According to a report by the Bank of Tanzania, “10.6 million adults in Tanzania continue to avail financial services informally.” The research findings also show that these SACCOs and other informal financial groups (IFGs) penetrate into virtually every household in Tanzania.
The Savings and Credit Cooperatives (SACCOs) in Tanzania play a critical role in the socio-economic development of communities by encouraging saving habits and granting loans to the members. However, they still face various challenges as they operate in this ever-changing digital environment.
To find that out, Wakandi’s sales team including Ketil Østrem, Sales Director and Sele Mduda, Key Account Manager and Co-founder at Wakandi visited Tanzania to gain deeper insights into the market. During the trip, the team met with Mwashita SACCOS and the KKKT Arusha Roads SACCOS and other SACCOs and microfinance institutions in Dodoma and Iringa town in Tanzania.
The aim of the trip was to meet these savings groups in person and learn more about their business models, how to conduct transactions, and what challenges they face in day to day operations. The team has also been able to sign various Memorandum of Understanding (MoU) and Letter of Intent (LOI) during the trip.
Visiting SACCOs in Tanzania
The team met various SACCOs in Tanzania to confirm that they still depend on cash transactions and manual processes for daily transactions. They follow a simple model of handing out cash to the admin during the meeting and receive cash when they avail loans. Though the amount is mostly saved in bank accounts. Dealing in cash leads to a number of problems in terms of security, store of value, frauds and theft.
Moreover, it also makes it tough for these groups to maintain a record for these transactions (if not recorded timely and correctly) as no digital evidence is present. Human errors and fraudulent activities become more common in such cases.
As Wakandi aims to enable these savings groups to manage their savings and finances better, this was also an opportunity for the team to demonstrate the capabilities of the Credit Association Management System (CAMS). The team presented the system to the group admins through a proof-of-concept and showed what they can do with the application. The team received an extremely positive response during the presentation and many of the SACCOs were ready to try it out in real life. They felt that the app can really help them simplify their day-to-day operations and automate various processes.
The feedback received from them offered a deeper understanding of how SACCOs in Tanzania operate. It inspired the team to design the solution so it reflects the solutions to real problems the groups face today.
Building the path to cashless societies
With CAMS, Wakandi focuses on offering SACCOs with automated and simplified function, ease of use and better security. Working in close collaboration with the communities helps us to gain constant feedback as we move forward. The team feels more and more confident with the solution as we receive positive feedback from the customers.
The team will continue to meet SACCOs in Tanzania and other countries in Africa to gain deeper insights and improve our solution. It will also give a chance to engage more financial groups for pilot projects in the coming years.