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The Power of Mobile Banking: How Leja Empowers SMEs and Saccos



By Rukia Salim

Synopsis of Leja

Leja is a cutting-edge mobile banking application designed specifically for small and medium-sized enterprises (SMEs). Launched in Kenya in 2020 and backed by leading venture capital firms, Leja is now expanding its reach to countries across Africa. Available as both an Android application and a USSD platform, it allows users to access its wide range of services, regardless of their device or connectivity. With over 1 million downloads, the app has redefined the way small businesses manage their finances.

In a bustling corner of Nairobi, Grace’s Handicrafts and Clothing has been defying all odds, operating successfully for the past 20 years without a formal bank account or Sacco membership. The small and medium-sized enterprise (SME) boasts an impressive monthly cash flow of Sh1 million ($9,000) and has weathered many challenges along the way.

The Struggle with Financial Institutions

Grace’s journey in the world of entrepreneurship began with selling her unique creations at local markets. Over the years, her business acumen and high-quality products allowed her to scale her venture, garnering a loyal clientele and solidifying her reputation.

However, managing finances became increasingly difficult as her cash flow grew. Grace struggled to find a financial institution that catered to the unique needs of her business. Formal banks were intimidating and unapproachable, with stringent documentation requirements and impersonal customer service. On the other hand, traditional Saccos, while more familiar, lacked the technological advancements to offer Grace the convenience and efficiency she sought.

Enter Leja: A Game-Changer for SMEs

Leja stepped in to fill this void in the market. With over 100,000 SMEs actively using Leja on a monthly basis, the app has revolutionized the way small businesses manage their finances. Grace was immediately drawn to Leja due to its seamless onboarding process. She was able to open an account within minutes, all from her smartphone, without the need for an existing bank account. Leja’s user-friendly interface and extensive range of services, from real-time transaction updates to mobile lending, made managing her business finances a breeze.

The Sacco-Leja Partnership: A Win-Win Situation

Recognizing the opportunity to revolutionize their services and cater to the needs of SMEs like Grace, several Saccos have partnered with Leja. This collaboration not only allows Saccos to offer their customers a state-of-the-art mobile banking experience, but also enables them to tap into this massive high-value market. 

By offering Leja to their customers, Saccos can achieve impressive growth in membership and deposits. For instance, one of their Sacco partners reported a 25 per cent increase in membership within the first six months of adopting Leja and experienced a 30 per cent increase in deposits during the same period.

Call to Action: Saccos, Embrace Innovation and Empower SMEs

Dear Sacco leaders, it’s time to embrace innovation and stay ahead of the curve. By partnering with Leja, you can not only enhance your services and boost your membership numbers, but also play a crucial role in empowering millions of SMEs like Grace, fostering financial inclusion and fuelling economic growth.

As Leja continues to break new ground in the realm of mobile banking, Saccos have a unique opportunity to be part of this transformative movement. Don’t let this chance slip away. Join the Sacco-Leja partnership today and embark on a journey that will redefine the future of banking small businesses.

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How Policy Innovations Can Strengthen Cooperative Businesses in Kenya



By Maureen Gitau

Registration of cooperative businesses is a challenging issue for policymakers and stakeholders in the cooperative sector. Under Schedule Four of the Kenyan Constitution, cooperative development is a fully devolved function, meaning oversight for cooperatives was transferred from the national government to county governments, including the transfer of powers and funding. Devolution is important because it ensures that decisions are made closer to the local people, communities and businesses they affect. Some counties have taken up the registration of cooperatives at the county level, resulting in challenges related to dual registration, lack of clear guidelines on the registration of cooperatives doing business in more than one county, and how to maintain cooperative registries at both the national and county levels.

To manage these concerns, the National Cooperative Development Policy, 2019 — approved by Parliament as Sessional Paper No. 4 of 2020 — provides that the national government is responsible for the registration and cancellation of cooperative societies. These registration issues are critical and call for policy innovations that make it possible for cooperative businesses to thrive. There is a dire need to institute novel procedures for the documentation and data management of cooperative businesses’ registries.

