Project detail - Fido Solutions Limited

Who is our prospective customer?

FIDO Solutions (FIDO) is a digital lender operating in Ghana and Uganda. The company empowers individuals and small businesses across Africa by providing small tickets, short term credit and other financial products. By leveraging technology, FIDO utilizes alternative data and artificial intelligence (AI) to underwrite more than 650,000 customers, granting them instant access to credit without a formal financial track record based on a credit score calculated by FIDO.

What is our funding objective?

FMO will invest USD 10 million in direct equity (from MASSIF) in FIDO’s Series B capital raise. The funding objective is to support FIDO’s loan book growth in Ghana and Uganda and to further expand into new African countries, while maintaining their goal of supporting bottom-of-pyramid (BoP) clients.

Why do we want to fund this investment?

FIDO provides access to finance to the BoP, which is in alignment with FMO’s commitment on reducing inequalities. Its client base mostly consists of young, BoP informal business owners who, in almost all instances, have never had access to finance due to a lack of formal financial track record.

What is the Environmental and Social categorization rationale?

E&S risk is deemed limited (risk classification C), with the potential environmental and social impact from operations being minimal. FIDO has been externally assessed for their commitment to Client Protection Principles (CPP), resulting in a 91/100 scoring, showing their commitment to responsible lending. As part of FMO’s investment, FIDO will implement a CPP Action Plan to further improve their practices. FIDO’s operations are not exposed to high-risk sectors and no IFC Performance Standards are triggered due to the small ticket sizes of the loans. As such, the operations have minimal or no adverse environmental or social impact. FMO analyses risks from different perspectives and assessments. In the case of microfinance investments, the E&S classification is typically low because the exposure generally is limited to retail and micro-entrepreneurs. The risks that might come with microfinance investments, such as, among others, over-indebtedness, transparency of interest rates, and responsible pricing, are covered by FMO in other assessments such as the Client Protection Principles (CPPs). In case of high contextual risk, a human right assessment can be carried out.