How KopaCent Africa leverages on tech and mobile money to offer salary advances

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Wachera Muriu, founder and director at KopaCent Africa-Photo By Versatile Photographers

Wachera Muriu talks of founding KopaCent and how it empowers people to live a better life through responsible financing

A vibrant and expanding small business sector can be a major catalyst for inclusive growth but small and medium-sized enterprises (SMEs) have a difficult time accessing the financial services that can fuel that growth-FSD Kenya.

In Kenya, traditional bank financing is often severely constrained, especially for SMEs. In understanding their plight, Wachera Muriu initially formed KopaCent Africa to fuel SMEs growth by delivering appropriate financial products and services.

“I have been in financial industrial for ten years. I have a wealth of experience in corporate and retail banking, but when in joined Rafiki Microfinance Bank to focus on SME financing, the difficulties small entrepreneurs faced in accessing credit facilities was heart wrenching,” says Wachera Muriu while talking to StartUp Magazine at her office in Krishna Center in Westlands Nairobi.

She was moved by the inspiring stories of small-time entrepreneurs who ran impactful businesses but often lacked appropriate financial support to wheel their growth.

In 2018, Kenya’s overall GDP growth was projected at 6 per cent with SMEs contributing 3 per cent.

“SMEs make huge contributions to our economy through provision of goods and services that improves the lives of many people,” says the entrepreneur.

As at 2015 alone, SMEs employed more than 11 million people thus constituting about 80 per cent of Kenya’s total workforce.

“A growing SME sector has a positive impact on Kenya’s GDP through value addition, increased output and profits. Therefore, protecting and enhancing the prosperity of this sector is of strategic importance to the country’s economic wellbeing,” she adds.

More often, Wachera would hold candid conversations with entrepreneurs to understand their business model and outline what hinders their growth. “I critically analyzed their mandates, competitiveness and product offering among many other things and lack of appropriate financial assistance would often come out as a hindrance.”

So she started lending to them as a side hustle while still keeping her day job and as a service delivery manager at the bank.

Her efforts were transformative to say the least.

Soon, these entrepreneurs started to grow and created more employment opportunities. With their growth, they needed more money to fund their operations. Her good works quickly spread within their circles, and she became a darling to these entrepreneurs.

Along the way her thriving side-hustle needed more attention than her day-job and resolved to focus on it.

Salary advances

KopaCent Africa was thus registered on 1st June 2016.

A few months down the line she discovered a new niche. Lending to salaried people was more convenient and presented lesser risks. This is because they had a predicted income pattern as opposed to entrepreneurs whose incomes were irregular.

“In this line of business, it is not how much you lend but how much you collect that defines your growth. With salaried people, I found that I could lend and collect over 95 per cent of the money. That means our default rate remained under 3 per cent, way below the industry rates.”

She narrowed her focus to this niche.

(L to R) Some of KopaCent team members- Veronica Wanjiku, John Karanja, Wachera Muriu ( seated), James Kariuki, and Mercy Chemutai.
Photo By Versatile Photographers

Leveraging on tech

KopaCent now leverages on technology and mobile money to offer employees affordable salary advances. “We are more flexible than mainstream lenders and we deliver requested advances in less than 30 minutes,” says the executive.

Wachera understands that employees might encounter financial challenges in trying to make ends meet particularly due to the high cost of living. “Whereas a number of lifestyle adjustments can be made to ensure that your income fits your budget, it is difficult to adjust some important cash needs such as emergencies, medical fees, school fees, rent or occasions such as car repairs among others,” she explains.

KopaCents salary advance loans offer one with an access to a bridging finance that allows them to meet their financing needs in a smooth manner.

“We are convenient and transparent with no hidden charges. Our team works constantly to offer better experiences to customers,” she says adding that, “Our standard loan ranges between Kshs 5,000 to Kshs 60,000 but the limits can exceed that bracket.”

Providing cash advances within minutes have made the firm popular in this line of business. Other mainstream lenders would take days to approve a loan facility making KopaCent a perfect fit for instant financing, she explains.

Most of the KopaCent clients are middle income earners, with 65 per cent of them being male. With a trusted customer base and good relations, many of them repay the loan in stipulated time. “We rarely have default issues except for a few cases,” she says.

 Impact

Being a seasoned financier, Wachera opines that there is a huge connection between credit and economic growth.

To begin with, fintech in particular has deepened financial inclusion and provided millions of people with access to financial services and products.

Secondly, digital lenders have provided people with quicker financial services in a seamless manner, making it easier for them to manage their financial obligations on a time to time basis.

Lastly, fintech providers that operate via online platforms can electronically provide increased convenience to users providing access to such financial services from any location. They don’t necessarily need to go to a banking hall to enjoy a financial facility.

In addition to playing such key roles in an economy, she hopes to see her brand grow to be a household name and have a continental foot print.

 What you need to know about Wachera

  • She had a passion for entrepreneurship from a young age.
  • While at Daystar University, she bought second hand clothes from Gikomba market and sold them at a profit to colleagues.
  • She has tried a hand at entrepreneurship and failed severally, but every step has been a learning experience.
  • She hires people based on integrity and trust.
  • She is a people’s person and knows how to create and build relationships.
  • She is an avid reader.

 

 

 

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