Singapore headquartered FinTech company, Boost Capital, uses innovative technology to make it cheaper and easier for unbanked and underbanked entrepreneurs to secure loans, and offers opportunities for users to improve their financial literacy. The innovative company won the Women’s World Banking’s Fintech Innovation Challenge 2021, was selected as one of the Inclusive Fintech 50 in 2021, and recently took a top 10 spot in Echelon’s 2023 Top100 startup completion.
“My friend, and now co-Founder, and I were talking about how easy it had become to send remittances across the world, but how complicated it still was to get a loan from the bank down the street where we lived in Phnom Penh. We decided there had to be a better way,” recalled Boost co-founder Lucinda Revell.
“We wanted to see if there would be demand for digital loans in emerging markets like Cambodia. We put together a chat bot as a test, launched it on a weekend, and by the end of the weekend had 500 loan applications which we passed onto a bank partner. At that moment we realized that chat had the power of inclusion,” Revell said.
The vast majority of companies in Cambodia are micro, small and medium sized enterprises. Two-thirds of the micro and small operations and one-quarter of the medium sized companies are women-owned or run, yet many women entrepreneurs struggle to manage or expand their businesses because they have difficulty accessing finance. Boost helps banks expand their offerings to include such entrepreneurs who have previously been unbanked or underbanked.
Revell described how, using Boost tech, the company helped a bank to see that they had been declining roughly a third of applicants because the bank did not offer a loan product for entrepreneurs who could not provide collateral. With support from the United Nations Economic and Social Commission for ASIA and the Pacific (ESCAP) and the United Nations Capital Development Fund (UNCDF), Boost built a chat-based business income assessment tool, and the bank subsequently launched a new loan type tailored to women entrepreneurs.
Banks using Boost’s technology can afford to serve lower-margin segments because the tech reduces bank operating expenses by up to 10x versus the traditional in-person lending process at physical branches. Boost passes their faster and lower processing savings onto their consumers. In Cambodia, Boost’s banking partners can offer loans with interest rates as much as 20% below market rates.
“It’s a nerve-wracking moment when you think of something and no one else is doing it: realizing how valuable chat is to reach a market that has been excluded,” said Revell. “So far, chat-based financial services for emerging markets is a niche for the underserviced.”
Revell says Cambodian Product Manager Ly Porhour has been a driving force in understanding and designing for the local market needs and sensibilities. Ly explains that her product designs are based on her deep understanding of women’s economic needs in Cambodia.
“My mom was a single mom who had a business, so that definitely influenced me. I have always been an advocate for women’s empowerment, and our chat bot is definitely changing lives,” said Ly, who herself is a pioneer as a Cambodian woman tech designer.
“We know this one grocery shop owner who always wanted to stock more and different products like rice, but she didn’t have the capital to do it. With the help of Boost she has been able to grow her business,” added Ly.
The chat-based application mirrors in-person credit interviews traditionally held in in banks, and Boost conducts the loan/savings interviews in local languages. Moreover, education modules are offered in local languages through chat and live digital learning sessions.
Boost Capital is one among 15 fintech start-ups supported by ESCAP’s Catalyzing Women’s Entrepreneurship Project, funded by the Government of Canada, as part of a challenge fund implemented in partnership with UNCDF.
ESCAP has been working to foster an enabling policy environment in countries across Asia and the Pacific and Latin America, in partnership with the Government of Colombia, to allow innovative businesses models that offer inclusive solutions, such as Boost Capital, to flourish.