Oze Co-Founder & CEO Meghan McCormick shares how her platform is closing Africa’s SME credit gap through data and design.
Subscribe: iTunes / Spotify
Apply to be a guest on our podcast here
Show Notes:
In this Mission Matters episode, Adam Torres interviews Meghan McCormick, Co-Founder & CEO of Oze, on how her fintech platform is empowering Africa’s small businesses with smart tools and access to fair capital. From founding West Africa’s first business accelerator to leading Oze’s expansion across the continent, Meghan’s mission is to turn subsistence entrepreneurship into scalable economic growth.
About Oze
Oze is a platform that equips small business owners in Africa to make data-driven decisions to improve their performance, tap into networks, and access capital.
Oze’s platform is comprised of two components. On one side is an mobile app for a small business owners that aggregates and analyzes transaction data to push context-specific recommendations and reports. On the other side is a portal for financial institutions that combines the app’s crowdsourced data with alternative data sources to assign a credit risk score to each Oze user. Through the portal, banks can source and support a small-business loan portfolio.
Full Unedited Transcript
Hey, I’d like to welcome you to another episode of Mission Matters. My name is Adam Torres, and if you’d like to apply to be a guest in the show, just head on over to mission matters.com and click on Be Our Guest to Apply. All right, so today’s guest is Megan McCormick, and she is the co-founder and CEO over at Oza.
And just to let you know, this particular interview is part of our Milken Global conference coverage, where we bring you some of the best of participants and attendees and panelists and speakers from the Milken Global Conference. So I’m happy to bring, happy to do that for our audience. And first thing, first, Megan, welcome to the show.
Thanks so much, Adam. It’s great to be here. All right, so we got a lot to talk about today. I definitely wanna get into what you’re doing over at O Jose and how you’re empowering Africa small businesses through data driven and digital lending. But before we get into that, let’s talk a little bit about your experience with Milken.
And I understand you were one of the finalists for the Milken Zepe Prize. So let, maybe let’s start there. Yeah. Jose was a finalist in the Milken Zae prize for FinTech in Africa, and it was a fantastic experience. Obviously this work that we do is hard and, and underfunded in many cases, so anytime you have the opportunity to really to.
Get to share the work with people who can invest the amounts that need to be invested to make real change. It’s, incredible. But even more than that, we were surrounded throughout the whole experience. There was we were together in the Middle East before we were together in Beverly Hills to just get to learn from my peers and my colleagues and others.
Working in this space of financial inclusion was really an invaluable network to have built. Amazing. And how did you get into the space? I was interested and curious to hear how people started , on their end and, even in co-founding Jose. How did all that start for you? when I graduated college, I joined the Peace Corps.
So I was a Peace Corps volunteer in the Republic of Guinea, living in a small town in a hut with no running water, no electricity, and really building a community with young people in, my town of kindy and Guinea and. What became so apparent to me is that talent is distributed everywhere, but opportunity isn’t.
And in Guinea, the majority of young people, even with college degrees, are unemployed. And so entrepreneurship is thrust upon them. They don’t have a choice. They don’t create their own work. Then they’re just not going to have any work. And so it pushes all these young people into sub subsistence entrepreneurship.
Mm-hmm. So when I was a Peace Corps volunteer, I started a business accelerator, actually the first social enterprise accelerator in West Africa and the first business accelerator in Guinea. And through that experience learned, okay. Yes, we can get people to ideate, we can support them to build better businesses, but they’re still running into this wall of, they have no access to resources.
They don’t have access to the capital that they need to, the data that they need to, the networks that they need to really push this from something that’s helping them survive to something that’s not just helping them thrive, but helping their community thrive. Hmm. So as we were continuously working on solving that problem, I was lucky to go to graduate school at MIT.
And through the legum Center for Entrepreneurship in Emerging Markets continued to work and refine my idea around some of the leading technologists in the world and what came out of all those experiences ended up being today. Now, what is Oza? I. Wow, what an amazing story. And I’m just so curious as you’ve gotten like further and further into this space, like what keeps you going?
Because you got a lot work and I won’t say working against you, but you’re to make big social impact changes like you’re doing, like it, it’s heavy. It’s heavy work. Yeah, I’m not gonna lie. There, there are some days when, when I think that there is an easier path to take and a more renu path to take take.
I mean, I, Pete, in the short term, am I mean, you’re, you’re, a lot of things you could be doing, you know what I mean? Like for you to, it’s important that you’re, you’re spending your time on this work, so that, that’s why I asked the question, so yeah. Yeah, of course. And when I was getting my, MB at MITI was getting a master’s in public administration at Harvard.
And so sore just, you’re just lazy, Megan. You’re just, I know. I don’t even, I don’t even understand you right now, but, you know, the public policy degree kind of keeps you grounded to what’s important. And I love solving big, systemic, sticky problems. Mm. I think it’s what gets me up in the morning. Yeah. I want like.
You know, I’m someone who thinks visually, like I love a whiteboard. Mm-hmm. And mapping out all of the, the pipes that need to work for someone to start a business and succeed. Mm-hmm. And then looking at where all the constraints are, and then lucid and those constraints, and seeing where the new constraints are and jumping into the next piece.
Like, I guess I’m a big nerd, but that’s what really gets me excited and that’s what gets me going. And then on the rough days, we have. Files and files and files and videos and emails and WhatsApp messages from our customers who, whether they borrowed through O Jose or just used our business management software or just took it advantage of our educational materials.
