Microfinance system provider Oradian raises seed round

The company offering cloud-based software to MFIs better manage their data, saving time and money

Microfinance institutions (MFIs) are not exactly new, but they serve a really important purpose: giving basic financial services, including loans and savings, to poor people, and those who many not otherwise be able to gain access to banks, who don't want to give credit to those who have no assets.

This is especially crucial in underserved, and developing markets, that don't have the infrastructure and resources that other countries might have. Because of this, MFIs have become increasingly popular across the globe, with more than 10,000 around the world. 

According to Croatian company Oradian, a developer of core technology platforms for MFIs, there is a big problem, though: there is so much data that these institutions are struggling to keep up with it all, and are losing time and money as a result.

Oradian has come up with the solution to these issues, and now it has some money to put it into practice on a wider scale.

The company announced on Wednesday that it has raised an undisclosed amount of seed funding from new investors, both angels and VC firms, including Credo Ventures, Playfair Capital, Day One  Capital, Esther Dyson, Moaffak Ahmed and Pule Taukobong (Africa Angels Network).

Oradian is cloud-based platform that allows financial institutions to improve their performance, access their data in real-time, reduce their costs and scale their services.

"Banks lend money but they don’t do software. We we let banks do banking, and we do their software for them," Antonio Separovic,  Co-founder and CEO of Oradian, explained.

Oradian’s core-banking product is called Instafin and it enables MFIs, co-operatives and credit unions to serve even their most rural clients both affordably and effectively.

"Our vision is that financial institutions don't need the headache of managing their back office. Management of banks take decisions based on the information they have available. Because of poor software and understanding of software management have poor data or it cost them a huge amount of time and money, fundamentally limiting their ability to manage their bank. We solve this problem," said Separovic.

 The company's main customers are MFIs, which he says are "struggling with their data: reporting, knowing their clients they manage, chasing due funds,"  which "makes it difficult to report to central banks, investors, difficultly to manage the accounting and keeping the books in shape, and all out difficult to know what's going on."

An MFIs might manage over 100,000 end clients through pen and paper, while others use banking software which have not been designed to work in such conditions. These customers can now instead use Oradian to make their process more efficient through its features, which includes administration, security, accounting, loan portfolio management, and deposit tracking. 

Competitors include Temenos, Fern Software and Craft Silicon, but all of these are relatively expensive, and they require some level of experience in-house. Plus, they just aren't stable, said Separovic.

"We are one of the few companies that have microfinance staff working in designing the software, we have practical practitioner experience and we understand our customers," he said. "We are extremely passionate about what we do and have already demonstrated success in remote parts of rural Nigeria. We can service any size MFI from 1 to infinite number of end clients."

The company charges its customers based on the number of end clients severed, and charges out Instafin on a per client, per year pricing model.

Oradian was founded in 2012 by Separovic. and his co-founders, CTO Andrew Mainhart, COO Julian Oehrlein and Program Director Onyeka Adibeli, all of whom had previously worked in the microfinance sector, as practitioners and vendors, across  Sub-Saharan Africa, South-East Asia, Europe and Latin America and had all seen the problems facing microfinance institutions.

"My background experience is in marketing, brand management, and sales, including nearly a decade working for software vendors in the financial inclusion space. This experience drove my desire to empower financial institutions, enabling them to leverage their data and not be hindered by technology," said Separovic.

"My vision is to deliver financial services, through technology solutions that work for the billions who are underserved." 

“What I like about Oradian is that it is not fancy, exotic technology, but rather a practical, real-world solution that automates workflow and handles the ‘middle mile’ of microfinance – which is not transactions but rather financial management," investor Esther Dyson said in a statement.

"It lets small banking institutions get an accurate picture of their overall operations even as it increases their ability to handle customers promptly and personally.” 

Oradian will use this funding to continue to scale its product across West Africa, as well as to expand Oradian’s team, both in Zagreb and in Nigeria.

(Image source: oradian.com)