Category Archives: SME solutions

mVisa Launches in Kenya with Free Money Transfers

This week, mVisa was launched in Nairobi. It had earlier debuted as a pilot with Family Bank nine months ago butis now live at eight other banks including Barclays, Cooperative, Ecobank, KCB, National Bank, NIC, Prime and Standard Chartered.

The roll out comes with free person-to-person (P2P) money transfers for mVisa customers at these banks to others registered mVisa members at any of the banks. For example, customers of Cooperative Bank can get mVisa by updating their MCo-op cash phone apps or those without MCo-op cash can get it by dialing USSD *667# on their phones and this will bring up mVisa which they can send to any other mVisa users and pay for goods and services at no extra cost.

mVisa depiction from Visa site.

For merchants, payment is by a QR code within a phone or via a card displayed at a shop or other places of business. QR codes enable transfers without the need for a smart phone and for merchants, they can accept payments without having to invest in expensive point of sale devices such as card readers.

There was a neat video shown about how a boda boda (motorcycle taxi) operator could have a QR code on the back of their safety jacket – and which a passenger could scan to complete a payment. mVisa aims to drive financial inclusion and a comment was made that one cost to using cash (which is not transparent) is that small businesses (SME’s) may have good sales and receipts, but can’t get credit from banks; therefore easing the processing of verifiable payments to a business will enhance its viability.

mVisa is now live in Kenya , India, Rwanda and Egypt with plans to launch in Nigeria, Uganda, Tanzania, Ghana, Indonesia, Kazakhstan, Pakistan and Vietnam underway.

Standard Chartered SME Club

On Thursday evening, Standard Chartered Bank launched an SME capacity building program as part of a partnership between the Bank, Kenya Association of Manufacturers (KAM), the Kenya Investment Authority (KenInvest) and the Institute for Small-Business Initiatives at the Strathmore Business School.

Standard Chartered Bank’s Head of Retail Banking, Mr. David Idoru, noted that the Bank’s strategy in opening a relationship club for its business clients was in line with its Business Banking Recognition Program that aims at growing its clienteles’ businesses through the Bank’s networks and partners. Also that Standard Chartered affirmed that it would be increasing its lending to SMEs by over Kshs 12 billion over the year (It’s loan portfolio as at December 2016 was Kshs 122.7 billion).

Members will get a 20% discount when they enroll in entrepreneurship classes at Strathmore and also get a chance to network with other SME’s in China, Malaysia and Singapore.

IFC in Kenya

A snapshot of the pipeline of approved, pending, and other projects at the International Finance Corporation (IFC) that relate to Kenya. The IFC is the private sector lending arm of the World Bank and lends to private sector projects and entities in diverse sectors such as finance, logistics, energy, communications, and health, among others.

Financial Services

  • (Considering advancing $1.19 million to) Co-operative Bank to increase access to finance to the underserved SME market segment
  •  Britam Holdings (Kenya Shillings 3,553,375, 000 equity (approximately US$35 million for 10.37% of Britam to support the insurance company develop its local agency network, strengthen its capital base, and the integration of a new IT platform.
  • KCB Group ($75 million loan) facility to KCB to be on-lent as Tier II qualifying subordinated debt.
  • NIC Bank ($198,000) and is designed to increase access to finance to the underserved SME market segment.
  • Equity Group Holdings (US$100 million senior loan) to help the Bank grow its lending to Small and Medium Enterprises (“SME”), women entrepreneurs and to support the continued diversification of funding sources.

Communication & Infrastructure

  • C-Squared – IFC ($15 million) together with Google Inc., Convergence Partners, and Mitsui & C to start a partnership in CSquared building metro fibre optic networks in Sub-Saharan Africa starting in Uganda and Ghana
  • Western Indian Ocean Cable Company (US$20 million) to fund regional expansion through the acquisition of additional capacity in Africa, increase connectivity to other fibre optic systems, upgrade its capacity on the EASSy cable and purchase network equipment.

