Bloom Impact, digitizing access to finance for small African businesses
By the year 2034, the African workforce will surpass in size both that of China and India. So what are the employment prospects for these young African workers? The key to employment opportunities is inarguably business growth. Here in Ghana, the entrepreneurial spirit is healthy and robust. However, small businesses face significant challenges, especially when trying to access financial services to grow their business and become financially literate. There is an urgent need for a solution that helps small business owners conveniently find affordable and suitable financial services. This need is where Bloom Impact comes in, an African social enterprise based in Ghana.
Bloom Impact provides a digital marketplace for entrepreneurs to access financial products right from their smartphone – for free. Using the Bloom mobile app, entrepreneurs can create a digital profile that easily enables them to apply for loans, savings or checking accounts. Bloom Impact’s digital platform and artificial intelligence algorithm then match entrepreneurs with the best financial products and providers on the market to meet their needs.
After speaking with hundreds of business owners across Ghana, it is clear that accessing credit is no simple task. Knowing what documentation you need to present at the bank is only part of the battle. Many entrepreneurs are unable to take time away from their business to travel back and forth numerous times (in horrendous traffic!) to banks. Further, they are often unable to deduce what institution they should be banking with nor which product best suits their needs.
Even when these hurdles are surpassed, a good percentage of small business loan applications are denied. The innovative advantage of Bloom Impact is that the app guides users through a simple, user-friendly process to submit any required information and documents and the scoring and matching algorithm determines eligibility and selects the best products for them. Further, entrepreneurs can learn along the way through the financial literacy guidance provided in the app – learning about terms, conditions, eligibility requirements and differences among products. Entrepreneurs can simply take a photo of their identification and other relevant documentation, and submit through the app for verification. In addition to making the application substantially easier for loan applicants, this process also represents significant time, risk and cost-savings for financial service providers. Since customers are already pre-qualified, through applying Bloom’s innovative technology, this reduces risks for banks, increases turn-around-time and cuts down the bank’s customer acquisition costs. The same efficiencies and conveniences apply for Savings & Current account products also offered through the platform.
Above all, a significant impact thus far of Bloom Impact is the way in which it is changing lives by improving access to capital. Take for example Bloom Impact customer, Daniel, who is 80 years young and lives and works in Tema, Ghana. After being denied for a loan in the past for his small yet successful bag making business, he was introduced to Bloom Impact and applied and got approved for a small business loan. With this working capital, has been able to branch out into new products, and is hiring three new employees next month to handle the increasing demand.
Or Vida, who owns a profitable beauty salon in Accra and is also a Bloom Impact customer. After her husband fell ill and subsequently lost his job, Vida unexpectedly had to manage all the family expenses, and her business began to suffer. By using the Bloom Impact app, she learned about her credit options and applied for her first business loan. After receiving her loan, she was able to purchase the equipment and stock she required to maintain and grow her beauty salon.
Speaking to Daniel, Vida and countless other entrepreneurs in Ghana, we find that their passion, determination and work ethic knows no limits. At Bloom Impact, we strive to provide the tools for success to the very capable entrepreneurs of the small business community to ensure healthy, stable local economies and job opportunities in Ghana and beyond.