Building What Africa’s Credit System Needs: Dalumuzi Mhalanga on Conviction, Pivots and Playing the Long Game

Dalumuzi Mhalanga started Notto with an idea: using rental payment data to build credit scores for home loans. As he and the team confronted the challenges of data collection, market structure and commercial viability, it made a key shift towards building credit intelligence infrastructure for financial institutions.

In this Founder’s Spotlight conversation, Mhalanga reflects on what it means to hold on to a conviction while changing the business built around it, why regulators and relationships are important when building financial infrastructure, and when a company should stop building quietly and start telling its story.

01. Notto began as a credit score for home loans. What did you understand about the problem at the start, and what took time to see?

The starting point for us was an observation about how credit works. Credit is essentially borrowing from the future: you're lending to somebody today against money they'll earn tomorrow. We believe credit is the lifeblood of an economy because it allows people to do things today that they would otherwise have to spend years saving up to do. When you think about how credit products are built, what you're really looking at is someone's cash flow. Is it predictable? Can you structure repayments around it? Yet across Africa, people are earning, trading, making payments and meeting obligations that conventional credit systems don't necessarily capture, and they don't always have the credit history lenders would ordinarily use to assess them.

So we started thinking about rent. It's usually one of the biggest expenses a household has, and people prioritise it because they need a roof over their heads. Some pay monthly; others put money aside every month for an annual payment. Why couldn't we capture that financial behaviour, build a credit score around it and use it to support a mortgage product?

On paper, it was beautiful. You put the spreadsheet together and it makes perfect sense. Then you hit the ground running.

We discovered how difficult it was to capture reliable rental data. During our licensing process, it became clear that we needed reliable information from landlords rather than relying on tenants to report their own payment behaviour. But what's the incentive for a landlord to provide data about their most reliable tenants? And how do you get thousands, eventually millions, of landlords to provide accurate, up-to-date information consistently?

Then there was the larger real estate market itself: developers, lenders, housing supply, property prices and a product that required somebody to take a ten-, fifteen- or twenty-year view. In some markets, the macroeconomic environment doesn't even allow lenders to take that kind of view comfortably.

Suddenly, you realise this isn't just a credit-scoring problem. You're almost trying to build an entirely new market.

We'd tied ourselves too closely to one product. The underlying thesis was still there: people were meeting obligations and generating economic information that could help institutions understand credit risk better. What if we built the underlying infrastructure instead, so different institutions could use that intelligence for whatever credit products the data could reliably support?

That was really the shift. It took us back to the bigger ambition: building the capabilities that need to exist underneath the financial products themselves.

02. After several years testing the original model, what told you it was time to pivot? What would you say to a founder facing a similar decision?

There's a saying about founders needing to have strong conviction that's loosely held. I believe you need conviction; otherwise, every opinion or difficulty is going to move you in another direction. But your assumptions are hypotheses. You have to test them and gather enough data to know whether what you believe is supported by what's happening in the market.

It reminds me of something Marc Andreessen said: “Proceed boldly as if you are completely right, but actively look for data that proves you are wrong.”

We spent roughly two or three years on the initial model, from around 2020 to 2023. It wasn't something we tried for three months and then abandoned. By that point, two things were clear. First, the opportunity was big, but bringing all the different parts together was much more complicated than we'd imagined. Second, the business model wasn't going to generate the returns we needed, certainly not quickly enough for the type of company we were building.

Companies exist to create value and generate profit. For a venture-backed company, there's also an expectation that you can create the kind of value that returns investors' capital, ideally at a significant multiple. We couldn't see a clear enough pathway to doing that with the original model.

So we decided to go with infrastructure. It was more foundational, and it allowed us to build a capability that multiple institutions could use across different products and markets, with the operating leverage that comes from that kind of model. In many ways, it brought us closer to the problem we'd set out to solve.

My advice is to distinguish between your conviction in the problem and your attachment to a particular way of solving it. The market doesn't always tell you your idea is completely wrong. Sometimes you've identified an important problem, but built the wrong commercial machine around it.

Being stubborn is important. You need a degree of stubbornness to build anything difficult. But you also have to know what you're being stubborn about. For us, the conviction didn't change. What changed was how we were trying to solve the problem.

03. Selling to banks can mean working across product, risk, credit, technology and compliance teams. How do you keep a small team motivated through long sales cycles, and what helps you win institutional partners?

The motivation goes back to conviction and being able to paint a picture of what's possible. Large enterprises are complicated. You could spend a year, a year and a half, or more trying to close a relationship with an institution. For a small company with salaries to pay and targets to meet, that's a long time.

But once you're embedded in a large enterprise, delivering something close to the core of what that institution does, the relationship can become incredibly valuable and durable. You might spend eighteen months closing what eventually becomes a five- or seven-year relationship.

