Entering Phase II to make the Private Sector World Bank

4 min readFeb 10, 2019
A monkey trying to catch the wall, Jodhpur, India

We founded Gojo & Company to create a world in which everyone can overcome one’s destiny and attain a better life. Our mission is to provide financial access for everyone in the world as the Private Sector World Bank and the long-term goal is to provide quality and affordable financial service for 100+ million people in 50+ countries by 2030.

Just recently, we successfully made the first close of our Series C Financing. (Nikkei went to press)

Entering Phase II

Taking this opportunity, let me explain the journey briefly so far and also touch upon what lies ahead of us from this point on.

Before writing this post, I was reading the original business plan made in July 2014. Some of the aspects were too ambitious. Even so, I am quite pleased to see that Gojo is almost in line with the original plan.

According to the original business plan, I set forth 3 phases of our business. In short, they were defined as follows:
- Phase I: Start the business
- Phase II: Innovate the business and expand the business area
- Phase III: Work globally

Phase I was about starting the business, i.e., having a subsidiary MFI or establish the ones from scratch and run the management properly with the local team. Back then, many people (especially those in Japan’s business community) asked questions on the plan, saying “How can you persuade the local management to be a subsidiary of a just-built company?”, “Is it possible to give meaningful support to the MFIs?”, “Can you really raise fund from the institutional investors?” and so on.

We managed to clear all the above-raised questions. At this point we are a much larger and stronger organization with 5 group companies in 4 countries, serving more than 300 thousand people with 1,600+ employees. The KPIs are better than our counterparts, suggesting that we are providing meaningful management support. We have raised over $45 million equity from various investors.

Now let me share the way forward as we enter a new and exciting Phase II. With our growth and expansion what now needs to be done is to:
(1) Innovate and upgrade the microfinance business by using technology and
(2) Establish a global management system for Gojo and its subsidiaries.

Innovate and upgrade the microfinance business

Let me write about technology first. Until very recently, although the technology aspect was mentioned in the original business plan, I have seldom talked about technology, because I felt we were not ready.

Let me elaborate more. I believe that technology can be favorably applied to microfinance only when the microfinance operation is almost perfect. The practical application of any innovation can be fraught with confusions and trial & errors, and only the streamlined operation enables an organization to apply the new technology (I experienced that when I entered two system introduction projects at Morgan Stanley). Besides, technology is what is behind the operation, silently but steadily improving the business and cannot help malfunctioning organizations. So business should be strong first of all.

After 4.5 years since our establishment, we can finally talk about technology. What we are doing initially is cashless and paperless microfinance combined with the human touch. Cashless microfinance not only improves our operations and risk management but also gives peace of mind to our clients who are mostly women. Paperless is the key for operational improvement and the foundation for the further technological applications.

Also, we will innovate our loan assessment model. On top of the traditional credit risk model, we will add a machine-leaning-based algorithm using speech and other data. It is likely that human speech tells heart rate, trait, face shape, and mental status thanks to the recent breakthrough in Deep Learning. By collecting clients’ speech and assessing it, we may be able to improve our loan assessment model. The better assessment algorithm makes the financial service fairer and more efficient.

There are several more innovations to come. We will introduce them one by one at the best timing.

Making the global management system

Another challenge that we are facing in Phase II is to make the global management system. We have managed to have group companies in 4 Asian countries, but we will have to make a robust management system to do the business in more than one continent.

We are still a small start-up having and cannot afford expensive solutions, but we will have to do it. Now we initiated the formal discussion.

We know that the two challenges in Phase II are daunting. Succeeding in one of them is close to making a successful start-up company. However, given our mission to make the Private Sector World Bank, it is imperative for us to face and overcome the challenges.

Even though we may make mistakes and losses in the beginning, the outcomes of combining microfinance with technology, done well, can empower us to reach our aim to serve more than 100 million people in all continents by the end of 2030. If we clear Phase II, then we will be quite close to the mission completion.

Given the target, we just came to 0.3% point. There is no reason to be complacent by looking back on what we have done. The remaining 99.7% is ahead of us. As ultramarathon runners do, we will keep calm and carry on.