This episode of the BIG5D Podcast is presented by Realm Digital
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Welcome to Episode 47 of the BIG5D Podcast. In this episode, I chat about using AI to solve the “SME funding gap” with Nic Rawhani, the Co-founder & CEO of Vula, a company that offers “AI SME funding tech”. I struggle to imagine a company description more in the wheelhouse of what BigFive Digital covers.
Rawhani, a South African engineer and McKinsey veteran, founded London-based Vula in 2022 with Alex Goff, who acts as the company’s CTO. The company is at present focused exclusively on the African continent. Though it isn’t difficult to imagine Vula as an emerging markets play.
One of the key things Vula does is uses AI to simplify and streamline the process of applying for funding. This helps SMEs by turning an incredibly frustrating and cumbersome process (that likely ends in rejection anyway) into a fast and simple one. For banks and other lenders (Vula’s real customers), employing this process saves time and labor and leads to a far more accurate assessment of an SME’s credit worthiness.
In this brief clip from our interview, Nic explains the “demographic dividend” that is fueling Africa’s massive, youthful population, which will need a steady infusion of skills training and employment opportunities. As Nic notes, this need will not diminish, it will compound.
Rawhani was a speaker at BigFive Digital’s 2024 Summit in Cape Town, where he explained what the SME funding gap is and how Vula addresses it. You can watch his approx 30 minute talk at the Summit here.
We hope you enjoy this highly informative conversation.
You can also catch this episode on your favorite podcast apps.
And if you prefer to watch the interview on our YouTube channel, here it is.
Interview Excerpts
The following are just a few edited excerpts from our in-depth interview with Vula Co-founder & CEO Nic Rawhani.
You estimate the African SME funding gap (the difference between demand and funding availability) at close to $400 billion. What is behind that number?
In 2018, The World Bank did what is probably one of the most impressive studies we've seen in the space. What they did was that they looked at all developing countries in the world…and they took data from where they could, etc., and compiled it, basically, from a grassroots level and built up this picture of the number of SMEs and MSMEs that operate in these countries. How many of them have access, partial access, or no access to their financing ecosystem?
At that time, in 2018, the total amount of the funding gap, the legitimate demand from SMEs on the continent, was $330 billion. We've seen reports since then, because that's more than five years ago now, that have taken the number all the way up to $410, $450 billion.
What specific challenges in the SME funding process are you using AI to solve?
With some of the major banks on the continent, if an SME even wants to apply for funding, they're still expected to print out a PDF from their website and fill it in by hand and then scan it and send it back to them. And then they take two to four weeks to get back to you. And then it's probably a no. So why would an SME continue to engage with this when they’re just trying to run their business?
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BIG5D Podcast Ep. 47: "Closing the SME Funding Gap" with Vula's Nic Rawhani