Investment Funds

  • Investisseurs and Partenaires Afrique Entrepreneurs II ($10 million into the $80 million IPAE Fund), that will invest in small and medium companies in West, Central, East Africa and the Indian Ocean Region.
  • LeapFrog Emerging Consumer Fund III ($25 million) to make mid-market growth capital investments into financial services and healthcare investments.
  • Catalyst Fund II, LLC (US$15 million) to the fund that is seeking to raise up to US$200 million in third party commitments to make 8-12 mid-market growth capital investments.
  • (IFC to invest $7.5 million in) Fanisi Capital Fund II, a 10 year closed-end SME Ventures fund targeting growth-oriented SMEs in Kenya, Rwanda, Tanzania and Uganda in four sectors: agribusiness, retail consumer (FMCG), healthcare and education.
  • African Local Currency Bond Fund (investment of $40 million) in a local currency bond fund sponsored by KfW and managed by LHGP Asset Management LLP.

    Food Business
  •  ($3 million loan to) Nespresso (guaranteed by Nestlé S.A.) and $3 million grant from the World Bank’s BioCarbon Fund (to be disbursed through the Nespresso Sustainability Innovation Fund) to support smallholder coffee farmers and producers in Ethiopia and Kenya involved in Nespresso’s AAA Program that is  being implemented by TechnoServe.
  • Kenya Tea Development Agency ($2.7 million)
  • (A proposed investment in Tropical Heat) to finance the expansion plans of the company which has purchased eight acres of land in Redhill to set up a new state-of-the-art factory, free of logistical constraints, and add production lines as needed for exports in the region.
  • (Approved loan of $3.5 million to) Insta Products (EPZ) a producer of ready to use therapeutic food, a high calorie fortified peanut paste based food product.

Energy & Logistics

  • Tobene Power SA – Melec PowerGen thermal plant in Senegal.
  • Africa Logistics Properties (US$10 million in ALP) which will develop and manage Grade A warehousing space in sub-Saharan Africa. For the first phase of this project, ALP is raising US$65-70 million to develop three key strategic sites (Tatu, Tilisi and Embakasi) around Nairobi. In May 2017, they broke ground on the Tatu one which, with 50,000 sqm in three units, will be the largest warehouse in Kenya to be built to international standards.
  • (IFC is looking to invest $5 million in equity with Investec Africa Private Equity Fund II) in Mobisol, a pay-as-you-go off-grid solar electricity provider operating in Tanzania, Kenya, and Rwanda.

Health

  • The Medical Credit Fund (MCF) is a financing and technical assistance vehicle with a mandate to improve access to quality healthcare for underserved populations in Sub-Saharan Africa.
  • IFC is considering a $10 million loan to Meghji Pethraj Shah Hospital (M.P. Shah) is one of Kenya’s oldest and most reputed hospitals for the construction and equipping of a new physiotherapy building and purchase of key medical equipment.

From Other Sources

  • IFC owns 10% of Kenya Airways that’s about to undergo a balance sheet restructuring.
  • As Kenya plans a green bond launch, in in South Africa, IFC successfully raised a 9-year, 1 billion Rand Green Bond via the Johannesburg Stock Exchange.
  • Gulf African Bank aims to support SME businesses in Uasin Gishu County through provision of affordable Shari’ah compliant financing facilities and free business advisory services to be offered in partnership with (IFC.
  • The KCB Foundation and IFC, have a partnership to improve the sustainability of SME’s within the informal sector through IFC training within 2jiajiri to improve the management capacity and business performance of SME’s.
  • IFC invested $15 million in the Stanlib Fahari I-Reit.

Kenya Bankers launch Cost of Credit calculator

Last week, the Kenya Bankers Association (KBA) in conjunction with the Central Bank of Kenya launched the cost of credit calculator feature.

