App offering seamless fund pooling

Now more than ever, friends and family are looking for solutions that offer transparency and accountability for all financial transactions, something that has been an issue in most saving groups, such as chamas. Against this background, Erick Oyugi came up with Malipo Circles, a mobile service that lets people easily manage chama activities, lend, borrow, and fundraise money for a myriad of scenarios. “The idea was borne out of challenges I had with my friends a few years ago in our investment club. Our biggest problem was how to effectively collect money in a way that was transparent for all of us. We opened our chama bank account and had people meet to collect contributions or send money to the treasurer to deposit cash in the bank,” he says. However, Erick explains this did not work as it was not transparent. “Getting the financial statement was a lot of work because we had to go to the bank to get a statement on how far we had come in terms of our contribution. So, on the back of this messy situation, we asked ourselves what if there was a better way to do collections more effectively and efficiently, do the accounting and the summations, and then we transfer that money from such a platform to the bank? The money would still be in the bank, but we could then account for all transactions in a seamless and transparent manner via this platform without all signatories having to go to the bank in person to get the statements. This was the first phase of the idea that would end up becoming Malipo Circles,” he recalls. How it works The user can download the app on both Android and iPhone devices. They then proceed to register their details and login. You can perform several functions, including creating a chama, create a fundraising, peer to peer lending and borrowing circle among friends. The founder was keen on ensuring the process was as simple as possible. “Before even building the software, we had to understand the processes as we really didn’t want to change people’s behaviour when they already had a way of doing these things. We wanted to give them an effective way of doing what they were already used to doing – this was the core idea behind it,” he highlights. The fact that Malipo Circles experience is a way of building a value chain that can better support chamas and their goals. Their first partnership is with Old Mutual to provide a last expense insurance for Chama welfare. Problem solving Other than better contributions, accounting and ease and convenience in collection of money, Malipo Circles has also played a vital role in dealing with problems within the contribution circles “For instance, the loans between friends feature was based on the insight that every so often you may be broke and instead of calling every person one by one to loan you cash, we created a system where you can make a request to your friends on the app that is easy and fast. It’s cumbersome doing this sort of thing in the conventional manner, so Malipo Circles takes out the effort and stress of loans,” he says. He adds that the app has also been used as a salary advance tool for their employees. With it, employees don’t need to go to the HR department to ask for cash, they make request on the platform, with the benefit of no interest on the salary advance. “It also means the employer can chose whatever interest rate he wants to charge on the salary advance. We had our own ideas of the core problems we are solving, but the main use cases we are seeing are loans between friends, fundraising, recurrent collections for landlords,” says Erick. The app has been used by landlords to collect rent. It allows tenants to pay rent gradually throughout the month, but they have to pay the full amount due by the end of the month. The landlord does not have to manage accounting details on rental payments as Malipo Circles does that for him. The app has around 15,000 users. “Growth of our user base has been largely organic to-date although we did some advertising in the period just preceding Covid-19 lockdown, which made us pause our marketing efforts to-date,” he adds. However, the biggest challenge they have is the pandemic. Given that they were greatly affected by their ability to reach Chamas for engagements as most had paused contributions due to the uncertainty the pandemic brought. That didn’t stop them from achieving their goals. “The idea that the best way for a society to progress is to pull resources together, capital included, gives us great motivation to build systems and value chains that support groups that have already realised this. Our job is to enable them achieve those lofty ambitions. We look to have more than 300k Chamas turn to successful businesses within the next five years thanks to Malipo,” he says. They hope to continue building the processes and partnerships that spur growth of Chamas in the region. “Our main focus is to grow within Africa. We have a roadmap of features and functionalities we will be adding to Malipo Circles. We are really trying to solve this group issue of all things financial and are looking at key markets like South Africa, Nigeria, Ethiopia, Uganda, and parts of West Africa,” he says.

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