Local fintech raises $1.62m US investment

A local fintech company, which provides loans to small businesses on assessing their online sales and credit ratings, has raised $1.62 million in investment from a US-based company.

Already working with local and international partners, ShopUp has disbursed good amount in loans though Brac till date to micro-entrepreneurs supplying products to e-commerce platforms.

Its customers are some 28,000 micro, small and medium enterprises (MSMEs), the majority of which are led by female entrepreneurs like that of Facebook page Rapunzel's Secret which sells hair oil.

There are nearly 300 Bangladeshi e-commerce websites apart from some 350,000 shops on Facebook.

ShopUp plans to use the new investment in supporting 100,000 merchants.

Sefat Sarwar, co-founder of ShopUp, acknowledged the investment but did not give any further comment. However, Omidyar Network, comprising angel investors from Facebook, Google, Amazon, Grab and global banks, declared the investment through their website on Monday.

An announcement on the website quotes Afeef Zaman, chief executive officer of ShopUp, as saying that many entrepreneurs in Bangladesh still lack access to formal credit services, making it hard to grow and scale their small businesses.

There is a large number of micro and nano-enterprises with annual turnovers of less than $20,000 who generally do not have access to affordable credit due to high operating costs of micro-loans, she said.

“Our unique model allows us to reach, engage and assess these MSMEs at a fraction of the cost using deep analytics and algorithm-driven models,” she added.