Global SME Lending SaaS (GSLS)

Africa’s population is projected to grow from $1.4 billion today to $3.3 billion in 2075.  At the current growth rate of 4-5%, the GDP per capital will not catch up.  Economic stress promotes social unrest, and the problems in Africa will not stay local.  How do we tackle this problem? The answer seems straight forward --  create more wage-paying jobs by growing existing and new private sector businesses.  Hurdles to implementation, however, are difficult and numerous.  Yet, as a global community, we must push forward by taking advantage of innovative technology to move large scale working capital funds to these growing businesses. 

The market opportunity for scaling is massive.  There are an estimated 44 million small and medium sized enterprises (SMEs) operating in Sub-Saharan Africa.  Despite contributing up to 80% of jobs and around 50% of GDP in Sub-Saharan Africa, their growth is constricted by access to working capital loans. Traditional commercial banks and lenders are risk adverse and will only lend to businesses with collateral.  Microfinance institutions typically lend to informal businesses with limited job creation potentials.  New fintech lenders mostly provide small size loans with short tenors that are not suitable as growth capital.  Very few financial institutions will even consider lending to small growing businesses without collateral because of perceived risks. Cost of due diligence required to properly assess risks of a small business is not much different for large businesses.  Based on simple economics, bank and non-bank lenders naturally prefer to disburse larger loans to established businesses.

Global SME Lending SaaS (GSLS) is designed specifically to efficiently and cost effectively manage loan processing workflow.  The reduced time and cost to review each loan enables lenders to handle more volume and achieve profitability even for smaller size loans.  

Key benefits for local lenders subscribing GSLS are:

• Eliminating the need for each lender to have an in-house tech development team.
• Gain efficiency from an AI-assisted, full featured end-to-end digital platform.
• Rich set of real-time tracking, monitoring, and report generation.
• Continuous software support and updates.
• Focus on its core business of lending 

The thirst for SME working capital loan is enormous.  The market potential for five target countries in Africa is estimated to be $500 million.

Global SME Lending SaaS (GSLS) is an AI-assisted cloud-based service available to non-bank lenders to seamlessly manage a robust lending workflow, from initial application to final loan payoff.

The core functionalities of the platform are:

The platform is configurable to adapt to lenders specific product design and desired functionalities.  The platform will choose the appropriate data sources for credit scoring and risk management for each country of operation.  

The product features include:

• Loan Origination & Risk Assessment: Streamline application processing, integrate with credit bureaus (where available), and enable customizable risk scoring models based on geography, industry, and lender-specific criteria.
• Funds Disbursement & Payments Integration: Integrate seamlessly with local payment gateways and banking systems to facilitate secure and efficient fund disbursement and loan repayments.
• Field Operations Management: Empower field agents with mobile apps for loan monitoring, client communication, and offline data capture with geo-tracking capabilities.
• Automated Reporting & Data Analytics: Generate comprehensive reports on loan performance, portfolio health, and key metrics. Provide lenders with data analytics tools for informed decision-making.
• Compliance & Security Controls: Ensure the platform adheres to local regulations and data privacy laws. Implement robust security protocols to safeguard sensitive borrower and financial information.

The target population that KSI is working to directly and meaningfully improve are: 

• Unemployed and underemployed workers with opportunities to find better wage-paying jobs that include social benefits.
• Motivated entrepreneurs who lack working capital to growth their businesses to build their own as well as local community wealth.
• Demonstrate to disenfranchised populace that there is a path to gaining financial stability and success.
• Better products and services available to local community from new and growing businesses.
• Overall economic wellbeing of local economy

The core team at KSI are Peris Bosire, Chief Strategy Officer and Sayuri Sharper, Chief Executive Officer.

Peris is leading the design and product development of GSLS and is responsible for the go-to-market strategy.

Peris is a visionary technology leader with over 10 years of experience building and scaling high-impact, transformative systems. As the co-founder and CEO of FarmDrive, a pioneering data science company, Peris spearheaded the use of machine learning and artificial intelligence to drive efficient capital allocation to the agriculture sector, contributing to sustainable global food systems. She helped build the software and data infrastructure that financial service providers leverage to deliver digital financial services, such as loans, insurance, and savings, to the agriculture sector. FarmDrive's clients include banks, mobile network operators, micro-finance providers, and fintech startups.

Peris' innovative leadership and commitment to leveraging technology for social impact positioned FarmDrive at the forefront of driving financial inclusion and sustainable agriculture globally.

Peris is supported by Sayuri, who is a seasoned entrepreneur and tech executive, and an experienced impact investor.  Sayuri has been investing in social enterprises in Africa as an angel investor for the last 7 years.  

Further, Sayuri has been a loan committee and board member at MCE Social Capital, a global impact investing non-profit with $100,000 under management.  Sayuri participates in bi-weekly loan committee meetings to approve loans presented by the investment team.  

Sayuri also worked closely with Shona Capital, an Ugandan company, to design their pilot lending program to provide working capital loans to small growing businesses, and joined the board after completion of the successful pilot.  She personally visited Shona Capital borrowers in Uganda and is familiar with the challenges faced by these entrepreneurs.  Shona Capital SME working capital loan fund has been in operation for 2 years, and has financed 44 small businesses with average loan size of about $8,000 and recovery rate over 95%.  During this period Shona Capitals portfolio companies have shown 209% growth in revenue in 12 months and has created 240 direct jobs.  41% of the businesses are female led.

