My summer internship: helping the underbanked in Africa afford a smartphone and unlock access to finance

First day, at PayJoy’s SF office

The summer finally came to California, but I’m now 10.5k miles or 21+ flight hrs away from Berkeley. I will spend my summer in the winter of Johannesburg in South Africa working with PayJoy, a company focused on technology and financial inclusion.

I’m personally interested in financial inclusion solutions because it is the baseline for any person to progress in life. Living in a cash-only environment with no access to credit is very expensive and risky. I experienced some of this in my childhood when at some point we had to rely on shark-lenders to cover expenses. I later learned more when I volunteered in a program in my home country of Peru that helps small entrepreneurs from the poorest areas of Lima to grow their businesses. Their main limitation was the lack of access to credit.

Seduced by this problem and the huge impact it has, I decided to shift my career from management consulting, which I had been doing for about five years, to FinTech. So, I joined EFL, a company that develops credit risks scores for people with little or no credit history using alternative data. In my two years there, I supported financial institutions mostly in Latin America to serve loans to the underbanked. It was very fulfilling to experience the social enterprise model where the company generates profits by solving a social problem.

While in EFL, I realized I wanted to expand my skills and experience, until that point focused mostly on operations and project management, to include growth strategy and entrepreneurship. Helping a company expand in emerging markets, and learning how to start a social enterprise, especially with a technology-based solution, were my main motivations to pursue business school. Those interests led me to Haas at Berkeley. During my first year at business school, I have explored the intersection of technology and social impact in FinTech. When recruiting time arrived, and I found PayJoy’s internship role description for Africa, I could not believe how much this opportunity perfectly matched to what I was looking for.

PayJoy has developed a technology that allows access to finance for the underbanked, beginning with financing a smartphone. A smartphone is one of those things that most of us take for granted, but in Africa only 28% of the population has one, meaning that 800 million of people rely on basic or featured phones which have none or limited Internet capabilities. We can’t imagine our lives without the Internet, but there are a lot of people around who live like that! Smartphones are expensive. For most people, it is equivalent to buying a first personal computer. The only way to get one is with credit, which most people can’t get. In Sub Saharan Africa 80% do not use formal or semi-formal financial services. If people are unbanked or don’t qualify for a formal credit, they can’t afford a smartphone.

With PayJoy, the price of the smartphone plus a markup is broken down in small installments without any additional interest rate. If the client does not pay, the phone is locked. So instead of charging late fees or higher interest rates that make it harder for the customer to repay, PayJoy locks the phone. With PayJoy’s innovative solution, the lender can finance smartphones to the underbanked controlling the risk of default, the retailer can sell more phones of higher value to more people who now qualify for this type of credit, and the customer can finally afford a high-end phone and build a good credit history.

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First day in Johannesburg, lunch with the Africa team

So here I am, in Johannesburg, feeling excited and challenged for the projects I will be working on. I’m sure it will be a great experience, moreover now that I have met the team: rockstars who are happy to belong to this family and are passionate about the mission of the company. They have given me a warm welcome and have offered me all their support to succeed and get the most of this experience.

Ten weeks left and counting! Can’t wait to write about my main takeaways from this internship.

First weekend: Safari time! at Pilanesberg National Park

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