Online platform that makes chamas more transparent

Erick Oyugi was a member of an investment club whose aim was to pool members’ funds for investments.

Together with his close friends, they started the club to enable them buy land across the country as well as stocks in leading companies, among other business venrures, to uplift investors’ lives.

“Our biggest problem was on how to effectively collect money in a way that was transparent for all of us,” the 33-year-old reckons.

Inspired by this, four years ago Mr Oyugi started Malipo Circle app, which is owned by the Malipo Circle Limited, that enables groups to come together and contribute towards a specific purpose.

The app, which runs either on a smartphone or computer, allows one to form a chama, come up with a peer-to-peer lending and borrowing circle among friends as well as a fund-raising groups for specific purposes such as wedding, medical, school fees, funeral.

Some of the app’s functionalities are collections, disbursements, loans, record keeping, reports, marketplace, among others.

“Our innovation is a platform where a group of people with common financial interests can transparently transact with each other with the goal of achieving collective financial prosperity,

“The platform enables members to borrow from each other and from the collective pool. It enables other institutions to plug into these financial groups and offer them services like insurance, discounts for their day to day purchases through our extensive application interfaces,” Mr Oyugi says.

He says that the solution is also applicable to companies.

“We have what we call a collection circle which is for companies that want to register on Malipo Circles so we get their VAT details, PIN numbers, etc. You can also choose if you want Malipo Circles primarily for collections or disbursements, etc.” says the Jomo Kenyatta University of Agriculture and Technology Computer Technology graduate.

So far, the platform has supported more than 600 chamas, and overseen over 20 million transactions among 30,000 users.

“We have around 15,000 users at this time. The growth of our user base has been largely organic to-date although we did do some advertising in the period just preceding the Covid-19 lockdown in Kenya which made us pause our marketing efforts to-date.” he says, adding that the growth was achieved through customers’ referrals and experiences.

A total of Sh2 million was invested into the company while starting. Currently, it has employed 20 people.

Mr Oduor says members' deposits/savings are safe as they are held in a trust account under the NCBA Bank.

“As mentioned above, your cash is held in a trust account, which sits with NCBA. This means nobody can access the money except the chama members and officials,

“On the matter of control, when setting up your Chama, you get to select your officials who are allowed to approve transactions on the platform,” he adds.

“Your Chama also sets up its bank account to which the chama money can be withdrawn to. All this is visible to all Chama members on the platform.”

The company is looking at expanding to key markets like South Africa, Nigeria, Ethiopia, Uganda, and parts of West Africa.

He says that disruption caused by the Covid-19 curtailed their user base growth from 15,000 to 150,000 by the end of last year.

“Growth has been slow given the current pandemic scenario in Kenya and globally,” he says.

“People have less money in their pockets to run their chamas or investment groups, so this has had a major impact on Malipo Circles performance as they paused their activities.”

People, he notes, are also generally reluctant to give out loans at the moment since they have no reassurance if they will get paid back on time if at all within the current challenging economic environment created by Covid-19.

“We are very aware of the challenges everyone is facing today but still believe that Malipo Circles are still useful under these circumstances,” he states