eQub, an Ethiopian startup, emerged as the victor in the fintech pitch-off at the 4YFN event during Mobile World Congress 2024. TechCrunch had the opportunity to sit down with Nahom Michael, the business development lead of the company, on the ground in Barcelona.
The name of the startup, eQub, originates from an Amharic word representing a local form of peer-to-peer credit, as explained by Michael. An Equb refers to a savings group where members pool money to be distributed in turns.
This concept, known as a rotating savings and credit association (ROSCAS), is prevalent in many countries, particularly in Africa, for both personal and business loans, yet has not fully transitioned into the digital realm.
eQub aims to capitalize on this opportunity by targeting users in Ethiopia who have bank accounts and mobile phones but face challenges in accessing credit. The digitalization of Equbs eliminates the need for physical transactions, benefiting both members and administrators.
Besides the convenience factor, eQub’s points system allows users to establish credit history through consistent saving habits. The startup envisions expanding into various financial services while maintaining the ROSCAS model of no collateral or interest, with revenue generated from transaction fees.
Since its launch, the eQub app has attracted 25,000 users and facilitated 200 saving groups, offering users the choice to join existing or curated groups within the app.
Image Credits: eQub
eQub employs stringent security measures to protect savings, requiring detailed KYC for self-managed and curated groups to ensure financial safety.
The startup has established partnerships with over 10 banks and 20 corporate entities, fostering a B2B2C strategy to enhance digital financial solutions for participants.
eQub’s future plans include targeting gig workers in sub-Saharan cities, aiming to reach 1 million users by 2025. To fuel growth and expansion into new markets, the company is seeking a $500,000 pre-seed round.
With visibility gained at MWC 2024, eQub is poised for accelerated growth and potential international expansion in the coming years.