It iss available on the KBA website and as an app (in the google store) and one important feature is that it allows borrowers to see the annual percentage rate (APR) – the true cost of a loan, which can vary greatly from the original loan interest rate that is advertisd. It also enables customers to  download repayment schedules, and see the entire amount that has to be paid back to a bank (the total cost of credit).

Many loan customers pay their installment and get to what they consider the end of the loans only to find they owe a bit more. This is because they only go by the amortization rate (schedule of principal and interest) but leave out other charges and fees which are incurred in securing the loans – such as legal fees, insurance, government taxes and fees, valuation, security and other loan fees.

At the time of drawing a loan, there’s a temptation to forego paying many of these upfront, and ask the bank to add the myriad charges on to the loan – but these can add up over the duration of the loan.

This comes after an earlier attempt by the KBA to get all banks to price their loans around a single rate – the Kenya Bankers Reference Rate – KBRR. This was abandoned after interest rate caps law was passed in 2016.

Microsoft Insiders4Good East Africa

The Microsoft Insider Program connects the world’s largest community of people using technology to make a lasting impact on the world. The #Insiders4Good East Africa fellows were announced on Thursday along with the the concepts they are working on:

  • Mensa Healthcare – Nairobi, Kenya (smartcard-based system enables the centralized storage of digital records for patients and hospitals)
  • Chanjo Plus – Nairobi, Kenya (helps parents keep track of their children’s vaccination schedules and aggregates vaccine supplies)
  • ClinicPesa – Kampala, Uganda (enables individuals to conveniently set aside funds for future health services through their mobile phones.)
  • Kids Comp Camp – Nairobi, Kenya (a coding and ICT training unit aimed at helping youth in tech-scarce areas gain computer skills and enhance their employability)
  • Sahibu – Nairobi, Kenya (offers refugees in camps an SMS platform to connect with each other, share stories and access crucial information)
  • Spurred – Nairobi, Kenya (convenient way for customers to contribute a portion of their points from loyalty programs towards the humanitarian projects)
  • Infoshule – Dar Es Salaam, Tanzania (enables parents to access the academic records at any time, message teachers, and use mobile payments for school fees)
  • Worknasi.com – Dar es salaam, Tanzania (connects startups and freelancers with businesses and office owners who want to share their working spaces and meeting rooms)
  • IV Drip Alert – Kigali, Rwanda (enables nurses to more easily manage intravenous fluids through a wireless alert system)
  • mobScore – Arusha, Tanzania (produces reliable credit scores by analyzing user data from mobile banking and enables Tanzanians to secure affordable loans).
  • Lyons Analytics – Nairobi, Kenya (will develop a system that uses machine learning to track the progression of breast cancer from onset to late stages)
  • Ivomerere – Kigali, Rwanda (enables farmers to manage their watering systems automatically)
  • Sophie Bot – Nairobi, Kenya (an artificial intelligence persona that answers questions about sexual health, providing private, curated, and verified information.)
  • SchoolMaster Solutions – Kampala, Uganda (enables East African schools to use efficient digital systems to manage records and reduce personnel time as result)
  • Mega Gas – Hamisi, Kenya (refines unsorted polythene/plastic waste into clean cooking gas through a process that creates no emissions, residue, or pollution)
  • Mtaalamu Group Limited – Nairobi, Kenya (connects tailors to customers through reviews, a portal, and profile and search functions.)
  • SMART Insider Cheetahs – Nairobi, Kenya (affordable internet to rural and remote areas serving schools, lodges, police stations, and medical centers.)
  • KRHF Managed Telemedicine Hub – Ibanda, Uganda (provides rural clinics with remote access to services of qualified medical professionals)
  • Gawana – Nairobi, Kenya (a ridesharing platform that enables travelers to share long distance journeys and split the cost of fuel)
  • Fem Care – Bweyogerere, Uganda (a phone-like device that provides women with verified information about maternal and child health, in their own language)
  • Azali of (Mayol Ltd) – Nairobi, Kenya (Azali connects borrowers to a multitude of lenders, including small lenders like chamas and SACCOs)