Pngme
written BY Kelly Costello / PHOTOGRAPHY provided by PNGme
Welcome back to another SHACK15 Startup Spotlight, where we highlight the exciting work being done by our resident startups and members of our community.
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Globally 1.7 billion people are underserved or completely cut off from financial services. Pngme’s mission is to close the $5.2 trillion finance gap affecting 200 million MSMEs (Micro, Small, and Medium-sized Enterprises) globally by providing financial institutions with the data infrastructure needed to better serve their customers. Pngme’s technology makes it easy for customers of financial institutions, such as MSMEs and individuals, to create a holistic financial data profile that can help them access capital more easily. With offices in Nigeria, Ghana, and Kenya and partnerships with leading financial institutions, Pngme is growing quickly and looking to provide African financial institutions with the tools they need to develop innovative financial products that reach more individuals and businesses.
We caught up with founders Brendan Playford and Cate Rung to hear more about what led them to found Pngme and the impact they have had in emerging markets so far.
What was your inspiration behind founding Pngme and wanting to help solve problems related to access to finance on the African continent?
Brendan: The inspiration for Pngme came from my experiences in Africa between 2007 to 2014. While working on community biofuel projects, I would lend money to my friend Alan in Tanzania. This helped Alan build and scale his gemstone business. The cost to send a loan through Western Union was 15-20% of the loan, which was compounded on repayment. Alan was able to grow out of his gemstone mining business and now has a successful online classified ads business (and has taught his wife to code!). When I returned to Africa with Cate in 2018, we started searching for a more scalable solution to MSME loans, and when we returned, Pngme was born.
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What is unique about your approach to bridging technology and lending?
Cate: We believe that the API economy is the future for Africa. However, jumping straight to being API-forward is foolish given some of the technology gaps we’re seeing with customers. We’re focused on providing mobile frameworks, developer tool kits, and products upon which African-based financial institutions and developers can easily build. We don’t want to be a Silicon Valley based project that sets its own standards and dictates how integrations function. This is reflected in how our stack is built and also in our collaboration with groups like Open Banking Nigeria whose mission is to make sure technology serves the individual. We partner with institutions that share our vision of financial inclusion. This includes mobile money operators such as ReadyCash in Lagos, microfinance banks such as Rigo (Lagos) and BlueHorizon (Accra) as well as MEST-graduate fintech, GrowthFactor (Accra). Equipping strong local brands with critical data infrastructure is paramount to the growth of financial services in sub-Saharan Africa.
What are the different components of your product and who do they serve?
Brendan: Our open API and developer toolkit enables a myriad of potential products and services. If I had to focus on the key components that our partners are fast tracking right now, they’d be be: KYC/Identity verification, our digital loan platform which is helping small banks digitize their processes very quickly and cost effectively, and our SMS SDK which has enabled banks to increase their customer base with financial data/history aggregated from alternative data sources including USSD payments (USSD is a messaging service that drives mobile money transactions). All three of these have had an immediate impact on lenders and the micro-businesses they serve. Check out a recent interview with lenders here.
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What are the challenges in creating a data-driven startup focused on emerging markets?
Brendan: I’m not going to lie, the engineering hurdles are tough. Financial data in emerging markets is very fragmented, there is no standardization and a lot of consumers' financial data is locked in data silos, USSD (mobile money) channels and other non-traditional data formats. The integration of alternative financial data is a key component of Pngme. Globally 45% of all USSD transactions happen in Africa. With the ability to access that data, mobile money operators, banks, and fintechs will be able to accurately serve and provide financial products to a huge portion of the population who are currently completely cut off.
Gender parity and equity for female entrepreneurs is a huge problem around the world, and especially in emerging markets. How does Pngme support female entrepreneurs?
Cate: There’s been a number of studies that have revealed how providing microloans, specifically to women have had incredible effects on developing countries and communities. Women are more likely to re-invest money into their families and community, and loans have helped promote gender equality and financial freedom by enabling small, women-owned businesses to start and grow. Pngme’s financial data platform aims to remove any form of gender bias from lending by providing banks with data purely based on accurate financial history. From an internal company perspective, Brendan and I are also dedicated to hiring women across STEM fields. We’re incredibly happy to have started working with Janice as our Lead Data Engineer in July.
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How has COVID-19 impacted lending and financial services across Africa?
Cate: In the words of one of our customers,
“Low sales have been the order of the day, products have been inflated by dealers, and it’s getting worse. Additional funds are desperately needed to keep businesses afloat. Many of these businesses are essential to rural communities.”
In addition to the logistical issues individuals are facing, it’s been very difficult for central banks to distribute stimulus and aid due to the lack of digital infrastructure. A digital platform like Pngme enables individual consumers to access loans and stimulus checks remotely, when many microfinance applications in Africa are still done in person.
Where is Pngme heading in the next year (or what are the milestones you want to hit?)
Cate: We have offices now open in Nigeria, Ghana, and Kenya, with in-market experts on the ground leading our partnerships with a variety of financial institutions. We’re scaling very quickly. A major focus is hiring engineering talent to keep driving product and partner integrations. If you’re a Backend Engineer and interested in joining our mission please get in touch!
We’re also working closely with our partner, Blue Horizon who organizes monthly donations for local causes. Earlier this year they worked with Akotokyir Anglican school which was in desperate need of essential supplies. Blue Horizon donated over notebooks, pencils, pens, erasers and other materials that will see the school and its students supplied with materials well into next year.
We’re continuing to support Blue Horizon Aid and raise funds for two other schools in rural Ghana who are in need of essential learning supplies; please donate here!
Thanks so much to Brendan and Cate for sharing your story with us. Keep an eye on Pngme as they continue to scale and work towards bridging the finance gap for African entrepreneurs.
Stay tuned for more SHACK15 Startup Spotlights in the future, where we highlight the great work being done by members of the SHACK15 community!