From Logistics to Lending: How AI is Unlocking Africa’s Trillion-Dollar SME Market
Imagine a market brimming with millions of ambitious entrepreneurs. They’re building businesses, creating jobs, and driving local economies. Yet, a vast majority of them share a common, invisible barrier: they are invisible to the global financial system. This isn’t a hypothetical scenario; it’s the reality for a huge portion of Small and Medium-sized Enterprises (SMEs) in Africa, a continent where these businesses form the very backbone of the economy.
The problem is a classic catch-22. To grow, SMEs need capital. To get capital from traditional banks, they need a credit history and collateral. But how can you build a credit history when no one will lend to you in the first place? This is the trillion-dollar paradox that has stifled growth for generations. Banks, with their rigid structures and high overheads, find it too risky and expensive to underwrite small loans for businesses without formal records.
But what if you could bypass the old rules? What if, instead of looking at past credit, you could use real-time data to predict future success? This is the story of how a logistics challenge at an e-commerce giant sparked a fintech revolution, powered by artificial intelligence, cloud computing, and a new way of thinking about risk. It’s the story of Tunde Kehinde and his startup, Lidya.
The Epiphany Forged in E-Commerce
Every great innovation often starts with a deep frustration. For Tunde Kehinde, that frustration began not in a bank, but in the bustling world of African e-commerce. As a co-founder of Jumia Nigeria, one of the continent’s largest online retailers, he had a front-row seat to the daily struggles of the merchants selling on his platform.
He saw their potential and their ambition. But he also saw a recurring bottleneck. A merchant would have a surge in orders for a popular product, but they couldn’t afford to buy more inventory to meet the demand. Their money was tied up, and a traditional bank loan was out of the question. As Kehinde noted, this wasn’t just the merchant’s problem; it was Jumia’s problem. The platform’s growth was directly tethered to the financial health of its sellers. <a href="https://www.ft.com/content/8a6ce5e6-f56
