By Melvin Akaba
Stanbic Bank Ghana has provided a USD5-million debt financing facility to Fido, a digital microfinance company, to expand its financial services to unbanked populations across Ghana.
Fido, which leverages artificial intelligence and machine learning for credit scoring, has been instrumental in providing micro loans to individuals and small businesses that typically lack access to traditional banking services.
Founded in 2015 and operational since 2016, Fido has significantly grown in popularity, especially for its use of cutting-edge technology to make real-time lending decisions. This growth prompted Stanbic Bank to offer additional funding in 2024, building on an initial loan provided in 2021.
According to Melvin Akaba, Head, Corporate Financing Solutions, Corporate and Investment Banking at Stanbic Bank, the decision to support Fido stems from the strategic alignment between both organizations. “Fido’s innovative model allows them to reach customers that traditional banks often cannot serve, particularly due to regulatory and structural limitations.”
Stanbic Bank’s funding to Fido is part of the Bank’s broader commitment to financial inclusion, a key priority for the financial services institution. As Mr. Akaba explains, many individuals at the lower end of the economic pyramid are excluded from formal banking due to lack of financial history or collateral.
Fido’s AI-driven platform addresses this gap by enabling these individuals to access small loans and build a digital financial footprint, thus creating a path toward eventual inclusion in the formal banking sector.
Alon Eitan, Group CEO of Fido, expressed appreciation for Stanbic Bank’s continued support, noting how pivotal the deal will be in enhancing their mission. “This new USD5-million facility allows us to continue providing capital to individuals and small businesses that need it the most. With this funding, we can reach tens of thousands of customers with the potential to create up to 100,000 jobs.”
Mr. Eitan highlighted that Fido serves a largely unbanked population, with 90% of its customers having no prior financial history. Half of these customers use the credit for business purposes, with a significant portion of them being women-led businesses. Fido’s digital-first, mobile-app-based model also enables them to serve rural populations who lack access to physical bank branches, further extending financial services to the most remote areas of the country.
There is a significant gap in access to financial services between rural and urban areas in Ghana. Recent data shows that while 51% of the urban population has access to physical bank branches, only 3.3% of rural communities enjoy the same convenience. Urban residents are also more likely to have a bank within two kilometers of their homes, unlike those in smaller towns and villages.
Although there are 147 registered rural and community banks as of January 2023, the availability of banking services in rural areas remains insufficient. Fido’s innovative model therefore becomes a perfect solution to close the distribution gap.
With the infusion of new funds from Stanbic Bank, Fido is also looking to significantly expand its Research and Development (R&D) team. This expansion will enable them enhance their product offerings and improve their platform’s capabilities, ensuring that they continue to meet the evolving needs of their customers efficiently. Over the past decade, however, discussions on financial inclusion have expanded, with a focus on low and moderate-income communities in both rural and urban areas.
Partnerships between banks and fintech companies have played a pivotal role in this progress, leveraging consumer data to better serve customers and rebuild trust in communities that have faced financial discrimination.
As these collaborations deepen, the financial services industry becomes more capable of addressing the needs of those historically excluded from the banking system.
Sebastian Quansah, CEO of Fido Ghana, who plays a pivotal role in leading the team, expressed his appreciation for Stanbic Bank’s support in driving Fido’s financial inclusion agenda.
Stanbic Bank’s financing is expected to play a crucial role in supporting Fido’s continued growth in Ghana and beyond. The Fido model has proven successful in Ghana and is already being replicated in other African markets, such as Uganda, where similar challenges exist.
This partnership demonstrates the growing role of fintech in driving financial inclusion and the willingness of traditional banks like Stanbic Bank to collaborate with innovative digital platforms to reach underserved populations.
