Investment groups popularly referred to locally as ‘Chamas’ are very common in Kenya. Over the years, Chama’s have evolved from the traditional women groups where women saved and borrowed funds for household utensils to formal groups that have acquired millions of shillings worth of assets. To capture this growing Chama market, a Kenyan technology company has developed a web application that enables investment groups to automate their financial records and systems.
TechMoran spoke to Martin Njuguna, Founder and CEO of Digital Vision EA about their new product, Chamasoft.
What is Digital Vision East Africa and what does it do?
Digital Vision EA is Web Development Company. I founded it in 2005 immediately after university. We have been developing websites for companies and individuals across Eastern Africa. For a long time we have wanted to develop our own software and we have managed to do just that. We will be launching our first product Chamasoft later this month at the Demo Africa conference in Nairobi, Kenya.
What was the inspiration behind it?
When I started the business it was desire to develop products which address local challenges. But because we needed money and the market was demanding services such as web design we focused on that for a number of years. I belong to a Chama myself and we have been having challenges ranging from communication, records and financial management. I saw a need in the market and so we began building chamasoft.
Most chama’s are informal in that they don’t have offices or a secretariat to handle record keeping and communication. Chamasoft fills these gaps. Chamasoft enables groups, to monitor collection and investment of funds and track group income and expenditure. It also improves transparency. The software has a dashboard where group members can view their group statements, how much they contributed throughout their chama lifetime, penalties contributed and all other financials pertaining to the members and group. Over the last few months we have had very impressive sign-ups confirming that indeed there is a market opportunity for this product.
How can one use Chamasoft?
All you have to do is go to the chamasoft website and sign up your group. You will then be able to invite your group members.Invited members will received SMS and email notifications. You can then personalize your chamasoft account to indicate how often your group meets, upload your current financial records and state rules for penalties and loan application files. After that chamasoft updates everything for you and stores the records. Members will get reminders on their due payments and reminders about meetings. It means distance now is no longer a problem. Even chama members in different towns across the country or in the Diaspora can actively participate in their groups and know what is happening. The service is available for as low as Ksh100 (US$1.2) per user per month. An advanced package that has more features is available for Ksh.250 (US$2.9) per user per month.
What impact do you expect this software will have?
In Kenya we have a rich entrepreneurial culture. But, the cost of money is very high. So, Kenyans being whom they are, entrepreneurial to the core, they like to join up and form groups through which they save and invest in things like land or shares. We believe that Chamasoft will help these groups become more organized. That way financial institutions will be able to access their records online and give them better loan facilities. Secondly, being a transparent group, the rate of failure will be lower. We know groups that have started small and have done great things.
A good example is the Nairobi Securities Exchange listed Transcentury Limited Group which was founded by a group of 29. I would like to believe that they had very good records and proper communication. We are also giving Chama’s information through our blog http://chamasoft.com/chamablog/ about resources ranging from loans to advisory. We believe access to more information about investing as a group will help Chama’s be more effective.
How many users do you have so far?
We opened our site for registration on the 1st of September and the uptake has been really good. I would prefer not to disclose any figures just yet but we are very happy with the uptake. Most notable is that we are getting very good feedback from Chama’s that are using the software.
You are one of the entrepreneurs who will be launching products and services at the Demo Africa conference in Nairobi later in the month. How do you feel about that?
We are honoured to be going to Demo Africa. At the same time it is a very big challenge for us because there will be 39 other companies launching. There will be investors at the conference and so we are looking forward to doing our best. We are very excited.
What challenges have you faced?
We haven’t raised any capital at all. We have been using the company’s reserves. We have been using our own money. So we have to keep on juggling between doing client projects and also developing Chamasoft. That is why it has taken us along time to bring the product to the market.
Are there competitors in the market? How are you differentiating yourself?
Chamas can decide to continue using manual records. That to me is the biggest competition for us. Our value add is to make sure that we provide a simple tool and at the same time automate Chama requirements and processes.
What are your future plans?
We want to continue improving Chamasoft and create more linkages with banks, insurance companies and investment advisory firms so that we can have a one stop shop. We are also working on a mobile phone platform. I believe the sky is the limit. All we need to do is stay focused to our users and continue improving the product.