Fintech company Asaak partners Cauris to establish US$20m credit facility

UGANDA – Asaak, a provider of mobile-based equipment financing for gig workers in Uganda, has partnered with Cauris to establish a US$20 million credit facility.

Cauris is a global private credit investment firm dedicated to promoting financial inclusion in emerging nations through the use of DeFi blockchain technology. This will be Cauris’ third investment in Africa.

“We are excited to partner with forward-thinking investors like Cauris as we continue to scale our asset financing solutions across Africa,” said Dylan Terrill, Co-Founder and Chief Business Officer of Asaak.

“In a continent full of opportunity, mobility is the key to connect and bolster economies. Through this partnership, we’re enabling tens of thousands of individuals to become business owners, bridging the employment gap and driving local economies forward.”

Asaak, founded in Kampala in 2019, provides asset financing to African gig workers. According to the company, drivers for ride-hailing companies typically spend nearly 50% of their earnings on vehicle rent, are required to return leased motorcycles daily, incur high commuting costs, and have limited access to financing alternatives.

To address this issue, Asaak leverages its proprietary underwriting technologies to provide drivers with the opportunity to buy their automobiles via “boda” loans.

Boda bodas are motorbike taxis that are a common means of transport in Uganda and throughout Africa.

The company’s technology enables it to evaluate a prospective borrower’s creditworthiness by analyzing thousands of data points, doing digital verification, and making a credit judgment.

The organization can then monitor critical borrower data points and use them to promote lending for tangential loan products including fuel loans, personal loans, and smartphone loans. Asaak’s loans are secured by the financed equipment.

Asaak partners with international mobility companies, e-commerce platforms, and credit unions such as Bolt, Safeboda, and Jumia to keep customer acquisition costs low and to ensure a large borrower pool, reliable underwriting data such as customer ratings, trips completed, and money earned, and legal guarantees.

Thousands of loans have already been made with extremely low default rates. It has also seen phenomenal growth in Uganda thus far. Uganda has one of the highest rates of self-employment in the world, and about 40% of the population is unbanked.

This dynamic results in the significant financial vacuum for gig workers that Asaak fills. According to the firm, there is an estimated US$100 billion in unmet demand for vehicle financing in Africa’s ride-hailing sector.

“We are happy to support Asaak in bringing innovative financing solutions to boda-boda drivers and other gig workers in Uganda,” said Azer Songnaba, Chief Investment Officer of Cauris.

“We recognize the immense importance of the gig economy in Africa and the significant need for tailored liquidity and financial solutions for this critical element of the continent’s economic activity.”

Cauris partners with fintechs that are making financial inclusion a reality for tens of millions of consumers and small companies across the Global South — with financings in Africa, Asia, and Latin America.

Cauris leverages debt to enable its partners to scale efforts to give historically underbanked people with access to financial services that improve their lives and livelihoods.

Cauris intends to leverage Decentralized Finance (DeFi) to facilitate efforts to extend financial services to 100 million people, in accordance with his mission to empower individuals and small businesses through credit; to enable economic growth in emerging markets; and to accelerate the global middle class’s growth.

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