Christiansen J. & Bunt L. (2012) advocate for the need to make the best possible use of public resources to create better outcomes for the population rather than merely ensure ‘service delivery.’ The intention of devolution, or decentralization, to bring services to the people is not enough when marred by inconsistent procedures and processes. The inconsistencies are made worse by a lack of access to information, thereby disincentivizing compliance. There is a need to come up with solutions that are characterized by an empathic relationship with the concrete situation of the citizen — in this case, cooperatives.

A co-operator in Kenya should be able to register a cooperative business in the shortest time possible, have access to information with clear guidelines and rules as to how to register, and do so on a platform where making payments towards the registration is easy and secure. This is easier said than done, though, as it not only poses a new way of working, budgeting and decision-making for policymakers but also a new way of thinking about how to incorporate innovations in policies.

In 2014, regulatory and legal reforms aimed at enhancing and promoting the ease of doing business in Kenya realized it was important to make the country’s business sector more competitive by streamlining and automating the business registration process. These reforms targeted the incorporation and insolvency of companies in Kenya with a view to creating an environment where businesses can thrive. The success of doing business in Kenya through the Business Registration Services (BRS) online platform provides a precedent for similar reforms in the cooperative sector.

Rather than maintaining the status quo, can public interventions create explorative processes that uncover and make use of untapped potential? The national government can reduce the cost of doing business by developing and adopting simplified processes that improve access to services and create new channels for revenue collection. In trying to resolve the issue of registering cooperatives and increasing compliance, is there an opportunity to develop a digitized registration system? A digital system could help reduce duplication, ensure prioritization and tracking of applications, and minimize political interference in the registration process.

Reforms cannot operate in a vacuum. Sector stakeholders need to have an open public-private dialogue on how this idea can be implemented. Advances in digital government-to-business (G2B) processes have the potential to automate and organize information much more dynamically, which would strengthen cooperative businesses, eliminate unnecessary red tape and simplify complicated administrative procedures and processes. This re-envisioned digital registration system would allow the Government of Kenya to play a more facilitative role in full view of the cooperative database at both levels of government as well as through shared decision-making.The writer is a Policy&Legislative Affairs Officer for Global Communities’ Cooperative Leadership, Engagement, Advocacy & Research (CLEAR) Program. The article was first published by Global Communities

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SUCCESS STORY: Kenyan SACCOs help Women Turn Entrepreneurial Dreams into Reality



By Linda Karimi

Nancy Kariuki was a licensed pharmacist who wanted something more: she dreamed of becoming an entrepreneur. Eight years into a career in sales for drug companies, at age 40, she finally took the plunge.

 Keenly aware of the challenges women-owned businesses face, Nancy had been saving money over the years, and by 2020 had amassed Sh1 million (approximately $7,300) in start-up capital.

She opened her business, Essos Pharmacy, in the central business district of Kerugoya, a town of 15,000 in central Kenya.

Nancy was successful for two years in establishing and growing the business. But, in 2022, Essos was struggling to meet increased demand caused by the COVID-19 pandemic.  She needed capital and turned to  Fortune  SACCO.  SACCOs, savings and credit cooperatives, are a popular financial services option in Kenya.

Members of SACCOs invest in them or make deposits and can use that value as collateral when borrowing from the institution. They often can borrow more from a SACCO than from a bank and at a lower interest rate.

Fortune SACCO is one of ten SACCOs participating in a USAID-funded World Council of Credit Unions project under the Cooperative Development Program (CDP) called Technology and Innovation for Financial Inclusion (TIFI). The project seeks to enhance the capacity of SACCOs to lend to micro-, small- and medium-sized enterprises through improving credit risk management, streamlining and simplifying the lending process, and increasing the number of quality financial products available to these businesses.

Fortune granted Nancy a loan sufficient to do what she most wanted – create new jobs. She hired a staff of four, after previously relying only on her husband for extra help. She also enrolled her employees in the National Housing Insurance Fund and the National Social Security Fund, which provide them with healthcare, a pension and social protection.

Nancy also used the money she borrowed to upgrade her point-of-sale and inventory system. She now has more visibility over the operations and financial position of the business. The data also enhances her ability to borrow money in the future, and at a lower cost, because she can now provide reliable financial statements to lenders.

Within a year, the business tripled its revenue and now competes with larger pharmaceutical businesses as a key player in the market. Nancy’s success not only contributes to the economic growth of the community but also provides a source of inspiration for other women entrepreneurs in the area.

