As Head of Portfolio Management for JUMO, Albert Brand plays a leading role in managing JUMO’s AI-powered credit systems, which are transforming access to finance for underserved communities in Africa. Here, he discusses the impact of auto payments on customer retention and how this builds a sustainable ecosystem.

In my previous life as a financial and investment advisor, I spent a lot of time ensuring people’s money grew and that they achieved good financial outcomes. Over time, I realised I had a deeper passion: bridging the gap between those at the bottom of the pyramid, or living near the poverty line, and the high-net-worth individuals of the world. My current role at JUMO allows me to align more closely with this purpose, and the way we’re able to do it keeps me energised.

The power of partnerships and innovation

JUMO partners with mobile network operators (MNOs) and banks to build financial services for people who may be excluded from traditional banking systems, such as those without credit histories, collateral or formal documentation like payslips. Through JUMO, customers can access managed microfinance on their mobile phones. AI-powered prediction models help us assess credit risk. Loans are payable over an agreed period, with a lending fee based on individual risk profiles.

One of the key insights we’ve uncovered in our work centres around customer loyalty to mobile network operators and auto-deductions for loan repayments. There has been speculation and debate about auto deductions from mobile wallets and its impact on the customer experience. The thinking is that if a customer knows money will be deducted from their wallet, there is a risk that they simply switch service providers. JUMO’s comprehensive research into this, however, indicates that customers appreciate the convenience and simplicity of automatic collections. Auto collecting actually increases customer retention and good repayment behaviour, leading to customers staying loyal for longer.

Customer satisfaction and retention

Our data shows that smart auto-collection strategies lead to significantly better customer retention and disbursement volumes compared to manual repayment methods. We ran a test with two cohorts side by side – one with manual repayments and one with auto-collections. The results were startling. The group with auto-collections saw 3.5 times better customer retention and double the disbursement volumes compared to the manual repayment group over a 12-month period. Customers actually prefer the convenience of auto-deductions, as long as the expectations are set clearly.

This data-driven insight helps us to work with our MNO partners to drive one of their biggest focus areas nowadays, namely customer retention. The numbers speak for themselves – auto-collections improve both customer experience and the underlying ecosystem economics over long periods of time.

Customer convenience and trust

Understanding human behaviour is key here. Most customers prefer the path of least resistance. In our research, when asked if they would rather repay loans manually or have the payment automatically deducted, the overwhelming response is a preference for auto-deductions. Why? It’s simpler. Just as in more mature financial services ecosystems, where debit orders are the norm for payments, customers in underserved communities appreciate the ease of knowing their loan is being repaid without having to take additional steps.

At JUMO, we make sure our customers are fully informed upfront. Then, we notify them before the due date, so they know exactly when and how much will be deducted. This transparency builds trust and helps customers manage their finances more effectively. Importantly, it also improves their eligibility for future loans – not just with us, but potentially with larger institutions as they build their credit history.

Leveraging AI to make smart decisions

As Head of Portfolio Management, my team’s role is to make two key decisions: which customers get access to loans, and what product choices do eligible customers gain access to? With over 10 million applications per month, we rely on AI and machine learning to power these credit decisions in an instant. While this is not an easy problem that we choose to solve at this scale, we’ve seen our models more accurately predict risk and repayment behaviour over time.

One of the incredible things about JUMO is how we use AI to process millions of credit applications each month. Of the 10 million applications we process monthly, around four million loans are disbursed in under three seconds per loan. This speed and efficiency is critical for our customers. Many of them need immediate access to funds to sustain their livelihoods. 

Our smart decisions stretch further than just the credit application process, it also applies to managing various sources of capital supply. Another key piece of solving the puzzle that we get to solve, is matching the right capital supply with the right demand profile, mostly from multiple sources in one territory. The ability to attract, retain and manage a diverse spectrum of capital providers to meet the demand profile, ensures that we are building a sustainable financial ecosystem for our MNO and banking partners.

Sustainable impact

Ultimately, the work we do at JUMO is about empowering underserved communities and entrepreneurs. I recently saw this first-hand on a trip to Tanzania, where I was struck by the incredible economic activity happening in local markets. For these entrepreneurs, injecting even modest amounts of liquidity, like $40 or $50, into their business activities can make a huge difference. They can buy stock, sell their goods and keep the economic beehive buzzing. 

Despite the scale of our operations and the fact that we deal in unsecured lending, the default rate remains below 4%. This shows the power of the tech we’ve built and our business model. Our goal at JUMO is to continue pushing the boundaries of what’s possible in financial services across the African continent. By harnessing AI, data and innovative payment solutions, we’re not only making finance accessible to millions of people, we’re also helping MNOs grow and retain their customers.

Connect with Albert