Nigerian startup Regxta is using an agency model to offer quick and easy access to financial services for unbanked individuals and micro-businesses in rural and peri-urban communities across Africa.
The Regxta mobile app is powered by advanced data science and artificial intelligence, and provides instant underwriting and loan disbursement to those without a borrowing history. Users can also open accounts, save money, and generate financial records with the help of trained community agents.
The loan management system (LMS) tool enables the automation of credit decisions, control, and agent monitoring and the customers, and generates reports for effective decision making.
“The tool assists in automating and streamlining the entire loan life cycle, including loan servicing, reporting, customer care, syndication, and customer monitoring. It acts as a centralised data storage unit that is used for retaining and managing customer information, creating new loans, and keeping a record of all financial statements for the lenders,” Rukayat Bello, MD and CEO of Regxta, told Disrupt Africa.
Regxta was launched in 2021 after Bello was inspired by her mother’s story. An industrious micro business owner in a rural community in Lagos, she nonetheless could not access loans and other financial services to scale her business, because she had no credit history. There are over 1,000 microfinance banks in Nigeria offering credit to unbanked customers, but they are often very bureaucratic in their processes.
“They make use of stressful paperwork documentation and have high interest rates due to the high cost of operations and tedious approval processes,” said Bello. “This leads to a continuous gap in the financial sector, which leads to an increase in poverty and hunger.”
Regxta’s app aims to fill this gap, offering loans to people with no borrowing history, while also allowing users to open digital wallets, save money, and generate financial records through well-trained community agents.
Uptake has been impressive. Since launch, Regxta has processed over US$1.3 million in transaction volume with over 4,500 customers, through more than 100 agents. It has also generated over US$150,000 in revenue, from charging monthly interest on loans.
Bootstrapped until now, the startup is now raising a pre-seed round to support the next phase of growth, and has currently banked over US$100,000 from a number of investors.
Bello said Regxta plans to build third party APIs that can be used by microfinance banks, trade unions, cooperative societies, local money lenders, thrift collectors, and religious groups to coordinate their financial activities.
“Regxta will also be processing debit cards for their customers for easy access to their digital wallets, and will be facilitating POS devices for our customers,” she said. “Regxta processes big data on a daily basis for the unbanked customer. In the near future, Regxta aims to be the first credit assessment and data analytics platform for the underserved market in Africa which is one of the biggest problems on the continent.”
The startup currently operates in rural and semi-urban communities in Lagos, and acquires customers predominantly through an agent network in various communities, and through referrals.
“These agents onboard customers via the mobile app, and offer their products and services such as account opening, savings, loans, micro pension and insurance, and bookkeeping to them,” Bello said.
“We are looking to expand to more states in Nigeria in 2024 and 2025, and expand to other African countries in 2026.”
