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In Profile: Rajat Dayal, CEO of Yabx

The need for financial services in underbanked communities is paramount, especially in developing markets. One firm looking to democratise access to finance in said communities is Yabx.

Yabx is an AI-based banking platform enabling banks, financial service providers, payment providers, telecom networks, retailers and other networks in emerging markets to offer tailored credit products to their end customers.

To learn more about the company, we spoke to Rajat Dayal, Yabx’s CEO, as he explained how he came to be a part of the AI-based banking platform. As CEO, Dayal combines strategic vision with a commitment to responsible growth, positioning Yabx as a key player in transforming the financial landscape in emerging markets.

Tell us more about your company and its purpose
Rajat Dayal, CEO, Yabx
Rajat Dayal, CEO, Yabx

Yabx was founded in 2018 with a mission to solve for the vast credit gap in emerging markets. Our hypothesis is that this gap exists due to the lack of credit infrastructure. Yabx has been on this journey to build this credit infrastructure ground up and enable financial access for the underserved.

We believe access to credit is extremely important to grow the small and medium businesses which are the backbone of emerging economies. Our platform leverages alternate data sources, enhanced digital journeys, and real-time decisioning to drive responsible growth in the financial sector.

What are some of your recent achievements you’d like to highlight?

Yabx has achieved significant milestones, addressing critical challenges faced by banks in Africa. Just in 2023 Yabx disbursed over 20 million loans to 2.4 million consumers and MSMEs through the platform. These achievements have impressive real-world implications with individuals in underserved regions. This business case was also awarded the Best BNPL solution at Finovate in 2023.

Apart from that, over the course of the last 12 months, we launched unique loans products in Zambia, Malawi, Tanzania and Jordan. Further, we signed a partnership with Standard Chartered Ventures to create a pan-African digital bank. We’re also entering into partnerships with merchant networks like taxi-cab aggregators, pharmacy networks, school fees enablers, and a number of other such networks to roll out embedded credit products.

How did you get into the fintech industry?

I have always believed that tech can solve real-world business problems. In the early 2000s, I started my career building the packet core network where we worked on switches which could process high-speed internet traffic over mobile networks. We worked on how video could be streamed to mobile phones ensuring the customer got high QoS and the best experience.

In the late 2000s, in an almost diametrically opposite shift, I worked with consulting firms primarily using data to solve problems for some of the largest banks and financial service providers. We worked on data-led approaches to solving problems related to customer acquisition, retention, and risk.

In 2012-13, I happened to travel for work extensively in Africa and had firsthand experience in overseeing the deployment of mobile financial services across sub-Saharan Africa. An entire network of payment systems was rolled out integrated with billers, banks and merchants. The uptake was phenomenal as there was an unmet need that got fulfilled.

Migrant workers in metro cities used wallets to start sending money home, payment of utility bills became so much easier, and many such use-cases started emerging. I have had a cockpit view of the disruption that has happened.

I am really excited and I believe what we are doing in case of creating this credit infrastructure could be revolutionary.

What’s the best thing about working in the fintech industry?

The speed and scale at which you see impact is unbelievable. In six months of starting up in a new country, we were impacting lives of more than a million customers. I am not sure there were many industries. Now, there are a few reasons why fintech is relevant at this time.

First and foremost, there have been rapid enhancements in compute and storage infrastructures to process large amounts of data which enterprises have captured over the years.  Secondly, billions of people can be accessed through their mobile devices.

Governments and regulatory bodies are actively supporting initiatives aimed at increasing financial inclusion. They are implementing policies and regulations that promote innovation while ensuring consumer protection and financial stability. This regulatory support has created a conducive environment for fintech companies and other stakeholders to drive initiatives for financial inclusion.

This inclusivity enables more individuals and businesses to obtain affordable credit, ultimately fostering a better chance at empowering their own lives. I am a firm believer in the power of strategic partnerships to provide this disruption in FinTech to drive positive change and democratise access to financial opportunities.

What frustrates you most about the fintech industry?

For me, the fintech industry provides the bedrock on which a number of other industries stand on. Making it easier for people and companies to do purchases, remitting money across long distances, having easy access to credit to support your business is as important to a small business as it is to large enterprises. Further, when you are dealing with money, like we do, we need to create guardrails and capabilities to manage various threats of fraud, risk, data privacy etc. which could have massive impact.

It requires experience, deep know-how and investment to create this bedrock. I see several passionate startups delving into financial platforms with little or no know-how on how to protect these risks which are starting up to make an easy buck. I think from my perspective, it is important that any credit (or financial infrastructure) player needs to be aware of the risks and the ways to mitigate them as it impacts consumer confidence.

How have your previous roles influenced your career?

I have been lucky to work with some really smart people early in my career.  These people have been passionate about solving difficult problems. I think some of the determination and resolve of these people has rubbed off on me.

Right now, I am passionate about the work we do, the people with who I am working with and the impact we are creating. It just happens that we are solving the problem of financial inclusion in emerging markets.

What’s the best mistake you’ve ever made?

The best mistake that I ever made was underestimating the demand of credit. When we started, we believed we will have to ‘push’ our products in the market. The basic premise was that we used to get four to five calls from banks every week offering credit cards or personal loans.

So, we made the mistake of investing in infrastructure for marketing our financial offerings. To our surprise, the credit gap is so humongous that almost 40-50 per cent of our eligible base opted into our product within the first three months. Having said that, the pricing and experience we offered were distinguished in the market.

What has the future got in store for your company?

The future of Yabx looks promising as we continue to champion responsible lending, growth, and innovation in developing markets. I’m optimistic about the role that Yabx will play in the conversation surrounding the benefits of democratising credit and addressing the underserved population’s financial needs.

As we operate in 22+ countries around the world, we aim to expand to newer geographies in Africa, Asia and Latin America and continue to have a positive impact on the lives of our end customers. We believe we are creating a legacy that will last beyond our lifetimes.

What are the next key talking points or challenges for your industry as a whole?

In 2024, financial literacy will be a crucial talking point for the industry. Financial literacy is the ability to understand finance. It refers to the set of skills and knowledge that allows an individual to make informed and effective financial decisions.

It’s important for customers to know how to open a bank account, how do you benefit while saving into your account? How do banks charge interest for credit? Per a study I read only 26 per cent of the clients surveyed in Africa were aware of the interest they are paying on a loan. That’s a staggering number.

Look, credit is a business of trust and Trust comes with know-how and awareness.

Challenges for the fintech industry

The evolving fintech landscape poses challenges related to regulatory dynamics, responsible growth, and adapting to emerging technologies. As the industry continues to evolve it will need to work harder to address the lack of seamless integration between banks, payment providers, and gateways.

Without efficient interoperability, it becomes challenging to create a cohesive ecosystem that facilitates smooth transactions and interactions between different financial institutions and fintech platforms, hampering the user experience and slowing the pace of innovation in the fintech space.


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