How Nigeria’s Owoafara is connecting small businesses with finance, growth support

Nigerian startup Owoafara is on a mission to help small businesses grow and scale sustainably by connecting them with finance and business services.

Founded in January 2019, Owoafara was launched to solve the access to finance and business support problem of over 50 million underserved small businesses.

‘Tale Alimi, who co-founded Owoafara alongside Sally-Ann Ezekiel, said the startup’s first MVP, launched in November 2019, was a credit scoring and fund-matching platform to give small businesses a credit score and match them with financial institutions that would fund them.

“We have over 15 financial institutions signed up on the platform and have been able to facilitate US$100,000 in transactions,” she said.

“However, we soon realised that most small businesses do not meet the typical criteria of traditional financial institutions so the unit economics did not make sense for us to build a sustainable business.”

So in May this year, the startup launched Rouzo, a debt crowd-funding platform that uses Owoafara’s credit scoring algorithm to verify small businesses and then lends to them directly from money invested on the platform by users. It has also rolled out Suppotr, which helps companies access business services.

The lack of support available to small businesses in Nigeria became evident to Alimi when she was running a direct to consumer fashion brand a couple of years ago.

“Sales grew fast, to thousands of dollars in GMV, but I could not get access to loans to expand production and distribution. I later lost the business to a shark investor,” she said.

“Sally-Ann had also worked in financial services previously and tried to pitch financial institutions to adopt the product Owoafara was trying to create. When our efforts were not successful, we joined forces to create this company.”

The startup, which has raised a small “friends and family” funding round and took part in the Labs by ARM accelerator earlier this year, has verified over 450 businesses since it launched Rouzo, and is currently growing its major metrics by almost 100 per cent month-on-month.

For now Owoafara is focused on Lagos, but Alimi said it has expansion plans, “We plan to expand to five major cities within Nigeria in the next 12 months, before we start regional expansion out of Nigeria,” she said.

The startup makes money from commission, fees, and the spread it gets between the asset under management and the loans under management. “Our revenues are growing over 80 per cent month-on-month,” said Alimi.