You have to help the team see that bigger opportunity. But vision alone isn't enough. You also need quick wins and proof points. You make progress with one client, eventually close a large enterprise and deliver. Then you close another. Often the sales cycle starts getting shorter because you've learned how to sell, built credibility and have something real to point to. Not always, of course, but those proof points show people that the vision is materialising.

When it comes to winning institutional partners, the first thing is a great product. But you also have to understand the customer's problem deeply. What's the actual value of solving it for the institution?

When you're selling to a bank, you're not selling to one person. You're dealing with product, credit, risk, compliance, legal and technology teams, each with different responsibilities. You have to find what I'd call the highest common factor across all of them: the shared value you're creating for the organisation.

The commercial team might see an enormous lending opportunity. Risk wants to know whether the product improves assessment. Technology is thinking about integration, and finance wants to know whether the economics work. Everybody might agree it's a good idea, but that doesn't mean everybody is ready to make a decision.

So understand what each person needs to move forward. Sometimes you don't need to ask the institution for the biggest commitment immediately. You need to identify the next decision they can actually make and build from there.

And the other thing is relationships. Ultimately, you're dealing with human beings. Somebody is worried about their KPIs, their targets and what this decision means for their career. You're not just selling something to a bank; you're helping somebody solve a problem that matters to them. Somebody is going to sign that agreement with their own hands. You have to understand the organisation, but you also have to understand the people.

04. Notto is a licensed credit bureau, and you've spoken about regulators as partners. When should founders in regulated sectors engage regulators, and how did licensing shape what you built?

As innovators, we sometimes tend to look at regulators as adversaries. You build a product, get excited about it and then remember there's a regulator you have to deal with. It becomes almost a checklist exercise. I've always preferred to take a different view.

Particularly in financial services, regulators exist for good reasons: to maintain market stability, manage systemic risk and protect consumers. That doesn't mean regulators always get everything right. They can become too restrictive and constrain innovation. But you need to understand the purpose of regulation before treating it as something in your way.

This matters because of what we're trying to build. If our ambition is to create something that could become a standard for assessing creditworthiness across the continent, we also have to ask: what happens if we get it wrong?

If our scores systematically tell lenders that people are good credit risks when they're not, imagine the losses that could create if enough institutions depend on them. The opposite is just as important. If we consistently tell lenders that people aren't creditworthy when they represent acceptable risks, we could constrain access to credit for people and businesses that could put that capital to productive use.

The more widely that intelligence is used, the greater those consequences could become. That's why I think you need an umpire in the game. You need independent oversight and standards, because the consequences go beyond your own company.

Regulation has been important to us from day one. Even with our original rental-data model, the licensing process made us confront questions about data integrity and how to collect reliable information at scale. It influenced what we could responsibly build.

My advice is to engage regulators early, not just because you need a licence. Understand the risks they're responsible for managing. If your product becomes as successful as you hope, what could go wrong? Who could be affected? What would need to exist for people to depend on what you're building?

For us, this is generational work. We're trying to help build something that could become part of the economic fabric of the continent. If that's the ambition, you have to build in a way that allows it to endure.

05. This year, Notto unveiled a new brand and began using “Alternative Data Intelligence” to describe its work. What prompted that change, and what has it meant for how you position the business?

Somebody asked me the other day what my ambition is for Notto, and I said I want us to stand side by side with institutions like MTN and Standard Bank. I mean that quite literally. If we're building infrastructure that institutions of that size could eventually depend on, they need to look at us and see a company worthy of standing alongside them.

You can have great products and very capable people, but brand plays an important role in how people understand who you are and what you're capable of becoming. Our previous brand was a good brand. It just wasn't necessarily the brand for the company we'd become or were trying to build.

We've made enormous progress in telecommunications and payments over the last twenty or thirty years. We've become much better at moving money. But moving money and financing economic activity are two different capabilities. A big part of our work is helping institutions better understand the economic lives of the people and businesses they want to lend to.

We weren't building a specialised scoring product anymore. We were trying to build infrastructure that could become part of how credit is assessed across the continent. We had to ask whether the way we were showing up in the world reflected that ambition.

For me, the interesting thing about the rebrand wasn't just its external expression. Brand and identity are two sides of the same coin. The process helped us get to a clearer understanding of who we actually were. It wasn't just a new logo, colours or the way we speak. It changed how we understood ourselves.

Category language was another important part of it. In a developing industry, different players can be looking at essentially the same opportunity but describing it in different ways: alternative data, AI-powered credit scoring, underwriting analytics or credit infrastructure. They may be describing different parts of something the market hasn't yet developed a common understanding of.

