Bloom Impact

We have witnessed first hand the inefficiencies, limitations, and loss that occurs without adequate access to finance. Having developed numerous mobile banking, agent networks and biometric payment solutions in Africa we have seen the power of using innovative digital technology. The impact we've had in providing access to finance through the mobile phone has inspired us to continue addressing barriers for the underbanked sector. 

We disrupt the status quo of financial services in Africa; where entrepreneurs manually search for affordable, suitable working capital to grow their business and suffer from the costs, time loss, risks and rejection involved. Through a marketplace model, we bring the bank to the entrepreneur digitally; letting them explain who they are, what they want and then receiving suitable products to meet their needs. On the supply side, for financial institutions on our platform, we envision a more effective, efficient and digitally far reaching service.

Our target is underserved MSMEs that face a $331B financing gap. We empower MSMEs by educating them and easing affordable access to finance. Through our marketplace, business owners apply using our mobile App for a loan, savings or payments account, and we validate, verify & connect qualified customers with our financial institution partners.

MSMEs in emerging markets cite "Access to Finance" as their greatest challenge, yet contribute 65-90% of GDP and generate 70-90% of new jobs. According to the SME Finance Forum, there is currently a demand of $8.9T for financing of MSMEs and a $5.2T financing gap. Much of this exists because traditional financial service providers (FSP) are hesitant to lend to small businesses due to costs, reach and risk.

Our target audience has limited access to finance & low financial literacy. Our free app offers a breadth of access and importantly we guide users with tips & explanations to educate them about terms, credit history & how to be eligible for products they seek. Through machine learning, we are deepening our predictability to help low-income segments understand their eligibility and how to best apply for products.

We've seen a 200% App user increase per quarter - people state that they like the simplicity of our service, the ability to learn about market options, product terms & how to demonstrate their eligibility - all common barriers to inclusion. We also educate & provide access to personal credit reports. We're helping small business owners that have businesses typical of what you can find across SSA. They have activities in local communities ranging from 12% Petty Trade, 11% Beauty Salon/Barber, 10% Boutique, 9% Manufacturing, 8.5% Food vendor/Resto, 8% Auto Repair, 8% Seamstress, 6% AGR Processing, 6% Pharma/Medical, among others. In our monitoring & eval work, thus far we found that over 22% of our MSMEs customers have hired new employees with the working capital loans received through Bloom.

To reach underserved & unbanked we form partnerships with local community based associations that serve small businesses. Together we conduct monthly events providing financial education & literacy, teach them about digital banking & payments, credit and other products and demonstrate how to use our App. One example includes our partnership with Ghana Association of Women Entrepreneurs, who focus on supporting women with micro and small businesses.

We offer a simple, smartphone-based marketplace where business owners easily learn about & access affordable financial services at their convenience. By digitizing access to financial services, we make it significantly easier & faster for business owners to apply for banking products. Our app saves time by learning about market options & being able to apply to multiple banks at once & get matched automatically with products that best fit needs. Via our App, MSMEs can check their credit report, learn how to be eligible, read & compare products at different FSPs - never done before & for free. For our financial institution partners, they digitally receive validated (digital KYC), vetted, qualified leads, we reduce high acquisition costs, risks & response times. Our financial institution (FSP) partners pay a monthly Subscription to be on our platform and pay for the leads. Our platform algorithms and scoring are designed an configured to ensure each partner receive eligible customers that meet their requirements. By digitizing the acquisition and onboarding process, our FSPs realize great efficiencies and growth.

Built to scale across Africa, our 3-year forecast includes expansion to 1 new country/year & we've built our tech architecture to support this. We're currently registered in Ghana & Nigeria. Expansion allows us to reach more MSMEs, increase offerings (insurance, investments) & grow our distribution network. In Ghana alone, there are >600K SMEs, of which ~70% are constrained, even though there are 80+ FSPs, hence great opportunity for disruption.

Bloom is more innovative than existing solutions in our market because we're the only digital marketplace of its kind in Africa that educates users & then analyses, verifies & matches eligible users with suitable financial products within minutes. Many fintechs working with SMEs in Sub-Saharan Africa focus on providing nano-credit, consumption, salary lending & are often balance sheet lenders. We're focused on the massive amount of small business owners, offering loan sizes larger than nano-credit in order to meet business growth needs & create job opportunities. Other existing market solutions are those used by traditional FSPs who are not yet on our platform, sending field officers into the streets manually looking for customers. These existing solutions are inefficient & costly, deterring FSPs from catering to the financial needs of MSMEs. By transforming these solutions to a digital, efficient & cost-effective solution through our marketplace, we hope to expand MSME access.

Our digital marketplace app creates a space for MSMEs to upload their data, have it analyzed & verified, & matched with suitable banking products on our app within a matter of minutes. Most importantly, we focus on educating entrepreneurs to ensure a better financially literate customer - within the App experience, we educate about what they are eligible for, how to become eligible, how to access their Credit report & it's importance, the importance of savings & record keeping, etc. Since it's smartphone based, our innovation reduces the opportunity cost for MSMEs when shopping around for the right financial product that meets their needs, and reduces the cost & time burden and risks of verifying & acquiring these new MSME customers for our FSP partners.

We launched our MVP Android version & the SaaS product for Banks in Fall 2017 & Version 1 March 2018 & added 6 updates during 2018 to both products. We leverage machine learning and AI to analyze data & determine scoring, provide in-app guidance & education, determine eligibility and connect entrepreneurs with banks & products. We use the latest technologies to build out our Android App and SaaS portal solution as well as our back end architecture. Our system is integrated through 2 APIs to pull real-time KYC info from national databases and Credit report analysis from national bureaus.

