Introducing FinTech4U’s first Cohort

Mareta Lindunda and Mali Kambandu

After a rigorous application process and interview process, the United Nations Capital Development Fund (UNCDF) and BongoHive Innovation and Technology Hub are pleased to announce the five Zambian FinTechs that will begin the FinTech4U Accelerator Programme in January 2020.

The companies selected for the first FinTech4U cohort have shown their potential to improve financial inclusion among under-served customers such as rural populations, youth and women. UNCDF and BongoHive partnered to launch FinTech4U to provide such companies with a range of skills and resources to further improve their businesses.

Of the 35 that submitted applications, 15 FinTechs attended interviews with a judging panel and five were selected to join the first cohort of FinTechs. The first cohort will receive funding – up to $3000 – to pilot and improve their product for the Zambian market and beyond. These entrepreneurs will also receive technical assistance and support from BongoHive, UNCDF and regulators such as Bank of Zambia, the Securities and Exchange Commission and Zambia Information Technology and Communication Authority through structured sessions until they graduate from the program in April.

A Snapshot of the first cohort

The first five fintechs are:

• SafePay Zambia offering a platform that protects subscribers through prepayment (savings) and pooling of resources (insurance) for access to good quality healthcare.
• Digital PayGo offering a shared platform for mobile merchant payment systems (QR code) and agent banking. The shared platform will provide shared agent banking and QR code solutions with an open API technology for faster integrations and other back end processing capabilities.
• Aretech offering a service called Bwino that gives clients access to medical schemes and credit for healthcare.
• EduPay offering a service that provides access to affordable, flexible and convenient credit known as Edu-Loans that are conveniently managed either from a mobile phone or computer.
• Virtual Space offering Mangwee Payments that is a safe and secure electronic wallet service, available in many parts of Zambia through a network of outlets and agents.

“We received an astounding number of applications and were blown away by the incredible work happening across the country,” said John Zgambo, FinTech4U Project Manager at BongoHive.

“The number and variety in the applications reaffirmed my belief that Africa is the new ground zero with innovation and technology. Zambian FinTechs are thinking of innovative ways to provide services and products which are able to address the needs of normally marginalised Zambians — rural population, women, youth e.t.c., and it’s very exciting,” said Kilyelani Kanjo, UNCDF Digital Financial Services Expert.

“As a start-up with huge ambitions, taking part in the accelerator programme presents a unique learning opportunity. The hands-on interaction and expert advice from the best in the industry will offer rare first-hand information that would help Digital PayGo fully launch in 2020. The Digital PayGo team is very excited to have been selected and looks forward to exchanging ideas that will drive a Digital Zambia,” said Esther Kanduza of Digital Paygo.

What services are FinTechs offering in Zambia?

Applications for the Accelerator Programme closed in November, with over 70 FinTechs seeking a place among the first cohort of five companies. Of the 70 that begun the application process, only 35 completed the rigorous process and could be considered for the shortlist. These applications covered sectors such as general finance, agriculture, energy, education, health and e-Commerce; product categories included payments and remittances, Business-2-Business (B2B), credit, personal finance management and savings.

Applicants for the programme came from all around Zambia, with the majority of submissions coming from Lusaka.

The application process revealed that the majority of FinTechs offer services in general finance, followed by agriculture, with education, health and energy in lesser numbers. These companies exhibit similar trends revealed in the Zambian economy in general, with fewer companies emerging to provide digital finance services in education, health and energy than services in general finance. However, as digital financial services become more widespread to rural populations in Zambia, this distribution of sectors is likely to change as the demand for services in these sectors increases and becomes more complex.

The applicants in general finance mostly offered products around payments and remittances (20 companies), business-to-business transactions and credit, which also mirrors a similar trend to what was exhibited in the Zambian DFS industry in 2018, where there was growth in the adoption and usage of second-generation products such as digital loans and Bank2Wallet transactions.

Why FinTech4U?

The FinTech4U Accelerator Programme was initiated in response to a series of challenges that fintechs and small-medium enterprises (SMEs) face when entering the market. These challenges vary from a lack of opportunity to test-pilot their innovations with a reputable partner to fine-tune their product for the market; to limited ability to connect and partner with more established DFS entities and providers; to limited ability to navigate the regulatory gaps to ensure their product can successfully hit the market, and a lack of understanding of the real challenges customers face thus producing products that are not aligned with market needs.

By working with these FinTechs, UNCDF and BongoHive aim to bring a more developed suite of digital financial products to the market and improve the services available to Zambian customers in urban and rural locations. Strengthening the five FinTechs in the Accelerator Programme will contribute to a stronger infrastructure to support the digital economy and improve the livelihoods and opportunities for Zambians.