That's what “Alternative Data Intelligence” was for us. People across Africa generate information through telecommunications, mobile money, payments and other digital ecosystems, but much of that activity doesn't appear in conventional credit records. We're interested in analysing relevant parts of that information to develop intelligence that helps lenders better understand credit risk.

It's not just about alternative data or one scoring model. It's the intelligence and underlying capability that institutions can use across different credit products. We needed a way to describe that.

I don't think every founder needs to create a new category. But if you're operating in a formative industry, it's worth asking whether the existing language is sufficient. Naming something doesn't mean you've established a category. The market has to recognise its value, institutions have to use the capability and other participants have to find the language useful.

Internally, the rebrand has given us a clearer sense of what we're building. Externally, it has unlocked a positive shift in the interest from stakeholders and in the conversations we’re having.

06. After six years of building, Notto chose to share its traction publicly. How did you decide what to share and when?

Building, for us, has never been a vanity exercise. We've always thought about this as generational work, and you can't build something that could become part of the continent's financial infrastructure on announcements.

Companies exist to create value and generate profit. Venture-backed companies also have a responsibility to generate returns for investors. The funding you raise, people you hire, licences you obtain and technology you build are inputs into the outcomes you're trying to achieve. For a long time, we didn't feel it made sense to celebrate the inputs.

We didn't announce every funding round or senior hire, or make an announcement every time we got a licence. Those things can be important, but we wanted to reach a point where we could show what they had produced.

We waited until the business was profitable and had generated more revenue than the capital we'd raised from investors. We wanted to demonstrate sustained growth, and we reached twelve months of double-digit compounded month-on-month growth. We also wanted to validate our credit intelligence in real lending environments, where we saw non-performing loan rates below 3%.

That last point was particularly important. You can't simply point to more loans being disbursed and conclude you're doing a great job. Are these good credit decisions? Are lenders managing the risk? Are we helping institutions distinguish between people who can reasonably service their obligations and those who can't? Expanding credit irresponsibly isn't the contribution we're trying to make.

By the time we had those proof points, there was real substance behind the story. But we also recognised that we couldn't keep it to ourselves forever. Banks, telcos, fintechs, investors and other institutions needed to know that this infrastructure existed and understand what it could do.

If we'd gone out too early, we wouldn't have had enough substance to support the story. If we'd waited too long, we'd have limited our ability to build on what we'd created. We'd spent six years building quietly, and those two considerations had finally aligned.

We've seen a different level of interest and engagement as we've become more visible, although I wouldn't attribute every conversation to a particular announcement. For me, the lesson is that there's a time to concentrate on building and a time to make sure the market understands what you've built. When you tell the story, it should be backed by something real.

07. Looking back, which decision shaped Notto the most, and what would you tell a founder facing a similar crossroads?

There's a book, The Hard Thing About Hard Things, and one of the ideas that's stayed with me is that there's always another move. That next move might not save you. Maybe it buys you one more day. Maybe tomorrow you're still facing the same problem. But you take the next best move.

I think you can only keep doing that if you're building from a place of deep conviction. For us, that conviction has always been about what we're trying to contribute to Africa's financial system. We believe credit is the lifeblood of an economy and that better visibility into economic activity is an important part of building the financial systems African economies will need.

But you have to listen when the market tells you that the way you're expressing that conviction isn't working. The original mortgage-scoring model was one expression of our conviction and we had spent years on it. However, it wasn't the right one for the market conditions or the kind of company we needed to build. So we changed it. The underlying conviction remained.

I also don't think money should be the only motivation for starting a company. You should be solving a problem you believe is worth solving, but there must also be a market: enough people who experience that problem and are willing and able to pay for the solution. If you create real value, money becomes one way of measuring it.

There's a distinction between conviction and motivation, too. You can have deep conviction and still wake up exhausted or frustrated. Your energy fluctuates. Your motivation fluctuates. That doesn't necessarily mean your conviction has changed.

And conviction doesn't mean certainty. You don't know whether your company will survive or whether the next thing you try will work. You have to test your assumptions, look at the evidence and be willing to change your approach. Persistence doesn't automatically lead to success.

I'd tell a founder facing that moment to be clear about what they believe in and why the problem matters. Then look at the reality in front of you, not the reality you wish you had. Ask yourself, what's the next best move?

Take it. Maybe you live another day. And if you do, take the next best move again.

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About Dalumuzi H. Mhalanga

Dalumuzi H. Mhlanga is the Founder and CEO of Notto, an alternative credit bureau transforming how creditworthiness is assessed in Africa. Before founding Notto in 2020, he held several strategic leadership roles at Econet Global, including Group Chief of Staff, with earlier experience at Vitol Group and Harvard Kennedy School. He holds a bachelor’s degree from Harvard University, as well as an MBA and a master’s degree in African Studies from the University of Oxford.