Evaluating only Numida Uganda Retrenchment’s profile at its peak — without knowing the outcome — the model ranked Competition as the #1 likely cause. Documented cause: Unit economics.
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FOUNDING
FUNDING
CRISIS
SHUTDOWN
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Documented cause
Numida built uncollateralized credit for Ugandan micro-businesses — market stalls, small traders, and informal SMEs — using transaction data from mobile money to assess creditworthiness. The concept was validated with early cohorts showing reasonable repayment rates. But scaling required larger loan books, and larger loan books in Uganda's informal economy were exposed to correlated risks: when the economy contracted after Uganda's COVID response and subsequent commodity price shocks, many micro-businesses failed simultaneously. Collection rates dropped from 85% to under 70% and the unit economics of uncollateralized micro-lending at scale broke down.
Lesson
“Informal economy credit requires portfolio insurance or guarantee schemes to survive systematic downturns that hit all borrowers simultaneously.”