With the help of a $3 million seed extension and an exclusive digital solutions distribution agreement with the Kenya Union of Savings & Credit Cooperatives (Kuscco), the national umbrella body representing saccos, a Kenyan fintech company called Kwara has more than doubled its client base in the past year and is planning for explosive growth in the years to come.
Kwara’s banking-as-a-service solution now has access to a network of more than 4,000 saccos thanks to the Kuscco relationship. Kwara is acquiring Kuscco’s wholly-owned subsidiary IRNET, a software firm and supplier for saccos, for an undisclosed sum as part of the exclusive arrangement.
As the Kuscco transaction follows closely on the heels of Kwara’s $3 million seed round extension, the company believes it is at the perfect moment to double down on Kenya. The creator of Kobalt Music, Willard Ahdritz, also participated in the round with previous investors DOB Equity and Globivest. The funding round included participation from new investors like One Day Yes and Base Capital as well as fintech industry leaders including Revolut’s Chief Financial Officer Mikko Salovaara. Including the previous round, the company has now secured a total of $7 million in early capital from investors including Breega, SoftBank Vision Fund Emerge, Finca Ventures, New General Market Partners, and others.
We feel like we’ve only begun to explore the Kenyan market. Kwara co-founder and CEO Cynthia Wandia told, “We’re basically going to be really investing in goods and services that enhance our partnership here.”
The transaction makes sense since it will help bring in more customers, get our main product out to more places, and broaden our advantage over the competition. Because of the unique nature of our cooperation, no other technology firm will be allowed to jointly promote with Kuscco. Wandia, who launched the fintech with David Hwan in2019, stated, “They are putting their bets on us, but we have been able to show that we can do it as we continue to develop.”
Kwara, which now has a presence in South Africa and the Philippines, has increased its clientele base to 120 from 50 by the end of 2021, maintaining a 100% customer retention rate as a result of the value it provides to its customers. The firm claims that the success and expansion of its client base are guaranteed by the automation of the onboarding process.
By modernising credit unions’ back-end operations, Kwara’s solution frees up space for fresh member acquisition and product development without requiring the establishment of costly branch locations or time-consuming paper-based procedures.
Credit union members who work with the firm may use the company’s next-generation neobank app to get access to a wider range of benefits, including rapid loans and products from third parties like insurance. It was reported that the number of people using the neobank app, which facilitates direct deposits into sacco accounts as well as the monitoring of budgets and payments, has increased by a factor of 35 since its introduction in the previous year.
The financial technology company has plans to expand to include more tools for saccos and more services for their customers.
“We continue to supply more or less enterprise-grade features for the major, well-capitalized saccos, the ones that are on par with some of the banks in terms of scale and sophistication. As such, we will keep putting resources into catering to their unique set of requirements, which include a number of features and methods of support. And then spending money on the modern banking experience, which means including additional tools to assist members in creating a unique perspective on their objectives and being serious about attaining them. “We’re looking to partner with companies who are providing value to these end clients,” Wandia said.
We think it’s a shame when a member of a sacco goes elsewhere to receive a service that the sacco might have made money on had it offered. She further emphasised that the company’s profits from selling such items were distributed to its shareholders in the form of dividends.
Farmers and teachers, for example, together with others who have a similar interest or profession, create credit unions by purchasing shares in the organisation, saving money, and borrowing money. The low interest rates on their loans and the ease with which credit may be obtained make them particularly attractive to borrowers in underdeveloped countries.
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