Fibre sold a week at a time. Airtime machines in spaza shops. A 99c loaf of bread at Boxer that turned out to be a banking strategy. We have covered quite a few businesses that spotted an opportunity in South Africa’s townships by building around how people actually live. The latest is DigiDeeds, a Stellenbosch start-up trying to help people get credit by making their homes visible to banks.
The gap it is aiming at is wide, by the company’s reading of the numbers. Citing the Centre for Affordable Housing Finance in Africa’s 2024 yearbook, DigiDeeds says only 6.9 million of the country’s 17.8 million homes have a title deed. Without one, proof of address can mean a trip to the ward councillor: in the company’s community research, one person described spending R38 on taxis and taking time off work, not knowing whether the councillor would even be in.
Let the neighbours vouch
Its founder, Jaco Carstens, is a chartered accountant who spent 20 years as a credit executive at Capitec, and his solution sounds strange at first: let the neighbours verify where you live. Signing up is free. You take a selfie and photograph your ID, then drop a pin on your home and photograph it, and the app checks that location against GPS and digital mapping. Seven neighbours then confirm your address and whether you own the place, rent it or simply live there.
What comes out is a DigiDeed, a digital record that works as proof of address and, for owners, records that they own the home and have the right to live in it, though not the land beneath it. It works only in established townships, including the informal homes in them.
Paid for by the banks
Members never pay, which makes the data the product. DigiDeeds sells it to credit bureaus and banks, pitching it as alternative data to help lenders score customers they have struggled to verify, and as proof of address for the identity checks banks must run under the Financial Intelligence Centre Act.
That model needs scale. DigiDeeds has more than 5,000 members since launching in March, in places like Khayelitsha, Soweto and Soshanguve. Carstens is aiming for 125,000 within 12 months, and the company needs about 500,000 to comfortably break even. Holding IDs, selfies and home locations for that many low-income households also makes the database an obvious target, as TechCentral points out.
It is a clever idea, and so far it is about 1% of the way to paying for itself. The next few hundred thousand sign-ups will show whether neighbours can do for credit what title deeds never did.
