A money-lending online platform launched in Kenya last month has attracted 3,000 loanees and 22,000 mobile app downloads.
Ubapesa, founded by George Wasike, Gordon Ochieng, Ronald Mutuku and an anonymous funder, has been offering online short-term loans mainly to civil servants and owners of small businesses, who require urgent cash to meet immediate needs.
Mr Wasike, who is the Ubapesa chief executive, says they discovered a major opportunity for Kenyan depositors to lend money on a reliable platform.
“Our work is to hook up a lender to a borrower on the platform. Our commission will be earned when repayments are made,” he said.
Ubapesa, which went live on Google Playstore on March 10, offers its clientele 10-day, 20-day and 30-day loans ranging from Sh500 to Sh7,000.
Mr Wasike, who studied a Bachelor of Arts degree at Kenyatta University says clients will have an opportunity to build their credit history with them as they service the loans. Borrowers will enjoy higher loans at low interest rates when they garner favourable ratings.
“We require one to register with us using their mobile number (solely safaricom) where we check an individual’s credit score with the Credit Reference Bureau to determine their worth,” he says.
His major breakthrough came when he met Mr Mutuku, a Jomo Kenyatta University of Science, Agriculture and technology(JKUAT) IT graduate. Mr Mutuku then working at Craft Silicon.
Together they launch their first product Gotta App, an airtime buying service for all mobile operators in Kenya that has been in the market for two and a half years.
Mr Wasike worked at Safaricom as a business solutions architect before moving to Airtel as a corporates product manager.
A trained teacher, Mr Wasike shunned the classroom for the tech world using self-taught online modules that earned him his first job at Lantech.
To fund their operations while keeping loans affordable, Ubapesa charges a facilitation fee for every loan they give out.
“Lenders on the platform specify who they would wish to loan money to and we match them to borrowers. A 10-day loan attracts an eight per cent interest charge, 20-day (9per cent) and 30-day loan attract a 10 per cent interest,” he says.
Mr Mutuku adds that they had piloted the product among friends and relatives.
Mr Wasike says they will continue studying the market as they expand coverage to the rest of the country.
“Yes, the competition on lending is rife but many firms relied on foreign funders which made their loans very costly. We have a pool of local investors that have given us financial backing worth Sh45 million as startup capital,” he says.
Mr Mutuku notes that they would soon introduce other services for their app to include payment portal for goods and services.