Fintech Entrepreneurs Across the Globe Are Springing into Crisis Mitigation Action
As they emerge from the initial rush of securing their families and teams and their own ability to meaningfully contribute, entrepreneurs around the globe have sprung into action to help fight the pandemic crisis and its economic fallout in their communities: From the university administrators, who turned their student dorms into sleeping quarters for nurses and doctors in nearby hospitals; to the small business owners, who realized that their machinery and materials for exhibition banner production could be used to manufacture personal protective equipment for health care workers; to the neighborhood leaders, who organize grocery deliveries to local senior living facilities that closed their doors to the outside world.
At Flourish, we are working on our own contributions, helping to reach vulnerable segments that are likely to fall through the cracks of government-led relief programs. In this week’s global virtual team meeting, we also shared what our portfolio companies and ecosystem partners across the world are already doing in their respective markets and areas of expertise. An awe-inspiring initial picture—by no means complete or exhaustive—of initiatives emerged.
Protecting frontline logistics workers
Across the portfolio, companies have stepped up to provide extra protection, in particular where their frontline staff is part of the vital domestic logistics infrastructure and can’t stay at home. In Bangladesh, ShopUp is operating one of the few authorized last-mile delivery services. The company is bringing doctors to their premises to educate and check on staff, buying additional protective equipment, and increasing health insurance coverage. In the US, StrongArm Technologies incorporated social distancing alerts into the wearable technical gear that is already in place to support workers’ compensation insurance for blue-collar “industrial athletes” in warehouses and distribution centers.
Providing real-time data for policy decision-making
By virtue of our investment theses, most portfolio companies reach their customers online via digital channels with high-frequency customer engagement. As a result, EBTFresh in the US realized early on that their customer base, comprised of food stamp beneficiaries, was experiencing rapid loss of income as the economy stalled. Similarly, gig-economy platform Steady shared its insights of where gig workers were losing income as a result of the slowdown, and where there might be new opportunities. Our US nonprofit ecosystem partner, Financial Health Network, in short order set up a publicly accessible space on their website for bank members and others to share emerging good practices, such as the suspension of current account overdraft fees. For emerging markets, CGAP has created a similar good practice clearing mechanism.
Making their expertise and rails available to others
Around the globe, governments and incumbent industry are struggling with the logistics of combatting the pandemic and mitigating the economic fallout. Rural savings platform Kaleidofin, in India, realized that a lot of the initial public health information was geared toward the already better-informed middle class. So, they teamed up with communications specialists to produce local-language information and advice on social distancing and hand-washing. In Pakistan, digital financial services provider Tez opened up its verification and payment rails to support NGOs to get cash advances to vulnerable communities. In the US, our nonprofit partner, the Alliance for Innovative Regulation, organized a weekend hackathon with banks, tech companies, and regulators to identify and helped address process bottlenecks in support of programs by the US Small Business Administration. Relatedly, Alloy retooled its services from know-your-customer (KYC) to know-your-business (KYB) so small business lenders could disburse emergency loans faster, and Hummingbird is working on detection of new fraud patterns, which are expected to rise inevitably.
Helping their customers in new ways
Across the portfolio, companies are working feverishly on providing new, critical services to their core customer bases. MicroEnsure in Pakistan put new COVID-19 coverage in place within days, paid for by a ride-sharing company that noticed significantly higher driver retention as a result. Shubloans in India, too, was able to tie up with insurance companies for new COVID-19 coverage. Apollo in Africa is continuing its input lending so that farmers don’t miss out on the current, critical planting season. Similarly, against the backdrop of a tightening liquidity crunch, emerging-market wholesale debt funder Lendable has pledged to continue providing crucial working capital to entrepreneurs. Across emerging markets, Paga, Neon, and Albo are leveraging their digital channels to support growth in online payment transactions in otherwise still heavily cash-reliant economies. In the US, challenger bank Chime is experimenting with advancing the expected federal relief checks to individuals at no cost. And EBTFresh has teamed up with GiveDirectly to provide cash grants to single mothers among their user base in particularly hard-hit ZIP codes.
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Fighting the pandemic and mitigating the economic ramifications requires a massive effort by governments, businesses, and the social sector. The entrepreneurial energy across the globe, each in their community and each contributing their expertise and resources, is one of the strong glimmers of hope in the current crisis. The actions and initiatives of our portfolio and partners are inspiring us at Flourish to make our own best-possible contributions. We hope that this energy and sense of purpose will sustain when we collectively can start addressing a new normal.