Digitalisation breaks barriers for entrepreneurs in DRC

Dutch Fintech company MoneyPhone has, with Orange Corners support, successfully digitalised the application procedure for a guarantee fund in DRC. Now startup entrepreneurs from anywhere in this vast country can apply for the guarantee providing them access to much needed startup capital.

The implementation of the Start-up Act in DRC marked the beginning of a new era for young startup entrepreneurs. One of the pillars of this Act was the establishment of a guarantee fund. Many young startup entrepreneurs in DRC don’t have access to collateral, like land ownership, or financial guarantees, that are required to get a loan to grow their company. This is where the guarantee fund comes in. The guarantee fund called Fonds de Garantie de l’Entrepreneuriat au Congo (FOGEC) supports young entrepreneurs with that guarantee so that they can get that loan to grow their startup. This is a great solution that could have a massive impact on so many young startup entrepreneurs. However, in order to get that guarantee you still need to be able to apply for it.

That proved to be a challenge in DRC. The FOGEC fund made use of a paper-based application process, which was also prone to errors and resulted in a long and often delayed process. At the same time, this process forced entrepreneurs to do their applications in person at a FOGEC office. Naturally, the DRC is a vast country with limited infrastructure, resulting in the fund being solely available to entrepreneurs in the larger cities. This is where the project with MoneyPhone and Orange Corners comes in. The outdated paper-based process is now replaced by an automated, easy-to-use and error-free fully digital process. This digital innovation lowered the processing time from 3 months to 5,5 weeks, enabled FOGEC to lower its minimum guarantee size from $50.000 to $5.000 and the interest rate from 8 per cent to 4 per cent. This shows the deep impact digitalisation can make in reaching the SDGs that we’re all working so tirelessly to accomplish. In order to do this accurately, digital principles were applied throughout this project.

The principles of digital development

As the Netherlands is working to achieve the Sustainable Development Goals through digitalisation via programmes such as Digital 4 Development (D4D), we’re acutely aware of the necessity to responsibly leverage this potential. Therefore, for the Moneyphone and FOGEC project, we adhered to the 10 principles of digital development, using them as a guiding light:

1. Design with the user in mind: MoneyPhone started with a thorough user experience needs assessment with Congolese entrepreneurs, which showed how young people are using digital platforms and what their expectations were for this one.
2. Understand the existing ecosystem: the initiative is a response to a need identified by the local entrepreneurial ecosystem, namely that access to finance is a massive gap in their ecosystem.
3. Design for scale: even though the project was designed as a pilot, the developed solution was applicable on a national scale.
4. Build for sustainability: by digitalising processes, FOGEC can be more transparent in their operations and build trust with investors and partners, which is something we’re promoting in conversations with FMO and other development partners.
5. Be data driven: the digital solution includes a dashboard, providing insights into the user data of the fund to be able to continuously track applications and improve the service provision.
6. Be collaborative: Orange Corners DRC entrepreneurs collaborated in the testing of this digital solution.
7. Use open standards, open data and open source: the results of the pilot were broadly accessible and shared during a public event of the NL embassy in DRC and FOGEC on 5 March 2024 with multiple stakeholders, in which the collaboration was formalised.
8. Reuse and improve: rather than completely designing a new solution, MoneyPhone built upon its existing platforms and adjusted it to fit with local needs.
9. Address private & security: the choice for a reliable organisation such as MoneyPhone ensured privacy and data protection.
10. Be inclusive: by digitalising the application process, the gap between urban and rural areas was bridged, including all Congolese entrepreneurs.

The successful completion of this project shows that in the digital sphere, a minor but straightforward solution can have a rippling effect and impact people throughout an area as large as DRC.