By Krunal Dangar, Head of Growth & Marketing, Fundkiss

With an eye to a digital future, Mauritius has been one of the early movers in Africa when it comes to introducing a Regulatory Sandbox License (RSL). Since it was established in 2016, the RSL has allowed both start-ups and established companies to roll out innovative projects for which a regulatory framework otherwise did not exist. 
 
Crucially for us at Fundkiss, Mauritius’ pioneering approach to FinTech regulatory frameworks has made it the first country in Sub-Saharan Africa to have a specific regulation for Peer-to-Peer (P2P) lending. Indeed, the first successful instance of a FinTech activity making it through the full regulatory cycle from the Economic Development Board’s pioneering RSL to an established framework by the Financial Services Commission (FSC) was seen by way of the P2P Lending Rules published last August. 

To give a brief overview of what P2P lending is all about, such platforms bring together people looking to invest money with prospective borrowers who are looking for a loan. Thus, P2P lending platforms serve to seamlessly and cost-effectively match lenders and borrowers over a digital medium that avoids the hassles of using intermediaries to perform the same activity, cutting down on all the cumbersome processes, time taken, and associated costs of traditional financing. 

Reflecting on an unprecedented year

Now, with this exciting technology firmly established as a regulated activity under the FSC’s P2P lending rules, and Fundkiss being the first operational platform to be granted a licence under this pioneering framework in April 2021, it is clear that the financial year from July 2020 to June 2021 has been an unprecedented year for us on several counts.

To begin with, the effects of the first confinement still lingered when we embarked upon the financial year in July 2020. The economic effects of the global pandemic were unleashed with a fury, with crucial business sectors like tourism reeling under the impact of COVID-19. This punishing year tested the resilience and spirit of the entire business community in Mauritius – and Fundkiss was no exception. 

Nevertheless, the team at Fundkiss persevered to overcome these heavy odds. 

To dwell on the five key highlights: 

• We supported 97 SMEs in FY21— more than twice the 47 projects funded in FY20. 
• Loan production at Fundkiss grew to MUR 52.8 mn, up 114% from MUR 24.64 mn in FY20. 
• Our lender community grew 57% to 2,622 registered lenders.
• Fundkiss repaid MUR 34.11 mn in total and MUR 5.39 mn in interest to our lenders over the last two years of our operations.
• The time to funding in FY21 was three times faster on average, down to 5 days with the shortest time taken to fund a project being a cool 3 minutes!

In other positive developments, our first institutional investor SME Equity Fund joined in August 2020. By the end of FY21, 16% of the total loan funding had come from this fast-growing segment.

Moreover, despite the challenging economic environment, only three loans have been declared as bad debts and are in legal recovery. Showing their solidarity for borrowers, a majority of lenders voted to grant moratoriums that were required in 37 projects to allow SMEs to roll forward their repayments.

Finally, in one of the positive fall-outs of the pandemic attested almost universally, COVID-19 has accelerated technology adoption across our country as well. This, taken together with our online application process and the team’s ability to work from home, means that our borrowers were able to safely and speedily submit applications throughout the second lockdown from March to June 2021. 

Harnessing the power of digital channels to support SMEs

What makes our team’s efforts even more impressive is that they were powered by the phygital platform that we have all come to associate with P2P lending in Mauritius. Indeed, not too many of you would know that the first Fundkiss platform was built with a hand-sketched wireframe. This humble origin story went on to become an alternate financing solution that continues to revolutionise how SMEs in Mauritius access financing. 

Having said that, against the backdrop of accelerated technological adoption, with nearly 200 projects listed on Fundkiss, we believed it was high time for a completely digital interface. This thought process has culminated in the launch of our new platform in August 2021, a project that has been in the offing for a year. At the outset, the website attempts to digitise the SME lending experience and take it to the next level, with the following features:

• Improved user navigation and better aesthetics;
• eKYC to enable potential lenders to complete their entire onboarding online;
• More in-depth insights on projects financed with a lender data dashboard; and
• A ‘Fundkiss Account’ feature that allows lenders to manage funds purely in the digital domain.

Apart from the functionality it enables, the upgraded website also offers a new face to Fundkiss. Needless to say, when we launched Fundkiss, our present portfolio of nearly 200 projects was a mere pipe dream. A website with the photos of our own SME borrowers was the need of the hour, for the audience to see the difference P2P loans over Fundkiss have made to the lives of our entrepreneurs. It is our fond hope that the new website does that – and more – with vibrant pictures of local SME owners who have realised their dreams after receiving crucial funding over our platform.

FinTech forward: Supporting SMEs to infinity and beyond

At the level of our firm, we look forward to a better FY22 as our new and improved website allows lenders and borrowers to enjoy a completely digital interface in the new normal. In the immediate future, we expect our total loan production to reach MUR 100 mn by the end of October as per projections. 

At a country level too, we foresee an economic revival as a good majority of our population is now vaccinated and more relaxed travel protocols are being unfolded as we speak.

We believe that innovation, agility and resilience will remain key to succeed in the normal next. Mauritius, as a forward looking and enterprising nation, commands all our innovation, agility and resilience, as we contribute to our nation’s economic recovery inspired by our intrepid entrepreneurs and engaged lenders.