Enrolling members into savings, and investment clubs is a key stage in operationalizing such organizations. But when this is done, the harder part is handling operations, which includes keeping customers’ deposits safe, managing the risks that come with handling savings and loans, and ensuring proper record keeping.
That is where Mfuko Plus comes in handy. This platform is a ‘SACCO Management System’ established and run by Nugsoft Technologies.
The HiPipo 40 Days 40 FinTechs team had a chat with Darius Mutasi, the Nugsoft Technologies Business Development Manager. Below is his take on how his organization is improving SACCOs, improvement in FinTech, and ongoing Financial Inclusion efforts.
QN: What is Mfuko Plus?
ANS: Mfuko Plus is a credit advisory and records management application. The application manages loans, shares, individual and group profiles, and transactions like savings, withdrawals, and transfers; all provided with standard financial reports and detailed transaction reports. USSD and mobile money services have also been recently introduced to the platform. We work with SACCOs, Microfinance institutions, Savings groups, money lenders, and several other credit institutions.
QN: How does your platform work?
ANS: Mfuko Plus runs as a web application and it has two key modules. One is the main platform where businesses like SACCOs, Microfinance Institutions, and others login in to manage their operations (Loans, savings, and other transactions) while the other is a members’ portal where members of the enrolled businesses can self-register, then log in to check their balances and perform several transactions individually. We mainly enroll financial institutions and for them to start, they just visit www.mfuko.net to contact us or request a demo. All they need is a functional computer and an active internet connection (We shield all businesses against internet costs as all our services are zero-rated).
QN: For the years you have been working, what do your numbers look like?
ANS: We have a total of 22 SACCOs enrolled, over 50 microfinance and money-lending institutions/ individuals and 6 Saving Clubs. Across all these, we have over 12,000 members and we have managed cash-flows of over UGX 22Bn cumulatively and in this year alone, about UGX 7.3Bn.
QN: How is Mfuko Plus supporting women, small businesses and the youth?
ANS: To reduce costs of accessing the service among small businesses and the youth, we recently incorporated SMS services, and USSD and went ahead to zero-rate the service. This means all our members can access the service without loading data. Additionally, we revised our pricing to offer lower rates to youth groups, women saving groups, and village/community-saving initiatives.
QN: As an entity actively involved in the FinTech space, are you implementing Level One Project Principles which are Industry Best Practices such as Tiered KYC, Accessibility on Low-Cost User Devices, Real-time/Immediate funds transfer, Same-day settlement, Pricing Transparency, and Irrevocability?
ANS: We enabled USSD in Mfuko Plus to ease accessibility on low-cost user devices. In terms of transparency, we have standard pricing plans for the different modules with no hidden costs in our billing and all transactions are reported accurately. We also identify aggregators who support real-time funds transfers and same-day settlements in order to facilitate a high level of efficiency, flexibility, and productivity.
QN: What is the state of Uganda’s FinTech Industry?
ANS: The industry is very promising and the players are full of potential. Yes, there are challenges, but the opportunities outweigh the challenges. One of the biggest opportunities is the general adoption of technology across the country; there is a reasonable growth in the use of technology across businesses which presents a big market opportunity. The influx of foreign players to support local FinTechs is also an advantage.
However, there are several challenges like the high cost of transactions, especially among aggregators; the stringent legislation around FinTechs compared to other players in the sector; and the low volume of capital/funding that caps several FinTechs from reaching their potential, among others.
QN: In your opinion, how does the 40 Days 40 FinTechs initiative support the industry? What else must be done to improve the industry?
The 40 Days 40 FinTechs initiative extends great visibility to FinTechs and this eventually creates market and much-needed revenue growth. It has also created a conducive atmosphere where various FinTechs can converge to share ideas, opportunities, and avenues for collaboration; all these are extremely vital and deeply appreciated.
If the initiative can introduce an element of funding in the future (either directly or through its partners), especially for start-up FinTechs that have been part of the initiative, there will be a strong impact on how these FinTechs survive and ultimately, on how they grow.
About 40 Days 40 FinTechs!
Mfuko Plus is participant number 34 in the 2022 40 Days 40 FinTechs initiative. The #40Days40FinTechs platform is run under HiPipo’s Include Everyone program that also encompasses other initiatives such as FinTech Landscape Exhibition, Women in FinTech Hackathon, Summit & Incubator and the Digital and Financial Inclusion Summit and Digital Impact Awards Africa.
It offers participants useful tools and an introduction to the industry’s emerging technologies, such as Mojaloop Open Source Software, and guidance from Level One Project foundational material. The skills gained from this initiative cover Level One Project Principles, Instant and Inclusive Payment Systems (IIPS), Inclusive Finance and FinTech in general.
According to Innocent Kawooya, the HiPipo CEO, despite the rapid adoption of digital financial services, an average of 40 percent of Africa’s adult population remains financially excluded and something must be done.
“Financial exclusion continues due to the lack of interoperable, open-loop, cost-effective, real-time, and secure retail payments systems/switches to digitally connect large numbers of low-income users onto formal financial rails. The 40 Days 40 FinTechs initiative is accelerating discussions on building industry-led Instant and Inclusive Payment System (IIPS) across the East African region and continent.”