Credit unions have served as the financial backbone for millions of households in Africa for decades, with some 39,000 organizations across the continent offering small installment loans and lines of credit. Today, the industry is embracing technology to accelerate growth and expand financial inclusion.
The savings and credit cooperative (SACCO) sector in Africa is aggressively scaling up its digitization efforts to not only drive financial inclusion to the last mile, but also ensure underserved consumers have access to services funds that were previously inaccessible or difficult to obtain.
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The Kenyan FinTech Kwara, founded in 2018 by Cynthia wandia and David Hwan, was developed to help unbanked and underbanked people create frictionless wealth. Kwara is also working to help East African credit unions move to digital platforms.
Its $ 4 million funding round earlier this month, led by Breega and the SoftBank Vision Fund, is working on building a neobank for SACCOs, How We Made it in Africa reported on Wednesday (December 29). .
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Kenya National Police deposit collection SACCO National President David Mategwa believes the technology will bring commodities such as credit, savings and pensions to underserved populations in the most remote areas.
“Members of a SACCO in remote areas can now transact without needing to visit a physical branch,” Mategwa said, according to the report.
He added that mobile money transfer services like M-PESA are already helping to bring about big changes, such as promoting paperless transactions. However, smartphone apps will be a game-changer, offering a wider variety of financial products and services.
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“Kwara provides members of a SACCO with omnichannel transaction means – web apps, Android, iOS and, most importantly, USSD – that are straightforward, well understood in mobile money usage and do not require a smartphone,” Wandia told Ventures Africa. “We will continue to ensure that as many features as possible are available to all members of a SACCO. “