Lucy - a financial technology platform

I was a “corporate manager” in business and financial IT solutions until the start of the new millenium – when everything changed. An unexpected redundancy gave me the chance to re-evaluate what I wanted from life, and I took a year out and travelled to Cambodia to do voluntary work.

The destination actually became the starting point. I founded two award-winning social enterprises that provided jobs for local people, and provided technology strategy consulting to microfinance institutions. This evolved into managing multi-million dollar complex inclusive finance projects and global teams, focused on branchless banking and mobile-enabled financial services across Asia and Africa.  During this time, I realised that there was so much that could be done to improve access to finance for women and small businesses, but not enough financial institutions were recognising it. And that’s why we launched Lucy!

Empowering and enabling women to start and grow their own businesses makes sense for everyone. It just isn’t happening enough.

Because entrepreneurs: Don’t follow rules. Take great leaps forwards. In turn help many others. Because women entrepreneurs: Generate higher growth. Use that growth to greater benefit. Are a much lower credit risk. Are significantly underserved.

Lucy is a financial technology company that aims to help women who are overlooked, underestimated, and underbanked become unstoppable by levelling the financial playing field. Lucy aims to empower women from all walks of life, by equipping them with the financial tools and the belief in their own capabilities and potential that they need to take control of their future and make a positive contribution to their own growth and, through that, to the growth of the economy as a whole. 

Female entrepreneurs often can’t access responsibly-priced financial services, and so their potential is never realised.

• 80% of loans are made to men.
• 2% of venture capital globally goes to women-owned businesses.
• 20m+ women-owned microbusinesses in Asia Pacific don’t have access to formal finance. Their only options for smoothing lumpy cashflows or growing their businesses are friends and family, or loan sharks.
• The same applies to 1.5m foreign domestic workers who have travelled overseas to build a better life and start small businesses of their own when they return home. Their only options for managing family financial shocks such as illness or natural disaster are their employer, or loan sharks.
• If female entrepreneurs had the same access to finance as their male counterparts, the global economy would grow by up to US$5 trillion.

On top of all this, entrepreneurship is stressful and lonely and scary. And so much more so if you’re a woman. A still-too-pervasive culture tells them even if they COULD get financial services to help them start or grow a business, they wouldn’t be capable of using them effectively anyway…..

This is what Lucy aims to fix.

Lucy provides a suite of different services specifically targeted at enabling female entrepreneurs to realise their potential –

• Receive-as-you earn wagestreaming
• Employer-employee loan management
• Savings accounts with named pockets and targets
• Small business account with debit card
• Tailored flexible loans and lines of credit
• International remittances
• Peer support network
• Online mentoring environment

Our solution is entirely virtual and app-based, and leverages cutting-edge technology to enable streamlined digital delivery and a clean and intuitive user interface. Our initial focus is on joining the dots between developed and developing economies, through links between foreign domestic workers and their families, microentrepeneurs and small investors. Although these groups of women cross socio-economic divides, their circles overlap and their aims complement each other - and Lucy has been designed to sit right in their midst, benefiting all of them and enabling them to also benefit each other.

We are able to connect to and aggregate the services of multiple financial institutions and/or operate under our own licensing, enabling us to be agile and responsive to the different regulatory environments in each country where we will operate and leverage the best combination of back end providers to add the maximum benefit to our customers.

Our deep knowledge of our primary market segments and their pain points, gained through extensive practical work in-the-field and supplemented by research, have informed the feature set of our solution which is outlined in the previous section of our response.

Our solution provides foreign domestic workers and microentrepreneurs with the financial services and community support networks that they need to grow and thrive. In order to ensure that we achieve this, we are following a co-creation approach through engagements and connections with NGOs and business groups, which enables our clients to guide the design and useability of the app and the relevance of the underlying products.