The USAID/CDP-TIFI project is transformative because it unlocks the potential of SACCOs such as Fortune, improving how they lend to micro-, small- and medium-sized enterprises. SACCOS in turn helps unlock the potential of those businesses, such as Essos Pharmacy, and people like Nancy, who turned her dreams into reality and improved her community in the process. She is a shining example of what can be achieved with the right resources, determination, and support.

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Dividends Are Not Easy Money to Be Splurged; Be Stingy with Them For Thy Sake




By Silas Nyanchwani

I have a personal rule for every cash I receive as profit: I have to buy myself something that can materially remind me that I earned such cash at some point in my life.  Because money has a way of evaporating, and if not careful, you may not point out where the cash went. So, why not create a memory or have something that reminds you of your discipline and patience?

As the joke goes, in Kenya once you break a Sh 1,000 note, some 800 will disappear. But the bigger mystery is how you can have Sh 100,000 in your phone, pay some small bills like rent, Sh 20,000, utilities, some Sh 17,000, fuel, Sh 5000, repay some debt of Sh 6,000 you owe a friend, sort some digital lender their Sh 10,000 since they have been a nuisance, and in your mind, you will be like, ‘I still have Sh 40,000’. The shock on you when you will check the balance only to find a measly Sh 3,700 remaining. You will not immediately account for the nearly Sh 33,000 that you spent on frivolous stuff while you were thinking that Sh 100,00 is infinite.

If you are poor with money like me, thus you spend cash and budget later, you encounter this problem every time you get some money, say dividends, some loan, or any windfall. There is an African generosity that can be wasteful because it is never checked. Because you will pay for lunch for a friend or two in a high-end hotel, and the Sh 4,400 will feel like nothing when you have some Sh 100,000. You will throw some random round in a bar and some Sh 3,200 will be gone. Charge it to good times, after all, “si ni mkono narudisha”. Then there are some random few hundred we send to our relatives, or the Sh 2,000 we send to a friend who swears they will return it but never do. A gift like this to a female friend, a random girl you met in a bar over the weekend who will call you with an emergency, and such, and you would have chalked up some Sh 20,000 unaccounted for.

And we always feel bad about this, yet we are helpless. Going over your MPESA messages to see where the big mistakes happened is never helpful. It is always the small, small amounts that look insignificant that compound to an unaccounted 35 per cent of your income.

To beat this, there is no shortcut around budgeting. You have to plan for any money you are anticipating. Whether a salary, income from business or any other income stream, don’t be the guy who spends the money first then budgets later. Have some personal realistic rules.

What works for me is admitting that I can be wasteful, and capping the wastefulness. As a rule, 85 per cent of the money has to go to the intended use, no matter what. In these high inflationary times, expected windfalls can help us beat inflation. I recently went shopping and the cost of everything seems to be going steadily up every few months. If you buy toothpaste for Sh 200 today, it will be Sh 340 by the end of the year. And this sucks because incomes rarely keep up the pace of inflation, especially if the economy is going through a rut.  

Thus, if there is some windfall coming your way, this is the time you beat inflation. Buy wholesale, buy large quantities that last longer, and save a coin.

The other financial blind spot, especially for men is black tax. Often, we tend to be generous with cash that we didn’t work extra harder for. And most of us can be reckless with it. You receive your Sh 200,000 dividends and you spend a quarter of it meeting the never-ending demands of dependents, parents, or siblings. And since sometimes the help is in small quantities of cash, we don’t think how in the long term this affects our savings. But this need not be the case. Have a cap that you cannot exceed, no matter the circumstances. If you decide 5 per cent of your profit or income is for charitable acts, don’t exceed that. There are only so many fundraisers you can pull off for friends, colleagues, and family. Be mindful of especially for the money that you think came easy.

So, as the year is likely to be tough, this time round there is no luxury to squander our dividends. Reinvest, bolster that business, go slow on lavish spending, cut it down instead, and ensure that you save something for the rainy day. But don’t deny yourself too much. Grab that coconut fish or kienyeji chicken. Get yourself some good poison. Or a good jacket. Something that can remind you that patience has its own rewards. But tone it down.


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