The government-funded Switzerland Capacity Building Facility (SCBF) recently agreed to disburse an unspecified amount of grant funds to Kuunda Digital, a financial services provider based in Mauritius, to help expand its Hapa Cash product, which supplies overdraft protection to agents of financial services providers in Tanzania. Lack of liquidity, particularly on nights and weekends, results in as many as one in five digital transactions being denied in the country. The product is priced such that the fee for the overdraft is less than the commission the agent earns for performing the transaction. The overdraft loans average USD 8 and are to be repaid within a single day.
In particular, the grant from SCBF is meant to expand the scale of Hapa Cash through increased marketing to agents, especially women; increased training for agents, especially women; boosting the computing capacity of the service; and “improving the customer engagement engine.”
The target market comprises over 120,000 agents that work with one or both of the following financial services providers: M-Pesa, the mobile money service of Kenya-based Safaricom; and FINCA Microfinance Bank, the Tanzanian affiliate of US-based NGO FINCA International.
Kuunda was founded in 2018 and focuses mainly on digital financial solutions for informal markets. In addition to Hapa Cash, it offers a prediction tool that assists agents in preempting shortfalls and PayDirect, a crowdfunding solution for borrowers requesting support from family and friends to repay debt. Kuunda also provides advisory, business development and deal management services. The firm has not released its financial data.
Founded in 2011, SCBF funds technical assistance to help financial institutions in developing countries expand delivery channels for services such as insurance, loans and savings. SCBF, which is supported by the Swiss Agency for Development and Cooperation, reported total assets of CHF 10.5 million (USD 10.8 million) as of December 2019. It has funded 130 projects in 43 countries.
M-Pesa was launched in 2007 by Safaricom in partnership with the UK-based Vodafone Group. The service has 41 million active customers and 432,000 agents in seven countries as of 2021.
FINCA International was established in 1984 as the Foundation for International Community Assistance. It is headquartered in the US city of Washington. FINCA operates in 44 countries in Africa, Eurasia and Latin America. FINCA Tanzania was founded in 1998 and has its head office in the city of Dar es Salaam. It offers savings accounts, loans, money transfer and payment solutions. As of 2021, it has a loan portfolio equivalent to USD 25.4 million and caters to 364,000 clients. The amount of deposits held by the institution has not been released.
By Aakansha Shenoy, Research Associate
Sources and Additional Resources
SCBF press release
https://scbf.ch/scbf-supports-the-first-revenue-accretive-mobile-money-agent-loan-product-in-africa/
Kuunda Digital homepage
https://kuundadigital.com/
M-Pesa Tanzania webpage
https://www.vodacom.co.tz/mpesa
M-Pesa webpage
https://www.vodafone.com/what-we-do/services/m-pesa
FINCA Tanzania homepage
https://www.finca.co.tz/
FINCA International homepage
https://finca.org/
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