Empowering and enabling women to start and grow their own businesses makes sense for everyone. It just isn’t happening enough. Lucy aims to help women who are overlooked, underestimated, and underbanked become unstoppable by levelling the financial playing field. Lucy brings together a community of extraordinary everyday women, and provides them with the financial services and peer support they want to found, run and grow their businesses. Lucy is as much about women inspiring women for a common social benefit as it is about access to financial services for female entrepreneurs. And this benefits everyone – women and men.

From my own 20 years of working with inclusive financial institutions around the world, I have seen first-hand the slow rate of change in the industry despite the obvious value in overlooked segments like women and small business.

At the same time, the benefits of empowering women-led businesses are clearly understood:

·      For every dollar of funding, women-led businesses generate 78 cents, more than double the average

·      Women reinvest 90% of their earnings back into their families and communities, compounding the economic ripple effect

My co-founders had independently realised the same thing. Luke Janssen had recently sold a global company that built apps for banks, and had seen that they were not executing market and product strategy successfully. Hal Bosher, an experienced bank CEO, realised that financial services are typically run by men, for men, leaving 50% of the population to struggle with services that do not meet their needs. After a year of ad-hoc conversations, we got together in early 2019 and decided to stop talking about the opportunity and take action - to start a company that underbanked women could trust to help them access the financial products they need to found, operate and grow their businesses.   

I have been based in South East Asia for 20 years, living and working in developing countries. As a result, I have seen first-hand the challenges faced by women when trying to build and grow their businesses - and know that this is not because they do not have the competency, but because financial institutions often don’t help them widen their economic base. And lack of access to business-building financial services for entrepreneurs is not only a problem for the poor – it crosses all socio-economic levels. Entrepreneurs, even in developed countries like Singapore where I live, often can’t access responsibly-priced loans, and so their potential is never realised.

Entrepreneurship is stressful and lonely and scary. And so much more so if you’re a woman.

Because women are constantly being told, subliminally or explicitly, that they can’t build and run businesses as well as men. (As a senior woman in tech, I have of course had a lot of personal experience of this over the years). And so female entrepreneurs get hit twice – limited access to relevant financial services, and a still-too-pervasive culture that tells them they wouldn’t be successful anyway….. and this is what Lucy aims to fix.

I am the CEO and co-founder of Lucy. I have 20+ years of experience in technology for finance, mobile-enabled products and services, working in over 25 countries with a focus on low-income and underserved populations. I previously led the regional office for a fintech provider covering Asia-Pacific, Middle East and Africa, working in countries from DR Congo to Papua New Guinea and leading teams in 3 countries. Prior to that, I led multiple groundbreaking consulting engagements and acted as project director for a number of multi-million dollar mobile money and financial services projects focused on changing banking and finance for underbanked populations across multiple regions.

My co-founders:

Luke Janssen founded and sold a mobile technology company employing 300+ people across offices in Sydney, Melbourne, London, San Francisco, New York, Singapore, Dubai and Tokyo, where he pioneered mobile enabled disruption of the financial sector. Luke later founded an angel network that invests in and creates purpose-driven sustainable companies run by women.

Hal Bosher has a long track record in creating and implementing strategic business models that deliver long term value in challenging business environments, and is a leader in emerging economies with demonstrated experience as a founder, investor, CEO, and Board Member building large, progressive, businesses that make an impact. After a decade at the World Bank, Hal established himself in Myanmar in 2012, relaunching Yoma Bank and co-founding Wave Money, a mobile money business, in 2013.  

Lucy commenced operations in February 2020. In March, COVID-19 took hold, and by the beginning of April we were all in lockdown. The future was uncertain, as potential investors and partners seemed to wary of engaging, but we recognised that this was actually the best time to start Lucy as a completely virtual platform. We knew that the needs of our intended clients would still be there and potentially increase – families of FDWs would become more dependent on their support; salaried workers who lost jobs would be more likely to start their own small businesses from home; and women (being the resilient people they are) would find their inner strength and find creative ways to leverage their skills to provide financial stability for their families.

Our initial priority was ensuring that our team remained positive and focused on our goals – which we achieved through extensive use of videoconferencing and virtual development environments. We have also proactively been reaching out and engaging virtually with all the people we would normally have contacted by email or met face-to-face, and have found that, if anything, we are having more conversations and forging more relationships than we may have done before!

