India’s Yabx has created financial behavioral models based on AI and machine learning which can be used by telecom operators, banks and financial service organizations to provide credit to the over 2 billion unbanked or underserved customers in Asia, Africa, and Latin America. It is one of five finalists in an Impact startup competition organized by 4YFN, the startup event of Mobile World Congress, which is taking place in Barcelona June 28-July 1. Yabx, which will be pitching at 4YFN, says it has created credit scores for some 150 million creditworthy yet underserved borrowers across 15 countries. It processes more than 100 billion data records each month. Customers include telecom operators Airtel, Axiata, America Movil, Orange and more than 10 regional banks and microfinance institutions.
In order to service the under-and-unbanked segments, Yabx leverages Big Data analytics and machine learning to generate data pertaining to individual customers and business revenue, savings, spending habits, and creditworthiness. “This data enables us to create a credit report for every individual in real-time, thus drastically shortening the loan application process,” says Yabx CEO and Founder Rajat Dayal. The startup’s team of seasoned data scientists creates more than 13,000 features from the data received in order to evaluate credit worthiness, he says. “Consumers are then assigned to an available partner lender. This process is executed in real time, with little or no latency. The result is the creation of a simple and quick loan procedure, spanning the application to the approval stages. “
Dayal says it takes under a second for an eligible individual to find an underwriter and have the funds transferred to their wallet or bank account.
In Malawi, a country with a GDP per capita of $411 and a banking penetration of less than 5%, most of the population does not have access to a formal financial system. With Yabx, FDH Bank was able to offer tailored financial products to its customers, whilst exploring addressable business opportunities at a reduced risk to the bank, says Dayal. FDH also used a digitally native loan management system and integration with the telecom company to provide loans in a cost-effective manner, he says. Since its launch in July 2019, the Kutchova loans product has provided hundreds of thousands of loans to customers. Some 70% of these customers accessed credit services for the first time. Women constitute 60% of customers opting for these loans and 60% to 70% of the credit is given to small and medium-sized businesses. The majority of the remaining 30% of the loans are taken out by farmers or people in the agricultural value chain.
“Our key differentiation is the ability to underwrite and service the financially excluded population, via proprietary AI and ML algorithms,” says Dayal. “These algorithms leverage significant amounts of alternate data and help our partner banks and fund providers to create a profitable portfolio. With this technology, we also ensure that the funds offered as credit to these customers or businesses is used for legitimate purposes. “
Yabx has raised funding from Comviva, a company owned by Tech Mahindra, an Indian multinational company that provides information technology and business process outsourcing services. Dayal says the startup is considering raising additional capital in the next year.
Its competitors include fintechs like Brazil’s Nubank and alt.bank that serve the unbanked directly.
Yabx is one five finalists in the 4YFN Impact Awards 2021, which is being organized by 4YFN in partnership with the Social Nest Foundation and tech2impact. The contest focuses on disruptive startups that are actively solving one or more of the United Nations’ Sustainable Development Goals. The finalists will pitch on the main stage during MWC 2021.
The other four finalists are Shotl, a Spanish startup that has developed a mobility platform that empowers public transport operators to supply on-demand mobility services through a network of vans and small buses; iLoF, a Portuguese startup that has developed am intelligent platform for precise, patient-centric drug development; Cureety, a Spanish startup specializing in improving cancer patients telemonitoring in real life conditions and supporting the advancement of oncology; and WeWALK , a UK startup that focuses on enhancing the mobility of visually impaired people.
The 4YFN Impact program convenes startups, communities and investors that want to have a positive impact in the world. Sustainability, inclusion and climate change are just some of the topics that will be discussed at the 4YFN main conference program and at the Impact Summit (Banco Sabadell Stage, Hall 8.1).
As part of the Impact Program 4YFN are joining forces with UNDP to support women start-up entrepreneurs based in the Arab region who are using technological solutions to advance the U.N.’s Sustainable Development Goals. The Innovator’s readers can join the 4YFN x UNDP Women Innovators Program in the Arab States: Demo Day on May 26th by registering here.
The Innovator is a media partner of 4YFN.
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