Mm-hmm. Have told us how O Jose’s changed their life, changed their family’s life. Wow. Built, built themselves up. Like then you’re like, okay, well. I can go work at Facebook, right? Like I can do other things, but why, when this is the impact that Jose is having. Hmm. Yeah. It’s amazing. And let’s go. Speaking of that impact, let’s go further into the work.
So understand that Jose is working on closing the credit gap for small businesses. why is this important and what does that even look like? It’s important because money makes the world go round as much as we, we don’t wanna admit it. Without capital, you can never get a micro business to a small business.
You can never get a small business to a medium business, et cetera. There’s a $331 billion small business credit app in Africa. That’s just the formal sector. So if you think about the informal sector, the side hustlers, the college kids selling out of their dormitories, that credit gap could be about twice as large, and that’s the difference between the actual.
Demand for capital that could be met, that could be consumed by these businesses and the supply for capital. And lots of players have tried to fix it from one side or the other, right? You see a lot of digital lenders popping up mostly in the consumer space not necessarily in the SME space because the SME is.
It’s harder to do algorithmically. But you see digital lenders who say, okay, let, let’s flood the market with capital. Let’s do alternative credit scoring. Let’s try to get money out there. You see a lot of work on the government side skills development, trying to build up sm. But you don’t ever see the systems approach.
You don’t see any platforms loosening the supply side and demand side constraints simultaneously, which is what you really need in order to solve this problem. So what we do at Oza is we have a platform with two products. They can both work independently, but they really sing when they work as a system.
So on the small business side, we have a business management app. Kind of like a very simplified QuickBooks meets Shopify meets Khan Academy, where the, the business owners can basically move off of keeping the records and notebooks and keep them digitally. And then once that data is digital, it enables their operations to be more smoothly.
For example, if you send a digital invoice, you can put payment reminders, you can remind your customers when things are due. On the other side of our platform is a lending management system with an inbuilt machine learning credit scoring algorithm that directly integrates with the core banking infrastructure at financial institutions and scores using alternative data.
I. And if a business owner is using our business management app, not only is that at making them a better business, 97% of our high active users are growing profitable, or both. But it’s generating behavioral and performance financial data that can enhance their credit score. 97%. Hold on. We can’t glance over that.
I wanna join like. Think about those. If you’re not keeping records, that’s a huge number. Like, are you kidding me? Like what do you, I gotta pause there for a second. What do you attribute some of that to? We can’t, I’m maybe honest to a fault. I know it’s across the board. I know it’s across, there’s many, many used to, but that’s gotta be an outlier type number.
I don’t know. Yeah. Yeah. We actually just did a, a big program with the African Development Bank. And there it was, 98% of the businesses that we worked with improved their incomes over the course of the program. Wow. Um, it’s a combination, right, of when you are tracking your business so closely and you’re using the built-in AI and analytics to take that data and turn it into more efficient operations, you.
When what you were doing before was managing in a notebook or not keeping any records, you can definitely get performance improvements. If what you were doing before was having no access to capital or access to capital at 9% per month, and now you’re getting capital at 3% per month, you’re gonna have better performance.
But then of course there also is some selection bias, right? The type of business that seeks us out, that stays with it. Of course, that takes advantage of the educational content. That’s a business you wanna bet on. Yeah. it, makes a lot of sense. And speaking of betting on, let’s talk about partnerships and people, you know, betting on the future of Jose.
, What does that look like? What is the, partnerships side of things look, and how important are those? Is that role Partnerships is the core of everything that we do and. It makes things harder in the, the short run. I think nobody who works with banks would say, oh, banks move so fast.
They’re so easy to work with. But except for the ones that I interview and my clients. Other than that, except for our sponsors. Our sponsors, you’re the best. Go ahead, continue. Yes. Fast frugal processes. But you know, going back to the Peace Corps, one of the things we’re trained to do in the Peace Corps is take an asset based mindset, right?
Mm-hmm. You go into a community and you don’t say, oh, what are they missing? You go into the community and say, what do they have that we can build on? And when we think about. What Africa has is they actually have banks with great brands, with customer base, with capital, with deposits, and if we’re going to solve the credit gap, I don’t think we’re going to do it by building a completely brand new parallel financial system that ignores all of the legacy players.
I think it’s when we combine the ai, the technology, the customer experience that. the fintechs have with all of the assets of the existing financial institutions. I think that’s how we’re going to solve it. So we work with some of the largest banks on the continent. We echo Bank is one of our biggest customers and they’re in 35 different countries.
and through them we’re, able to. Achieve numbers today that we, we couldn’t dream of, but it allows us to scale rapidly across a continent that’s fragmented with, 50 plus different central banks, different currencies, different languages. So we really use the local knowledge and on the ground competences of our, financial institution partners to together close this gap much more quickly than either of us could do it alone.
Hmm. It’s amazing. Megan, this has been great having you on the show today and learning more about the work you’re doing at Jose. I’m sure we’re gonna hear more and more about it as time goes on. So the very exciting stuff. That being said, if somebody’s listening or watching this and if they wanna connect and if they wanna follow up and learn more about Jose, how do they do it?
Anyone is welcome to visit our website. It’s get oza.com. That’s G-E-T-O-Z e.com. And also anyone is welcome to send me an email. It’s Megan, M-E-G-H-A [email protected]. Fantastic. And February listening, just so you know, we’ll definitely put the links in the show notes so that you can just click on the link and head right on over.
And speaking of the audience, if this is your first time with Mission Matters and you haven’t done it yet, hit that subscribe or follow button. This is a daily show each and every day, bringing you new content, new ideas, and hopefully new inspiration to help you along the way in your journey as well.
So again hit that subscribe or follow button. Megan, thanks again for coming on the show. Thanks so much, Adam. It was great chatting with you.
