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German software company, Mambu, has set base in Kenya with the launch of an online banking platform that promises to transform book-keeping in Saccos.
The firm has partnered with AllenHark Group — which comprises companies holding various interests in telcos locally — in a Sh3.2 billion deal. The agreement will make AllenHark a partner in efforts to step up technology innovation in East Africa.
Mambu, which has a 20-year experience in banking, targets the emerging markets with its application that automatically audits accounts and keeps the records online.
Mambu co-founder and chief operating officer, Mr Frederik Pfisterer, said they are setting their sights on merchants, who mostly bank with Saccos and microfinance institutions.
Already, the platform is used by over 100 financial institutions in close to 30 countries.
“We are excited because our focus is to reach over one million unbanked in rural areas, who have prospects of saving with Saccos.
Kenya provides a thriving market for us,” said Mr Pfisterer.
Kenya is the starting point of Mambu’s business in Africa. It plans to expand to Uganda, Tanzania and Rwanda where Internet penetration is widespread.
The software, known as ‘banking 3.0’ is hosted in the cloud system. It offers fully auditable accounts for Saccos and microfinance institutions.
Mambu manages the software while AllenHark connects it to telecommunication companies for ease of transactions via mobile money systems.
Saccos, banks and micro–finance institutions would access the system and use it to track book-keeping.
The software uses social media to determine whether or not a customer is creditworthy. This is likely to be a boon to millions of borrowers, who have no collateral for a loan or mortgage.
It is expected that microfinance and Saccos, which will use the platform, will expand their loan books.
The application takes advantage of mobile and tablet technology to provide a reliable financing option for micro-lenders, small business owners as well as individual borrowers.
Through the system, loans will be disbursed and repaid using M-Pesa platform. In case of system outages, the platform is hosted by a mobile application on Android, which acts as a temporary back-up.
Speaking during the launch in Nairobi last week, KPMG consulting director, Mr Joseph Muga, said the service is flexible and would enhance banking for merchants because they make monthly contributions using their mobile phones.
“It has reliable speed at scalable costs and will be revolutionary, especially in the rural areas,” noted Mr Muga.
He said the platform has a Global Positioning System that allows Saccos to know all their customers and their locations. This enables Saccos to improve their services.
In future, Mambu plans to enhance its services to combine community-based microfinance techniques with social media data to help the unbanked and under-banked obtain loans.
The focus is to push Saccos to use data on social media to understand the market and offer more affordable credit, while adhering to the sector’s stringent regulations.
Saccos have been focusing on reducing payouts to members to raise cash to maintain a core capital of Sh10 million, which is a regulatory requirement.
Many Sacco members have in return gone for better banking options.
Nonetheless, Mambu says the software will encourage transparency, accountability and transform the way financial institutions work, making them break even, in addition to meeting targets set by the Sacco Societies Regulatory Authority.
– Daily Nation