Tanda, which turns your everyday neighborhood ‘duka’ into agents for basic financial services for their customers has recorded over 1 million transactions from its 8,000+ agents across Kenya and launched a COVID-19 package for MSMEs.
Tanda agents allow users to buy Airtime, pay water/electricity bill or withdraw/deposit money from over 100 saccos and banks and has served over 300,000 unique customers and processed over 1 Million transactions, and has offered a great way for shop owners to diversify their income.
Over and above its health and personal finance tips, Tanda is supporting Dukas through a mix of 3 new services now available on Tanda’s latest agent app.
In a statement, Geoffrey Mulei, Tanda’s CEO said, “While we are under no illusion that Covid-19 will impact mirco-retailers, the fact that they serve a key market which will continue to require access to their essential services during the coming months, inspires us to support them to place them in a strong position not only to meet the challenges ahead, but to capitalize on them. ”
The firm is helping MSMEs switch to cashless payments, offering affordable health insurance, and helping with bank and Sacco withdrawals.
1. Switching from Cash to digital payments
Much of Tanda has been built around the fact that Kenya remains a huge cash economy with FMCG dukas representing the largest proportion of cash payments in Kenya (69% of all cash payments), This is partly due to a large unbanked population and expensive mobile money fees.
However, during a pandemic physical money carries increased health risks, and thus has inadvertently created the perfect timing for one of our new products. Tanda now allows shop owners to collect mobile money payments in just 3 easy steps at no cost
2. Affordable Health insurance
A question on every shop owners mind is, who will cover hospital bills when they or their dependents are hospitalized? The reality is that many developing countries’ economies cannot sustain medical payments for its citizens at such a large scale, and most insurance policies will not cover Covid as most of them are not underwritten for this type of risk, despite IRA assuring policy holders that they will be covered.
“It is a general exclusion in the insurance policy and therefore Pacis would not undertake the hospital bills that come with the management of the infection,” said Mrs Jane Ngugi, Medical claims department, Pacis Insurance.
3. Bank/Sacco Withdrawals
Despite the risk of cash, experts predict a huge demand for withdrawals in residential areas (where dukas are based) due to restricted access to ATM’s and banking halls. Tanda has partnered with Interswitch , one of Africa’s largest payments aggregators and switching provider to allow customers of over 100 financial institutions to cash out at a Tanda agent through a new cardless withdrawals product.
Tanda is also training agents on the new functionality, whilst the operations teams are working closely with these institutions to educate their customers.
Late last year, HAVAIC invested into Nairobi based Dukapay Ltd (trading as Tanda) in advance of a syndicated seed round of investment to provide access to digital financial services and affordable agency banking for the underbanked population in Kenya and the rest of East Africa. With 3,500 ATM’s across Kenya for a population of 50 million, lack of access and expensive alternatives are the norm faced by a vast portion of the population that are incredibly sensitive to price.
Having been involved in distribution networks, digital financial services and duka (micro-retailer) networks, Geoff and Alex have an excellent understanding of what the market requires, and how to scale the business. They have been joined by an ex-Safaricom, M-Pesa and Kopo Kopo distribution senior manager to grow the reach of the network. Off the back of an angel funded pilot, Tanda successfully brought much needed financial services to over 350,000 Kenyan’s through 7,000 micro-retailers.
The Tanda platform allows for a micro-retailer to offer a wide range of digital services such as airtime, prepaid electricity, bill payments and other services to their customers. This is all done on existing smartphones of the micro-retailer. This has reduced cost of acquisition of new agents and reduced competition for counter space with normal terminal POS-type devices. Due to Tanda’s aggregated backend, the cost savings are shared by the micro-retailer and Tanda, thus empowering retailers with additional revenue streams and diversifying their product range at no cost.