We've successfully connected small businesses with banking services and currently have 6 financial institutions/40 products on our platform. This access to a new avenue of financing has allowed our customers to grow their businesses by employing more people, investing in more stock and business expansion, and save for future business needs. Another impact of our innovation is increased financial literacy amongst entrepreneurs. A Benefit Corporation, we track Financial & Social Impact KPIs and aim to drive job creation. Some Q1 2019 indicators & results:

- 4200 MSMEs users to date. 200% quarterly increase Q1 to Q4 2018. Q12019 350% increase over Q42018.
- Growing % of women entrepreneurs; Q119 55% a 15% increase from Q418, 46% unbanked, 60% Youth.
- average loan size 2K USD
- average number of business employees is 3.
- average MSME monthly turnover 550USD
- 67% of the entrepreneurs are informal businesses (not Registered)
- MSME referrals are growing, now at 25%, good sign that entrepreneurs see value & spread the word.
- Response rate to financial literacy campaigns increased from 18% Q3 2018 to 38% Q1 2019.
- 0% default
- 52% who received loan have returned after they paid off the loan to apply for another product.

We measure about 20 KPIs both financial and social. These include number of App users, number of active users, % unbanked served, number of women, number of youth, geographic reach, number of loans, savings and payment accounts opened, all KPIs measured per quarter to analyze growth trend.

Top 3 goals this year include Nigerian expansion, complete our Seed round and increase our FSP partnerships.

External risks include regulatory changes that slow down the financial services market both for offerings and customers trust.

Other external risks include competition by other digital solutions that may seek FSP partner relations. Our main internal risks are data protection and Talent retention.

 We mitigate the risk of changes to financial regulations by ensuring we have a variety of FSP partners and offerings and expanding to other markets to balance out these macro level risks.

We have bank-grade encryption to protect our data and we provide performance based bonuses & recognition to keep staff motivated and enjoying their roles at Bloom.

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Carol Caruso (Co-Founder & CEO) is an expert in emerging markets and financial inclusion. For the past 2 decades, Carol has had extensive experience working with mobile apps, online platforms, mobile payments, agent networks, dozens of banks, MFIs, and fintech companies. Immediately prior to co-founding Bloom Impact, Carol was the SVP of Digital Channels at Accion International, where she led a team of digital finance experts, consulting financial institutions and fintech firms across Latin America, Africa, and Asia. She has also held positions as the MD of Triple Jump Advisory, Financial Inclusion Expert at Kiva, and EMEA Director at Broadvision. Carol is currently the Social Innovator-in-Residence at the Harvard Kennedy School SICI Program.

David Hutchful (Co-Founder & CTO), is an expert in mobile apps, software development and human-centered design (HCD). David is a Ghanaian and has been able to design an App that is well informed by the nuances of the African market and our target audience. He has had experience leading technology teams on 3 continents, having previously worked as the Director of Technology Innovation for the Grameen Foundation and a Researcher for the Technology in Emerging Markets (TEM) Team at Microsoft. Prior to co-founding Bloom Impact, David worked at a start-up as the founding CTO of engageSpark, social impact messaging service for use in developing countries. David also currently teaches Human-Centered Design at Asheshi University in Accra.

We have won the World Bank SME Finance Forum award for Responsible Digital Innovator for 2018 and have since been connecting with other World Bank groups for PR, partnering and financing. This led to being selected as a top African startup for an Investor roundtable for Africa held in Cairo in January.

We were selected to participate in the DFS Lab bootcamp in 2017 as we developed our MVP. We were also selected to pitch for Seedstars Africa Forum in 2018 and present at the MasterCard StartPath in 2018.

After completing a successful MVP & launching our commercial product in 2018, successfully contracting 6 bank partners, building a talented team, gaining EWB Venture capital and Kennedy Family Fund along with other angels in a pre-seed round, winning the World Bank award, becoming revenue generating and gaining our Nigerian lisence, we are very well poised to rapidly expand in Ghana & Nigeria.

Our business & operational structure is based on a delivery principle of tech & touch. We have a fully digital process for business owners and banks, we digitally leverage data points for our scoring and assessment and use digital customer service combining Whatsapp, Push, SMS based on schedulers and behavior-reaction planning. We provide voice and in-field support but our primarily digital model allows us to scale whilst maintaining costs. We've seen our CAC decrease 50% in 9 months. The market opportunity we are addressing exists in over 10 countries across SSA and smartphone penetration, connectivity are on a massive rise. Our revenue streams will grow from lead generation on more products (i.e. Investments, Insurance, Payroll services, Taxes) to Market Intel reports and SME fee based services, like our Credit Report. As a for-profit, we're planning a Seed round in 2019, Series A late 2021 to further expand.

Being selected as a Solver would enable us to scale our operations and help thousands more SMEs across Africa as well as attract other investors and partners due to this prestigious and important recognition. If named a Solver, we would deploy the support and funds as following: 30% on hiring a Business development manager for each Ghana & Nigeria to manage FSP relationships & support SME growth, 30% on Tech for product improvements for SME features; covering Data fees and Product Development (Hire 1 mobile developer, 1 database engineer) 40% Marketing to drive SME adoption; Agent distribution channel, social media campaigns and partner field events to drive awareness & provide financial education.

We'd also leverage Solve's network and convening power across Africa via PR, articles and partnerships to explain this support and tap into the MIT network where possible.