Here Is A Platform That Makes Chamas More Transparent

A sit-down with Erick Oyugi brings out a man on a mission to use technology to impact and change lives. Erick was a member of an investment club whose aim was to pool members’ funds for investments. Together with friends, they started the club to buy land as well as stocks in leading companies.

“Our biggest problem was on how to effectively collect money in a way that was transparent for all of us,” says Erick. And this problem led to the birth of the Malipo Circle app. It enables groups to come together and contribute towards a specific purpose.

Malipo App allows one to form a chama, come up with a peer-to-peer lending and borrowing circle among friends as well as a fund-raising groups for specific purposes such as wedding, medical, school fees, funerals. With the app, one can perform collections, disbursements, loans, record keeping, reports, marketplace, among others.

“Our innovation is a platform where a group of people with common financial interests can transparently transact with each other with the goal of achieving collective financial prosperity. It enables members to borrow from each other and from the collective pool,” he added. “It enables other institutions to plug into these financial groups and offer them services like insurance, discounts for their day to day purchases through our extensive application interfaces.”

The platform is not just for groups or individuals but companies too. The “collection circle” is for companies that want to register on Malipo Circles for VAT details, PIN numbers among others. “You can also choose if you want Malipo Circles primarily for collections or disbursements.”

So far, the platform has supported more than 600 chamas and overseen over 20 million transactions among 30,000 users. Currently, the platform has 15,000 users.

“The growth of our user base has been largely organic to date although we did do some advertising in the period just preceding the Covid-19 lockdown in Kenya which made us pause our marketing efforts to date,” he says.

A total of 2 million shillings was invested into the company while starting. Currently, it has employed 20 people. At the same time, members’ deposits/savings are safe as they are held in a trust account under the NCBA Bank.

“As mentioned above, your cash is held in a trust account, which sits with NCBA. This means nobody can access the money except the chama members and officials. On the matter of control, when setting up your Chama, you get to select your officials who are allowed to approve transactions on the platform,” he added.

The company is looking at expanding to key markets like South Africa, Nigeria, Ethiopia, Uganda, and parts of West Africa. He says that disruption caused by the Covid-19 curtailed their user base growth from 15,000 to 150,000 by the end of last year.

“Growth has been slow given the current pandemic scenario in Kenya and globally. People have less money in their pockets to run their chamas or investment groups, so this has had a major impact on Malipo Circles’ performance as they paused their activities,” Erick said.

People, he notes, are also generally reluctant to give out loans at the moment since they have no reassurance if they will get paid back on time if at all within the current challenging economic environment created by Covid-19.

“We are very aware of the challenges everyone is facing today but still believe that Malipo Circles are still useful under these circumstances,” he states

Read More: Benefits of Creating Fundraising Circles Using Malipo App