">
TechMoran
  • About Us
  • Deals
  • Jobs
  • Motoring
    • Money
  • Pitch Your Startup
  • Submit Your Post
  • Freelance Gigs
  • Travel
  • Men’s Corner
  • Dating
Monday, January 18, 2021
  • Startups
  • Reviews
  • Insider
    • Obituaries
  • Business
  • Women
  • Blockchain
  • Columnists
  • Hacks & Facts
    • How To
  • Editions
    • US Edition
    • India Edition
    • MENA Edition
    • Asia Edition
    • Europe Edition
    • International Edition
No Result
View All Result
TechMoran
">
Home Fintech

“Silicon Valley-Style” investing leads to missed opportunities in East Africa & India fintech -Report:

Milcah Lukhanyu by Milcah Lukhanyu
4 years ago
in Fintech, India Edition, Startups
5 min read
0

The vast majority of digital financial services (DFS) startups in India and East Africa are not receiving the investment required to scale according to a report by VC firm Village Capital dubbed “Breaking the Pattern: Getting Digital Financial Services Entrepreneurs to Scale in East Africa and India.”

In the report, Village Capital interviewed 55 entrepreneurs and 23 investors, researchers, and other entrepreneur support organizations in India and East Africa made possible with funding from the Bill & Melinda Gates Foundation.

More than 233 million people in India and 60 million people in East Africa lack formal bank accounts, and more than 50% of small businesses lack access to formal credit, and yet, most DFS companies in these regions face significant barriers to scale.

According to the report investment is highly concentrated in just a few companies.  For instance, in East Africa, startup investment is at an all-time high, but 72% of venture capital went to only three startups in 2015 and 2016.

The report also says investors in East Africa and India consider DFS companies to be risky because of human capital challenges and structural barriers in the marketplace; but these challenges are hard to overcome without investment. As one Indian entrepreneur notes: “The traditional Silicon Valley model of building a product so viral that you don’t need a sales force cannot be applied to India.”

Because of the high cost of early stage due diligence in India and East Africa, investors often fall back on patterns to find companies and make investment decisions – relying on networks and indicators like prestigious universities or accelerator programs.

READ  Travelstart Launches Kenya’s First Mobile Phone Flight Booking Service

“If you’ve been paying attention to the Economist or the New York Times, you might think we’re in a golden age for digital financial services in India and East Africa. In fact, we’re only at the very beginning,” said Ross Baird, CEO of Village Capital. “We’ll need hundreds of companies to reach scale to truly improve the financial health of communities in India and East Africa, requiring us to look beyond the ‘one size fits all’ model of venture capital in markets that operate under an entirely different set of rules.”

Related posts

Adam Molai’s JUA Kickstarter Fund Doubles to $2M to Kickstart African Entrepreneurship

January 15, 2021
0

Nigeria’s TeamApt pivots to serve consumers, eyes expansion into West & North Africa

January 14, 2021
0

Cellulant Group CEO Ken Njoroge to step down in June

January 14, 2021
0
work from home kenya

OZÉ Raises $700k To Digitize African MSMEs & Offer Them Affordable Capital

January 14, 2021
0

The report provides several recommendations for investors, foundations, governments and entrepreneur support organizations, including: strengthening the human capital infrastructure; facilitating partnerships between entrepreneurs and major financial institutions; providing alternatives to pattern recognition fallbacks; and developing alternative financing mechanisms to provide DFS companies with the right funding at the right time.

Findings of this report will be used to shape Village Capital’s upcoming venture development work in financial health, in collaboration with PayPal. In 2017-2018, Village Capital and PayPal will operate four investment-readiness programs, supporting more than 40 emerging FinTech innovators across the US, Latin America, India and sub-Saharan Africa.

READ  Kuda, Nigeria’s digital bank raises $10M to take on traditional banks

 

Readers 1,409

Share

  • Click to share on Telegram (Opens in new window)
  • More
  • Click to share on Tumblr (Opens in new window)
  • Click to print (Opens in new window)
  • Click to share on LinkedIn (Opens in new window)
  • Click to share on Pinterest (Opens in new window)
  • Click to share on Reddit (Opens in new window)
  • Click to share on Pocket (Opens in new window)

Like this:

Like Loading...

Related

Milcah Lukhanyu

Milcah Lukhanyu

Milcah Lukhanyu covers daily news briefs at TechMoran. She is the person who will probably read your press release and get the story out of it or totally trash it. Send tips to [email protected]

Related Posts

Entrepreneurship

Adam Molai’s JUA Kickstarter Fund Doubles to $2M to Kickstart African Entrepreneurship

January 15, 2021
0
Startups

Nigeria’s TeamApt pivots to serve consumers, eyes expansion into West & North Africa

January 14, 2021
0
Business

Cellulant Group CEO Ken Njoroge to step down in June

January 14, 2021
0
work from home kenya
Startups

OZÉ Raises $700k To Digitize African MSMEs & Offer Them Affordable Capital

January 14, 2021
0
Startups

France’s OTT platform Molotov expands into 7 African countries

January 14, 2021
0
Startups

Gro Intelligence Raises $85 Million in Series B Funding

January 13, 2021
0
alternative energy building clouds energy
Startups

West Africa’s Daystar Power raises $38 million to accelerate its regional expansion

January 13, 2021
0
Startups

UK & Egypt’s Docspert Health Raises Six-Figure Seed to expand its Telemedicine Platform

January 13, 2021
0

https://bit.ly/2VOxuoBhttps://bit.ly/2VOxuoBhttps://bit.ly/2VOxuoB
ADVERTISEMENT

Join our Mailing List

Loading

Recent Posts

A salesman checks a customer's iPhone at a mobile phone store in New Delhi, India, July 27, 2016. REUTERS/Adnan Abidi

How To Measure How Much You Walk On Your iPhone

January 17, 2021

How To Scan and Sign Documents Directly From Your iPhone

January 17, 2021

realme to release more phones in 2021 to grow its smartphone market share

January 16, 2021

What You Need To Know To Manage Your Network Effectively

January 16, 2021

Baidu establishes an Intelligent electric vehicle arm to bring autonomous cars on a road near you

January 15, 2021
">
">

Follow Us

">

There are many sites out there focused on blowing off some steam, from funny entertainment to thrilling experiences like playing online, in some cases online gaming could grant you the chance to win extra money. We came across rocketpot.io while browsing for a good btc casino online and it left us a very good impression with their wide variety of games and crypto offering.

Privacy & Cookies: This site uses cookies. By continuing to use this website, you agree to their use.
To find out more, including how to control cookies, see here: Cookie Policy

© 2019 Moran Media Group - All rights reserved TechMoran.

No Result
View All Result
  • Startups
  • Reviews
  • Insider
    • Obituaries
  • Business
  • Women
  • Blockchain
  • Columnists
  • Hacks & Facts
    • How To
  • Editions
    • US Edition
    • India Edition
    • MENA Edition
    • Asia Edition
    • Europe Edition
    • International Edition

© 2019 Moran Media Group - All rights reserved TechMoran.

Login to your account below

Forgotten Password? Sign Up

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
%d bloggers like this: