CARMA, a tech-startup filling the credit-data gap in sub-Saharan Africa, announced Tuesday an early-stage venture funding round led by Microtraction, a venture capital firm that invests in Africa’s most remarkable teams at the earliest stage of their venture.
The financing will be used to expand CARMA’s operations across the continent and launch its headquarters in Lagos, Nigeria.
The establishment of the Lagos office, led by Ted Martynov, co-founder, and CEO, comes as the company looks to foster seamless customer support and account management by providing a fully decentralized protocol of data sharing for enterprises to fuel credit assessments with extra data points. This will help lending and non-lending organizations monetize their data to create a passive revenue stream. The company also connects enterprises by providing a data supply chain for organizations with access to CARMA services, contributing to data-driven business decisions.
According to the World Bank private credit bureau coverage 2019, only 14% of adults in Nigeria have a credit history from credit bureaus and only financial institutions are currently submitting data on individuals and commercial entities regularly. As a one-stop-shop for pan-industry data, lenders in Nigeria can now access data on a real-time basis via CARMA’s decentralized technology while data contributors will also have access to monetize their data in a secure data marketplace.
The economic impact caused by the global health pandemic has had a severe impact on the digital lending space across the continent as the number of non-performing loans continue to be on the rise due to job losses and pay-cuts. The major challenge lending organisations have been facing is getting access to aggregated credit data for proper credit assessment. As digital financial services are broadening and speeding up financial inclusion in many African countries, specifically where digital mobile lending has already become advanced, data sharing between organizations remains crucial for lenders to provide high-quality loans and prevent over-indebtedness.
CARMA’s Co-founder and CEO, Ted Martynov, said: “Our early-stage venture funding allows us to invest in growing our presence across sub-Saharan Africa and our ability to address the gap in the credit data ecosystem while strengthening our network of clients. We are also focusing on supporting companies with quality data in the credit decision process to avoid non-performing loans. We anticipate on strengthening our services across the region, which will bring us closer to helping companies enhance data sharing to build proper credit assessment procedures.”
A partner at Microtraction, Chidinma Iwueke, said, “We are excited to be CARMA’s partner as part of their Africa rollout. Microtraction supports several great tech teams across the continent and we are acutely aware of the gap in access to credit data, which we believe is a fundamental one to fill. Providing a solution that addresses this lack of data improves the quality of business processes and also helps the mass populous with access to financing, which of course, is very critical during these times as the world continues to fight a health and economic crisis. We look forward to working with CARMA as we continue to support teams working to address infrastructural challenges across Africa.”
CARMA is the world’s first data marketplace founded in 2020 by an international team of lending and tech entrepreneurs. The company provides services for mutual access to internal data for enterprises enabling data-driven business decisions and improves credit assessment quality for professional lenders.
