The Secret Sauce to Credit

When there are no jobs, everyone needs to hustle.??

But without capital, starting a hustle is almost impossible. ?

You can’t start an online transcription gig without a laptop and reliable internet. You can’t start a fruit stand without your first stock. ?

It's no secret that a lack of capital is holding young entrepreneurs back. ?

Yet there are plenty of credit providers in Kenya. From banks to, SACCOs, chamas and lending apps. ?

So why is credit still not working for young entrepreneurs??

If you’ve ever shopped around for a small business loan in Kenya, you will know.??

?? You have a great hustle, but you don’t have the papers to prove it.?

?? The rates are crazy!?

?? Comparing loans is a nightmare. Not even apples and oranges – more like apples and spaceships. ?

?? Understanding loan terms requires an advanced degree.?

If you DO get a loan, the nasty recovery practices will haunt you.?

At MESH, we have a hunch that community is the missing ingredient to a better working credit system for borrowers AND lenders.?Why??

First - It’s what is already working.??

Young people are banking on each other. ?

They have their own credit scoring system and they risk-rate each other.

They use it at the kiosk where they get groceries on credit.

Amongst friends and family.

In their chama groups.

This type of ‘warm money’ comes with a very different repayment behavior than formal loans. ?

You pay back warm money sooner – not just because your social capital is at stake, but also because you can bank on it. ?

The ‘cold money’ from institutes will have to wait a little longer. There is no sense of communal reciprocity. ?

Yet the formal world disregards this social capital because it is informal, and they can’t see it.

The lenders that do use social capital often use it destructively.?

The information that financial institutions can see right now is only a fraction of what's out there. If they lean in, there is a wealth of information that they could tap into. ?

We see it happen all the time.

On MESH, young people are building connections, partnering on the platform, spending time and bundles to watch financial literacy videos. These are all data points that can serve as an asset.

We want to make these community-based relationships bankable. ?

A MESHER’s digital footprint can, with their permission, become a credential for services in the formal world. ? ?

Second, the future is informal.??

We don’t have a crystal ball at MESH. We can’t predict with absolute certainty what the world of work will look like in five years.??

But we think it's a safe bet that there will not be many steady monthly paychecks involved.??

In 2024, virtually all young people in Kenya today need to hustle for their income. And this generation is embracing the challenge like no other before it.??

Young entrepreneurs in the informal sector in Kenya are already adding 530 million to the economy monthly.??

Yet financial institutions are still looking for?traditional data points and history that belong to an old-school view of the economy.? ?

We need to meet young people where they are, and where the economy is headed. ?

We’re not just thinking about this. We’re building it out as we speak.??

Last month, we launched our first credit product in partnership with 4G Capital under the Jiinue Growth Program*.??

MESHERS can access a 2–3-month loan of 5000 to 200,000KES at 0.83% per month. It's one of the lowest rates out there, and it comes with an entire system of support.

?? We can connect MESHERS in groups. ?

?? Members share the best way to invest a loan. ?

?? MESHERS share their loan mistakes. ?

??? We have snackable content on money that doesn’t bore you out. ?

????You can get the support you need when things are not working out.?

It’s finance embedded in community.?

Or, as the pros would say, “It’s a wrap-around experience”.?. .?

This launch is an experiment.?We want to find out if community-based lending is better for lenders and borrowers.??

We’ll keep you up to date on how it’s going in this newsletter over the next months. ?

Stick around to see if we’ll have to eat our own words ??.?

Cheers,

Anuj Tanna

CEO & Co-founder of MESH.

PS: If you're a forward-thinking organization that wants to seize this opportunity, chat with my colleague George Issaias . 155,000 Young entrepreneurs are ready to partner with you!?

SNACKS?????

You will never guess how many units MESHERS sell for Unilever in a given month...

Dear Mastercard, MESHER Ibrahim has new ad copy for you!

Yes, this is a biz. ?

Check out who is NOT the CEO of MESH. ?

*A product supported under the Jiinue Growth Program (2022-2027)

#JiinueGrowthProgram

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