Kazakhstan fintech Solva raises $20 million in bid to become a bank

Source: Solva

Solva, the leading Central Asian fintech business headquartered in Almaty, Kazakhstan, announced the equity investment of $20M with Neo Crystal Holdings Limited (“Neo”), a company backed by the Sawiris family and ZCP.

The Capital injection will allow Solva to further scale its digital financial products for millions of micro, small and medium enterprises (“MSMEs”) and boost job creation in the region.

Solva plans to utilize a portion of the funding to support its ongoing transformation from a microfinance organisation into a fully licensed SME-focused bank, which is expected in 2024. The transformation will significantly increase Solva’s capacity and financing outreach, bring new funding sources from current accounts and deposits and add transactional products to the offering. The equity investment will also speed up Company’s regional expansion plans focused on bringing Solva’s credit scoring platform and inclusive finance principles across Central Asia.

Solva, recognized as “Fintech of the Year” in Kazakhstan in 2023, is the country’s market leader in unsecured non-bank lending, offering digital financial products for micro, small and medium-sized businesses as well as retail borrowers.

Founded by ex-investment bankers Boris Batine and Alexander Dunaev in 2017, Solva Group companies have processed a total of 5.5 million credit applications in Kazakhstan alone. The Central Asian fintech uses machine learning and advanced data science tools to provide working capital financing to the underbanked MSMEs and build up their credit profiles.

Being a strong advocate for an ESG-centered approach and socially responsible lending, Solva has tripled its portfolio of loans to MSMEs in 2022-2023, which has helped create more than 41,000 jobs in the country. In 2023, the company became the first corporate issuer of ESG gender bonds on the local exchange, utilizing the proceeds from the bond issue for lending to women-led enterprises with the goal of promoting gender equality in business. Nearly 70% of Solva’s MSME clients are women-entrepreneurs, and around 78% of the total number of borrowers of the Company live in rural areas, which are traditionally limited in terms of access to financing.

Currently, the Solva Group employs over 800+ employees with offices in Almaty, Astana and Tashkent.

Onsi Sawiris, investor in Neo, expressed views that Central Asian financial sector has significant potential for future growth and investments. He says, “Central Asia has experienced rapid economic upturn over the past two decades. Along with the population growth of more than 30% since 2000, the GDP has increased remarkably. Kazakhstan, the largest economy in the region, has achieved GDP per capita growth of almost 10-fold since 2000. Fuelled by rapid digitalization alongside with population and economic growth, the financial sector offers attractive opportunities for investment and acts as a conduit for promoting inclusive finance and social wellbeing. We are very glad to partner with Solva, being the pioneering fintech group in Kazakhstan, to support its growth and transformation plans and to bring its leading sustainable finance franchise to a broader client base”.

Solva co-founder, Boris Batine commented, “We are delighted to announce this new strategic partnership and excited about the future prospects. We believe that Solva will greatly benefit from having a well-known and respected international investor, and additional funding will accelerate the execution of our regional strategy and expansion plans. Having stepped into the active phase of transforming our company from an NBFI into a fully licensed bank, it is essential to have knowledgeable and reliable international partner along our journey, who also shares our development vision and sustainability principles.”

Neo Director Ehab Tantawy: “We are thrilled to announce our strategic investment in Kazakhstan's dynamic fintech sector, made possible with invaluable support from our transaction advisors (Maatouk Bassiouny, Baker Tilly and Aequitas). This move exemplifies our commitment to innovation and growth in financial technology and we are thrilled about this partnership and eager to contribute to the development of Solva in Kazakhstan and beyond.

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