A pedestrian in Lagos Island District, Lagos, Nigeria, Monday, November 14, 2022.

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SoLo Funds, a community-based lending platform that seeks to extend credit to underbanked and U.S. consumers long excluded from the financial services industry due to widespread discrimination in the lending process, is expanding overseas for the first time to Nigeria.

SoLo Funds, founded in 2018 by Rodney Williams and Travis Holoway (CEO), has grown to over 1 million users, the vast majority (82%) of which are in underserved ZIP codes in the US. The company has originated more than $200 million in loans and a total transaction volume of $400 million through fintech products to meet the needs of historically economically disenfranchised communities.

Williams said the expansion into Nigeria was the first step in further international growth.

“This is the test case. This is the template. This is the first,” Williams told CNBC after revealing Nigeria’s plans at the Aspen Festival of Ideas conference earlier this week. “We will not stop at Nigeria – we see Nigeria as a gateway to the continent,” he said.

Nigeria also has largest economy Africa and the fastest growing middle class. The state of the country’s economy is an important factor in SoLo’s decision, and SoLo sees its product as an important tool for empowering the middle class, giving them the opportunity to make ends meet during tough economic times and earn rewards when they do. More reliable cash flow.

The existing fintech ecosystem in Nigeria is also an advantage. “For us to do what we do, we have to collaborate,” Williams said. “We have to leverage many partners to deliver our solutions, and these partners have to go to the market and be successful in the market. In Nigeria, we see many examples of this.”

Opay and Flutterwave, which entered the 2021 CNBC Disruptor 50 list, are two examples of fintech unicorns that have achieved huge success in the country.

SoLo Funds ranked #50 on CNBC’s Disruptor 50 list for 2023.

Williams is one of only two founders (the other being Elon Musk) with two companies on the annual list. Williams, who comes from a background as a Procter & Gamble executive, first founded Lisnr, whose investors include Visa, Intel and Synchrony Financial, and has secured deals for its secure digital data transfer technology in eight countries.

Rodney Williams, Co-Founder, SoLo Funds

Siobhan Webb

In Nigeria, SoLo Funds has partnered with to paya mobile payment company, Platform capitalan African investment company based in Nigeria, and forge aheada startup community network.

Williams said the current lack of investment opportunities in Nigeria is part of the company’s market opportunity. Bank savings rates in Nigeria are well below inflation.

“The average Nigerian consumer hasn’t seen any growth in saving. That’s a characteristic of many developing countries, not just Nigeria. So it ultimately means that it has a very, very attractive population of citizens who want to grow their money ,” Williams said.

SoLo Funds users have the opportunity to lend small amounts of money, ranging from $50 to $1,000, to peers on the platform. The borrower lists the terms of the loan, including whether they are willing to tip the lender. Through these tricks, lenders are able to generate returns. About 99 percent of users choose to tip the lender, according to the company.

“We believe SoLo is the evolution of microfinance and community finance,” Williams said. “We’re building financial products for the masses, not just the rich.”

The mission has not been without controversy, with allegations that SoLo Funds is creating a new form of predatory short-term lending. Williams alluded to the controversy the company himself faced in his Aspen speech, telling attendees to “go Google it.”

Following the settlement of cases in California and Washington state, and the recent settlement of a case brought by Connecticut banking regulators, DC SoLo Funds has added several lawyers with extensive experience in banking, fintech and regulation. Throughout the controversy, Williams has argued that policymakers are not considering the needs of “average Americans” when making decisions.

“Every day I wake up,” he said, “I can see a single mom or dad putting food on the table. I can also see a single dad or mom giving back. And that payback can be paid for. Fees.” Their kids going out to the movies this weekend pays as much as it costs to maintain someone’s lights. This lets me know I’m doing the right thing. I’m excited to go to Nigeria and anywhere else in the world, we’re going to do this for more people in more places than I can imagine. ”

Many startups expanding internationally have had to pull back, especially as venture capital funding dries up and the growth-at-all-costs start-up strategy that dominated for a decade has been replaced by one focused on quicker profits.

The risks of expanding into middle-class markets internationally are very similar to those in the United States, Williams said.

“I just read a twitter thread that mentioned that banks are not serving (the middle class) because they say the service cost is too high. And they say this consumer is not worthy of credit, that’s why banks don’t serve They produce products. That’s the risk of making a product for the mass market,” Williams said. “We’ve come to the same conclusion or the same challenge, why build a product for everyone when, you know, you can build a product for the top 10 percent, And become a billion dollar company? ’ he added.

Williams said he plans to respond to international risks in the same way the U.S. does — through data, testing and working with ecosystem leaders. The complexities of US state lending regulations have prepared SoLo Funds for equally complex international offerings. “While international expansion sounds like a daunting task, when we analyze it, it’s very similar to launching a new product in every U.S. state,” he said.

The company plans to expand into additional international markets on multiple continents over the next 12 to 18 months, starting with key entry countries.

“We also identified that country in Latin America. We also identified that country in Southeast Asia,” Williams said.

NBCUniversal News Corp., a CNBC unit, is the media partner of the Aspen Festival of Ideas.

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