Jeff Raises $1M for Fintech in Southeast Asia - Alternative Credit Scoring

Addressing Financial Inclusion in Southeast Asia

The World Bank reports that over a billion individuals in South and East Asia are without access to traditional banking services. This lack of access often creates obstacles in obtaining loans and other essential financial products due to the absence of established financial histories, such as a credit score.

Jeff: A Loan Brokerage Platform

Jeff’s loan brokerage platform was developed to facilitate the integration of alternative data scoring for financial service providers. This aims to broaden their reach to potential borrowers who are currently underserved by conventional lending institutions.

Recent Funding and Expansion Plans

The startup, having launched its application in Vietnam last year, recently announced a $1 million funding round. This investment was spearheaded by the Estonian Business Angels Network (EstBAN). The capital secured will be allocated towards expansion into additional Southeast Asian markets, specifically Indonesia and the Philippines.

Furthermore, the funding will support the introduction of new offerings, including complimentary credit score access, insurance options, digital discount coupons, and mobile wallet cashbacks.

Current User Base and Future Vision

Jeff presently boasts a user base exceeding 300,000 in Vietnam. Despite being headquartered in Latvia, the company remains focused on serving the unbanked population of South and Southeast Asia, as stated by founder and CEO Toms Niparts.

The long-term objective is to establish a “super app” that integrates personalized loan comparisons with supplementary services like e-commerce, mobile top-ups, and online discounts.

Founder’s Background and Market Insight

Prior to founding Jeff, Niparts served as CEO of Spain for Digital Finance International, a fintech firm under the Finstar Financial Group, which has investments spanning over 30 countries. This experience provided him with valuable insights into the nuances of financial services across diverse markets.

Identifying a Critical Market Need

Niparts observed that in Southeast Asian nations, a significant number of loan applications were declined not due to poor credit or low income, but rather due to insufficient data available on applicants. While some lenders were exploring alternative data scoring, the process was often complex, lengthy, and costly.

A Centralized Solution

“This represents a substantial challenge for a large segment of the global population, and it logically follows that a centralized solution should be developed,” Niparts explained.

Partnerships and Pipeline Growth

Currently, Jeff maintains between 12 and 15 active lending partners in Vietnam, with an additional eight to ten being onboarded. The company’s pipeline in Vietnam encompasses approximately 80 to 100 potential partners, and the new funding will accelerate the onboarding process.

In Indonesia, around 40 potential partners have been identified, representing only an initial exploration of the market. The forecast anticipates a pipeline expansion to 150-200 banks and partners in Indonesia by 2021.

The Value Proposition for Lenders

Jeff’s core strength lies in its ability to accurately assess creditworthiness using alternative data sources. This translates to more pre-qualified leads and access to a broader customer base for lenders.

Data Sources and Credit Scoring

“Building a credit score is an ongoing process, and we are in the initial phases,” Niparts stated. The current system relies primarily on publicly available information and data provided with client consent. This includes behavioral analytics, metadata from smart devices, data from social media platforms, and other sources with open APIs.

Strategic Partnerships and Integration

As Jeff expands, it intends to forge partnerships with mobile wallets, telecom companies, and consumer applications. The company is also developing a lender toolkit, comprising a bank portal and lender API, to streamline the integration process.

User Onboarding and Data Enrichment

Borrowers initiate the process with Jeff’s chatbot, providing basic information such as name, contact details, desired loan amount, and loan purpose. Enhancing their profiles with additional details and data sources increases their approval chances and unlocks more favorable offers.

This may involve uploading documents, connecting social media accounts, or consenting to share smart device metadata.

Expanding Service Offerings

Jeff’s current partners offer near-prime, peer-to-peer, and digital lending services, including unsecured consumer loans, installment loans, and motorbike financing. Plans are underway to introduce additional loan products, as well as collaborations in insurance, credit cards, and other traditional banking services.

The Vision of a Super App

“Our ambition for Jeff is to evolve into a super app, providing access to financial services previously unavailable, alongside additional benefits and discounts,” Niparts said. “This approach also allows us to gather more data and insights into creditworthiness and demand, continually improving the accuracy and value of Jeff’s credit score.”

Competitive Landscape

The fintech sector focused on financial inclusion is experiencing rapid growth in Southeast Asia. Jeff’s competitors can be categorized into two main groups: comparison portals like TopBank, TheBank, and GoBear (which is closing), and companies like CredoLab, Seon, and Kalap, which offer third-party services like data insights and fraud prevention.

Jeff’s Differentiated Approach

Jeff aims to “be a one-stop shop for both,” Niparts added. “We provide both clients and lenders with deeper insights, while maintaining direct interaction with users. This addresses the core need for comparing and accessing financial services, while also offering a growing range of discounts and benefits.”