DCB Bank is digitizing Village and Community Banking Groups. 40 Days 40 FinTechs Tanzania Day 34

Savings and credit services are spread across the world. Away from the formal banking systems, most people across Africa come together under small village, community and work associations and start banking groups. They then save on a daily, bi-weekly, weekly, after a fortnight or monthly. They meet periodically, usually every week to review the progress their group is making, evaluate their financial health and also process credit requests. 

Dominated by women, youth and informal traders; these community-based Banking groups always face one major challenge; reliance on manual systems that are prone to misuse and endless abuse. Among other ills, manual financial management systems are also time-wasting and costly.

To change this, players are pulling these community savings and credit groups towards embracing digital financial services that allow for systematic, electronic and seamless financial management.

In Tanzania, DCB Bank is spearheading the digitization of Village and Community Banking (VICOBA) groups through its DCB Digital VICOBA proposition.

According to Brown Kessy, the DCB Bank, Digital and Innovation Manager, DCB Digital VICOBA is using technology to transform village and community banking. The platform allows VICOBA groups’ members to access banking services digitally via USSD and a smart mobile APP available on both Android and IOS.

“The genesis of this application is that we had thousands of VICOBA accounts sitting at DCB Bank and spread across several remote areas where they can not access banking services. While they were able to deposit through our bank agents, they were not able to withdraw because these VICOBA accounts have multiple signatories that approve the funds. So, if a member requested for an emergency loan, all the signatories had to travel to a branch to withdraw this money and give it to the member. In case it happened that some of the signatories had travelled and were not available, then the VICOBA member could not get that emergency loan on time,” Brown Kessy said.

He added: “What we have done is that we have automated this service, making it accessible anywhere and anytime. If a member is requesting a loan, all VICOBA leaders will get a notification about the member who has requested a loan. They will then review and approve it electronically after which the loan amount will be transferred from the group account and the member will instantly receive the loan. The platform allows for self-onboarding after which users can access all the digital banking services through the APP and USSD across all mobile network operators (MNOs).”

Brown Kessy noted that financial technology has positively impacted the banking landscape in Tanzania. He urged the industry regulators to ensure that government policies and laws support financial inclusion innovations because this will further catalyze job creation, business improvement and overall economic transformation.

We interacted with DCB Bank on Day 34 of the 40 Days 40 FinTechs initiative for Tanzania. First implemented in Uganda, 40 Days 40 FinTechs is an annual FinTech Innovation initiative presented by HiPipo to recognize and celebrate individuals and organizations who are making significant strides in promoting financial inclusivity through the use of technology.

It is aimed at promoting innovation and collaboration among FinTechs in Africa. The initiative is designed to provide FinTechs and startups with mentorship, training, exposure, and networking opportunities to help them grow and scale their businesses.

“40 Days 40 FinTechs is a very good platform as it gives visibility to what is happening in the market. It gives innovators a chance to showcase their products and services while at the same time informing policymakers and investors about the opportunities and challenges in the industry,” Brown Kessy said.  

40 Days 40 FinTechs initiative Tanzania is part of HiPipo’s broader Include EveryOne Program that is generously supported by the Gates Foundation and implemented in partnership with Level One Project, ICTC Tanzania, Ideation Corner, Cyber PLC Academy, INFITX, Crosslake Technologies, NG Films, Founders Academy and Mojaloop Foundation.

The Include EveryOne program is a beacon of acceleration of FinTech Innovation, empowerment for Women in FinTech and a catalyst for investment and development in the ICT sector. Minus 40 Days 40 FinTechs, other initiatives under the Include EveryOne Program are the FinTech Landscape Exhibition, Women in FinTech Hackathon, Summit and Incubator, Digital Impact Awards Africa and the Digital and Financial Inclusion Summit.

HiPipo is recognized as a premier advocate of digital Innovation and financial inclusion champion, a fervent proponent of the #LevelOneProject. HiPipo has been at the forefront, actively promoting digital innovation, Instant, Inclusive Payment Systems (IIPS), and DFS across Africa. With a legacy of advising, mobilizing, and facilitating the adoption of inclusive financial services, HiPipo’s efforts have been nothing short of transformative! For almost two decades, HiPipo has successfully facilitated the inclusive adoption of these crucial services.