A number of years ago, a consultant in another office fell out with his manager (who in turn reported to me) and announced that he was resigning with immediate effect and didn’t want to make a important overseas trip to a client’s site the following day. The manager reached out to me in desperation – due to time differences, this was at 10pm my time, and something needed to be done immediately.

I decided the best approach would be to write to the consultant, to give him the opportunity to consider and digest. A small part of the email read “I often feel the same as you do - I also sometimes don't want to go somewhere, but I know it's necessary and important and so I go, and more than that I give 110% while I am there because I know that it is the morally right thing to do.”

The consultant thanked me for such a personal email, and went to the client’s site. I ensured that his manager spoke to him every day. He did a wonderful job and delighted the client. He has since been promoted to a more senior position in the company.

No one else is doing what we are! There is no company that is focused entirely on women across socio-economic divides; is entirely digital; and can easily be launched in multiple countries.

One thing that really differentiates us is the crossing of socio-economic barriers. Research has shown that 95% of affluent women have a strong interest in impact investing and would like to find ways to “pay it forward”, but without requiring a huge amount of involvement in supporting individual businesses or taking huge amounts of risk. One stream of our initial pilot will enable moderately affluent women in Singapore to invest in a fund that provides loans for FDWs (who are low risk as they have a regular guaranteed income and yet are completely unserved), and this will be expanded to enable similar groups of women to invest in funds that provide loans to microentrepreneurs, which they can choose by country or business segment if they so choose.

The other thing that really differentiates us is the recognition that access to finance and psychological empowerment are inextricably linked and holistically key to women entrepreneurs’ growth and success – and that many of the issues they face are specific to women and have been overcome by other women who are willing to help and guide them. We call it the “entrepreneurial sisterhood”.

The typical loan shark interest paid by FDWs is 400%, compared to the 10-20% typical interest paid by you and I. Remittance agents charge up to 8%. High cost of credit and sending money home = less money in their pockets. 60% of helpers return home with no accumulated savings.

Lucy activities: Providing responsibly-priced loans and the ability to save in named, goal-based savings “pockets”.

Outputs: The “cost of being poor” is reduced, resulting in more of the FDWs’ earned income remaining in their pockets. They can then save in a structured way for unexpected financial shocks and towards their own future.

Outcomes: The number of FDWs who return home with accumulated savings will increase. More FDWs will be able to start and grow small businesses in their home countries, benefiting their families and the economy as a whole.

Female microentrepeneurs have limited access to responsibly-priced credit that is responsive to their uneven cashflows. They also face challenges in keeping personal and business cash separately accounted for, resulting in their being unable to gain clear oversight of the profitability of their enterprise, and have little or no support network to give them the confidence to thrive and grow.

Lucy activities: Providing line-of-credit facilities which enable repayment amounts and frequencies to be determined by the entrepreneurs’ cashflow. Offering a no-fee business account with a linked debit card which also enables simple accounting records to be maintained. Incorporating membership to a vertical social network of peers and mentors which provide practical and psychological support.

Outputs: Female microentrepreneurs have both the financial and support tools to empower them in the success and growth of their business, from a provider that understands them and speaks their language.

Outcomes: The current US$1.5t funding gap for female-owned entrepreneurs is reduced. As women-led business generate more than double the average income:funding ratio, the impact on the economy will be more than the double of the average impact, too. As women typically reinvest 90% of their earnings back into their families and communities, the economic ripple effect will be further compounded, affecting the financial well-being of future generations.

We will be launching in Q4 of this year. For our initial target market segment of 250,000 FDWs in Singapore, there are currently no solutions available to them at all and so we have no competitors.

In one year, we expect to be serving 50,000 customers, and in 5 years (as we expand firstly to serve microentrepreneurs and then regionally) 1,000,0000 customers. This is only the number of direct users – the number of people impacted will include their families and broader community who will benefit too.

