Interview: JUMO's Joe Mucheru on AI's role in fintech

JUMO President Joe Mucheru joined Connecting Africa Editor Paula Gilbert for a video interview to talk about the banking technology company's work across Africa and how it's using artificial intelligence (AI) to open up the fintech market to more Africans.

Mucheru explained that JUMO has developed technology which provides next-generation banking infrastructure for financial institutions and telecoms operators to be able to provide lending and savings products to people who have previously been excluded from the financial system.

JUMO was founded in 2015 and has so far enabled the disbursement of more than US$6 billion in loans to over 25 million customers and small businesses.

"We are almost doing a loan per second," he said, adding that the company aims to scale and expand this year.

The company operates in across Ghana, Tanzania, Kenya, Uganda, Zambia, Côte d'Ivoire and South Africa, and Mucheru said the group hopes to add four or five more African markets to its portfolio by the end of 2024.

AI's role in fintech

Mucheru explained how JUMO uses AI and machine learning to build accurate credit scores and targeted financial products for people who don't have a formal financial identity, collateral, or credit records.

He said that one of the biggest ways that AI is impacting the fintech ecosystem is its ability to bring previously excluded people into the system.

If people have never been banked, the traditional banking system has no data to score them and will not provide them with loans. However, by using data from mobile operators (with the permission of the user) AI systems are able to come up with credit scores for even those who have never had a traditional financial account.

"The banking partners that we operate with are now seeing the huge value that AI is providing and the regulators themselves are also seeing how technology is actually making a difference," Mucheru explained.

Mucheru served as Cabinet Secretary in Kenya's Ministry of ICT, Innovation and Youth Affairs between 2015 and 2022 and shared his views on how African governments and regulators could better aid fintech adoption in Africa.

He also gave more details about how JUMO partners with telecoms operators like MTN, Tigo and Airtel and gave more insights into the company's recent partnership with MTN to provide short-term loans in South Africa.

"We have been working with MTN for a long time in other markets, but South Africa now became a key market. There are still a lot of consumers who are using mobile money and are keen to be able to get access to credit, so we have been working with them to see how we can reach as many of the people in South Arica that require these loans as possible," he said.

He spoke about why lending is such an important segment in financial services and also how JUMO is seeing growth in other financial services products like saving. He also shared his insights on how smartphone growth in Africa has impacted the fintech market but why it is still important to have feature phone options like USSD for low-income users.

— Paula Gilbert, Editor, Connecting Africa