over the past two years, our approach has yielded impressive results. On average, our customers have generated $111 in monthly revenue through Flow's liquidity services, with an average fee payment of $21. This leaves our customers with a substantial average monthly profit of $90, demonstrating the tangible value we provide to their businesses.

Looking ahead, our focus is on scaling our impact and expanding our reach. In Uganda and Rwanda alone, we see a significant market opportunity, with an estimated annual revenue potential exceeding $24 million. By capturing a 50% market share and leveraging our innovative technology platform, we aim to capitalize on this opportunity and drive sustainable growth.

Our commitment to impact extends beyond financial metrics. Flow has been recognized for our transformative work in the fintech space, receiving prestigious awards such as the 2023 FinTech for Good award at the London FinTech awards. Additionally, our inclusion in the Inclusive FinTech50 winners list underscores our leadership in promoting financial inclusion and empowerment in emerging markets.

To fuel our growth trajectory, we have secured $5 million in funding to date from a mix of equity, debt, and grants. Notable investors include DEG (private sector arm of German Development Bank KfW), UNCDF, EFA and  the Suiss Capacity Building Facility (SCBF) who share our vision for driving positive change through innovative financial solutions. Currently, we are in the process of raising our pre-Series A funding round, with the goal of converting existing merchant pipelines, enhancing our technology infrastructure, and entering new markets.

In 2024, we kicked off the year with strong funding momentum, securing $1.3 million in fresh debt financing. This includes $600k from Agora Microfinance, $400k from our existing debt investor EFA, and $320k from FSDU/MasterCard. With this infusion of capital, we are well-positioned to accelerate our growth and make an even greater impact on the lives of mobile money agents and their communities.