From the initial pilot with FDWs in Singapore, we will move into helping microentrepreneurs to run and grow their businesses, and at the same time enable successful women to invest in and provide mentorship to other women.

Beyond the Singapore pilot, our solution has been designed to be able to connect with a mix of different financial institution partners at the “back end”. The products and the user experience will be consistently Lucy everywhere, and will be tailored and configure to meet the varying needs of different countries and cultures. Customer onboarding; the user interface; and vertical social and mentor networks will all be managed by Lucy. All of this is “Lucy” to the customer.

Our key challenge will be building the right regional and global connections, particularly with potential investors, donors, and financial institution partners.

Our core founding team have extensive global connections in the financial inclusion space, and have lived and worked in multiple countries and cultures. We therefore anticipate that forging partnerships with financial institutions will not be difficult, but (given the bureaucracy of the typical bank) may be time-consuming and labour-intensive.

As a woman-focused and female-led business, we are keen to bring investors on board with a clear gender lens, including those who would also be able to connect us to potential bank or other partners in the various countries into which we are planning to expand.

By identifying and leveraging licences of financial institutions that like profitable business but don’t want to have to understand new markets or change their existing way of doing things. By potentially forging multiple partnerships in a single country to ensure a value proposition and win/win with each one, which could (for example) mean separate partnerships for lending and savings accounts.

Our solution is entirely virtual and app-based, and combines cutting-edge technologies with a carefully-designed User Interface to provide a service that is highly functional and deeply personal at the same time. Due to our philosophy of serving women across socio-economic boundaries, we offer a range of value propositions that complement and support each other:

• For FDWS:
  • Access to responsibly-priced credit to support them through unexpected family financial shocks = less money paid to loan sharks = more money in their pockets = increase in their own assets, the assets of their household back home
  • Access to low-cost digital remittance features directly from within our app, saving time travelling to and queuing at remittance agents as well as cost
  • Ability to save in secure, named savings “pockets” with goals assigned to them, enhancing their financial management capabilities and empowering them to make decisions
• For microentrepeneurs:
  • Access to flexible credit that fits their business cashflows = less reliance on high-fee moneylenders = increase in business assets
  • Ability to maintain a separate business account alongside a personal account and keep track of in and outflows, thereby gaining better visibility over the specific finances of their business
  • Membership of a virtual social peer network and access to online mentors = increase in self-confidence
• For moderately affluent women:
  • The ability to put their spare cash to good use and receive a reasonable return on investment at the same time, enabling them to make their own decisions about investing

Our business model is based around the charging of product and service-related revenues, supplemented in the short-term by:

• Existing and planned investment capital
• Grants for specific projects

We are operating using founder capital.

We  welcome enquiries from gender- or impact-focused investors, or from donors providing grants to support us enabling and realising projects that aim to financially empower female entrepreneurs.

Confidential.

Empowering and enabling women to start and grow their own businesses makes sense for everyone. It just isn’t happening enough.

From my own 15+ years of working with inclusive financial institutions around the world, I have seen first-hand the slow rate of change in the industry despite the obvious value in overlooked segments like women and small business.

During customer-centric product design workshops that I led in countries from Ethiopia to Bangladesh, it became apparent that complacency was widespread (“we have a solid customer base of repeat borrowers already”), and also that fear of the unknown was widespread too (“Do we need new people? New tech platforms?”). At the same time, the benefits of empowering women-led businesses are clearly understood:

·      For every dollar of funding, women-led businesses generate 78 cents, more than double the average

·      Women reinvest 90% of their earnings back into their families and communities, compounding the economic ripple effect

This was the reason I and my co-founders set up Lucy – a company that underbanked women could trust to help them access the financial products they need to found, operate and grow their businesses. By leveraging licences of financial institutions that like profitable business but don’t want to have to change their existing way of doing things. Our motivation for applying to the Elevate Prize is to bring Lucy to the global stage and, through that, to help women entrepreneurs who are overlooked, underestimated, and underbanked become unstoppable.