Peris Bosire and Sayuri Sharper both see tremendous need for a cloud-based AI-assisted lending platform to provide the software solution to SME lenders to increase their efficiency and reduce costs so that more working capital loans can be disbursed to these businesses.

Since Peris has not started building the product, GSLS is still at concept stage

KSI will seek equity funding after a working prototype.

KSI is applying to Solve to connect with like-minded people who are interested in economic development in Africa by creating more jobs and local community wealth.  KSI is looking for introductions to:

•  Impact investors who may be interested in providing grant and/or funding to existing and new local SME lenders who are interested in implementing KSI's solution.  
• Existing local lenders who may be interested in a cloud-based solution to replace its current loan processing workflow or expanding its loan products by offering loans to smaller businesses they could not economically serve.
• Local banks and government regulators. 
• Entrepreneurs with experience in serving multiple African countries.
• Legal and financial service providers

As the market matures, a cloud-based platform solution that can spread the cost of development by serving many lenders is always more cost effective, feature rich with continuous updates than a proprietary solution.  Further, there is no need for each lender to roll its own lending platform, wasting R&D expenditures that are not the primary driver of their business success.  Lenders are much better off by focusing on their core business of lending and letting the technologists provide the tools to effectively manage the workflow. 

What makes GSLS innovative is its focus on providing a flexible, customizable, and modular set of functionalities that are foundational in a lending platform.  Fintech solutions targeting Africa and developing countries are still young.  With continuing growth and new comers in fintech and business lending, the market will demand a crowd-based lending platform that can scale and support multiple lenders. GSLS  intends to be a first mover in this product sector.

Having built one of the earliest fintech companies in Kenya to provide loans to small holder farmers in partnership with Safaricom, Peris Boisre, the Team Lead, has a unique understanding of the difficulties for a startup to build its own proprietary platform and what core components are necessary from a cloud-based platform to support different types of lenders.  Her development experience, familiarity with existing solutions, and deep understanding of the market gives KSI an advantage to building GSLS  right from the outset. 

GSLS  can catalyse the broader market because not only can GSLS  enable existing lenders to expand their available market (by offering new types of loan products) but also enhance their efficiency and reducing their operating costs.  Further, GSLS  creates the opportunity for new lenders to enter the working capital lending business without incurring a huge R&D cost and compete on the basis of its product offering instead of technology.  With adoption of GSLS, there will be more competition and more growth capital available to developing country businesses.  

The impact goals are included in the theory of change graphic in the previous section.  They are repeated below:

• Increased economic activities
• Additional wage-paying jobs
• Availability of better products and services for local community
• Rising middle class
• Increased tax revenue

The indicators are:

• Total number of SMEs served and amount of loans disbursed
• Number of jobs added, both direct and through value chain
• Revenue growth for borrower SMEs
• Employee household wellbeing (income, spending, savings, access to healthcare, children's education)
• Percentage of businesses run by female entrepreneurs

GSLS's functionality includes alternative credit scoring models, tailored loan product design using data-driven insights, deployment of digital loan administration interfaces, advanced data analytics (ML), data-driven collections & recovery, and digital payments. We are aggregating data required for risk assessment and loan product design in one place and making it available through easy to access APIs to non-bank lenders that need it. Not only are we able to help them scale efficiently, we are standardising the process similar to credit reference bureaus and removing the fragmentation that currently exists on the market.

The experience in financial services technology development has shown the enormous value of distinctly focusing on high-value problems and solving them from first principles using the latest technology, data science, and common sense. That's why GSLS is combining the latest in AI with traditional credit and risk knowledge to unlock massive value in financing the $5.2 trillion SME market – a gap in funding for micro, small, and medium enterprises (MSMEs) in developing countries.

Peris Bosire, Chief Strategy Officer, full-time

Sayuri Sharper, Chief Executive Officer, full-time

6 months

Peris Bosire is a female Kenyan.  Sayuri Sharper is a female Chinese American.  Both Peris and Sayuri are keen to hire talent regardless of their race or sex.  They are also keenly aware that female executives and developers do and can outperform their male peers.  

KSI is a business incubator.  GSLS is the first product and company KSI is incubating.  After successful development of Minimum Viable Product (MVP) and validation of market demand, KSI intends to spin off a new company to run this business.  The business model described below is from the perspective of this new standalone company.

The new business is B2B.  It sells a cloud-based lending solution to non-banking lenders that provide working-capital loans to small and medium-size lenders (SME).  GSLS enables its customers to reduce both time and cost in processing each loan application.  The increased productivity and extra earned revenues allow these customers to further grow their business.  The end result is more SMEs will have access to working capital loans.  The business successes of these lenders will encourage new entrants to SME lending, increasing more flow of capital to SME loans.

Peris Bosire and Sayuri Sharper are both experienced founders and CEOs of tech businesses.  They both have the necessary skills to grow a successful business from its inception.  

KSI will fund initial product and business development until GSLS advances from concept to pilot.  After demonstrating its early success, KSI will spin out a new company to run this business.  KSI will step back and become a shareholder.  The company will then reorganize and appoint a new senior management team and board of directors.  The next step is to raise equity capital to continue funding the company.