Analyst Report: Upgrade for access Asaak Serves an Underserved Market Brimming With Potential

Worth Lending Attention

Note: This report was co-authored by KingsCrowd Investment Research Manager Francis Vu.

Asaak — the company I’m introducing to you today — immediately intrigued me. As a Uganda-based fintech company, it’s very different from many other startups we see raising online. Asaak provides asset financing and other financial services for budding entrepreneurs in Africa. More specifically, it currently provides boda boda (bicycle or motorcycle taxi) loans, fuel loans, and smartphone loans to unbanked entrepreneurs, with more types of loans planned for the future. Its loans are small, averaging $1,500. Asaak charges around 30% interest, which is normal for Africa. 

So why does Asaak grab my attention? 

For one thing, I like fintech. The financial industry has resisted change for a long time. It’s easy pickings for companies with innovative technologies and more customer-centric business models. 

Companies focused on developing countries also appeal to me. They have the opportunity to engage in basic infrastructure building — financial and otherwise — that happened decades ago in the West. There’s simply more to do in these countries. The opportunities are bigger, and the potential upside that comes with success is also much greater. Helping smaller companies and small business owners is classic startup territory in the U.S. and Europe. But it’s become increasingly picked over and competitive. 

It’s a different story in developing countries, though. The markets there are wide open. The problems they face are more urgent because they’ve been neglected for so long. And entrepreneurship is finally gaining a much wider foothold in Africa, fueling rapid growth of the middle class. The market for both business and personal financial services is on the upswing. And it’s just the early phase of what should be a multi-decade trend.

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