Kwara, a Kenyan fintech company that digitizes credit unions (sacco), more than doubled its customer base last year, raised $3 million in seed extensions, and signed an exclusive digital solution with the Kenyan Union. After signing the distribution agreement, we are aiming for huge growth in the next few years. The Savings and Credit Cooperative (Kuscco) is the national umbrella organization representing Sacco.
Following its partnership with Kuscco, Kwara said it has acquired connections to Sacco’s pool of over 4,000 for its banking-as-a-service offering. As part of the exclusive deal, Kwara will acquire Kuscco’s subsidiary Heirnet (a software company and provider of sacco) for an undisclosed amount.
Kwara said the deal with Kuscco came at the right time in its plans to double Kenya.
“We believe we are only a small part of the Kenyan market, so we are really going to invest in products and services that deepen our relationships here.
“The rationale[for the deal]is clear. First, it is an opportunity to generate leads, distribute our core product as quickly as possible, and deepen the competitive moat. This is something no other technology company can sell with Kuscco. They’re betting on us, but we’re growing, so we’ve proven we can do it,” said David Hwan, COO and FinTech in 2019. said Wandia, who co-founded the
The seed extension round was joined by existing investors DOB Equity, Globivest, and Kobalt Music founder Willard Ahdritz. New backers One Day Yes, Base Capital and fintech executives including Mikko Salovaara, his CFO at Revolut, also participated in the round. The new funding brings the total seed raised by the startup to $7 million. Multiple investors participated in the first round, including Breega, SoftBank Vision Fund Emerge, Finca Ventures and New General Market Partners.
Kwara, which also has a presence in South Africa and the Philippines, is growing its customer base from 50 to 120 by the end of 2021 and maintains a 100% customer retention rate. This is proof of the value we offer our customers. The startup says its automated onboarding process ensures customer success and growth.
Kwara’s products upgrade credit union back-office operations, help them move away from tedious paper-based processes and physical branches, and open new avenues for signing up new members and creating new products. open.
The company also has a next-generation neobank app that offers members of partner credit unions access to additional services such as instant loans and third-party services such as insurance. The neobank app’s user base, which can also track finances and payments, has grown 35-fold since its launch last year.
The fintech plans to add features to accommodate Sacco, as well as products for neobank app users.
“We continue to ship more or less enterprise-grade features to large well-capitalized Sacco, Sacco of the same size and level as some banks. We continue to invest in it because it has features and certain ways they need to be taken care of. We plan to add more features to help you get started. We also plan to enter into more partnerships with third parties to add more value to our app users.
“Every time a sacco member leaves the sacco to obtain another service simply because the sacco does not offer it, we believe that member is missing an opportunity to actually benefit from the return of that product. All income generated from these products actually goes back to our members as dividends,” she added.
Credit unions are formed by people with a common interest, or members of an industry such as farmers or teachers, to buy institutional stock, save money, and obtain loans. They are especially popular in developing regions because they offer lower interest rates and easier access to loans than traditional banks. In Kenya, there are only 175 licensed deposit-taking Sakkos as the majority remain unregulated.
