Smobilpay, Daily Collection, and the Future of Microfinance in Africa
By: Buma Wamo
Tags: Financial Services, Financial Inclusion, Africa, Technology, Microfinance

The collapse of COFINEST and other big Microfinance Institutions (MFIs) in Cameroon, with major stakeholders arrested for mismanagement and malpractices in the market, tainted customers and members’ confidence. This sparked fear amongst depositors and non-depositors who rushed into other microfinance institutions to withdraw their deposits. Members had lost confidence in the MFI sector.

To this effect, COBAC sensitized promoters of MFIs in Cameroon on the need for digitization so the sector does not become an all comer’s pursuit.

In an effort to re-establish customers’ and members’ trust, ATMs and Cash dispensing gained ground within MFIs, through growing partnerships between commercial banks and MFIs in Cameroon.

The distribution of electronic cards is becoming increasingly noticeable amongst MFIs. Amazingly, this solves the problem with cash withdrawals and queue-ups but not the major challenges faced by microfinance, their customers, and members dealing with daily collections which still stands as the backbone of most MFIs in Cameroon.

What is a daily collection?

Daily collections are one of the oldest financial services in Africa. In Cameroon, these are trustworthy people MFIs recruit who visit clients on a regular basis (often daily), collecting small deposits, creating savings accounts, and reporting accumulated savings to the MFI at the end of each day. Unfortunately, this sector of financial service in Cameroon is plagued by multiple challenges and weaknesses.

Major challenges MFIs, customers, and members face with daily collection

Unauthorized Lending

Daily collectors lend collected money illegally to non-registered customers. The drive for these quick profits results in poor screening and default.

Inefficiencies in Operations

There also exist many inefficiencies in operations. An extremely high possibility of errors stems from manual entries with cumbersome manual double entry of data on the field and in the office with a lot of time and effort taken for reconciliation.

Absence of real-time reports

MFIs generally suffer from no real-time reporting and traceability of data and transactions. In most of these MFIs, their main office staff have no visibility of the field officers’ activities. Information reported by field officers can’t be verified and field officers can easily modify information, leading to fraud. This massively decreases customer confidence.

What is the Ice breaker?

The most innovative fintech company in Cameroon — Maviance Cameroon which has deployed its payment platform (Smobilpay) in Cameroon since 2013 — has been working with over 100 MFIs for the last 6 years. These MFIs have been using Smobilpay to offer value-added digital services to their customers.

Maviance boasts of having first-hand knowledge of the difficulties faced by these MFIs in their core sector of daily collections. As a key player in the fintech space, Maviance (which is a certified GIMAC/BEAC partner) has, therefore, combined its market experience with its trusted technological platform to offer the unique win-win solution to this challenge by developing and deploying the “Smobilpay for Daily Collection” module.

Introducing Smobilpay for Daily Collection

Smobilpay for Daily Collection is an extension of the Smobilpay application. It is designed for use by MFIs aimed at solving the unique problem with the management of daily collection and to remotely monitor field officers’ (daily collectors’) activities in real-time. It also eliminates double entry of data, provides real-time reconciliation of data, and has extensive reporting capabilities.

Smobilpay for Daily Collection provides a value-added service to MFIs through the daily collection that helps them manage fraud risk, reduce collection costs, and automate their reporting. This solution is deployed on a POS (Point of Sale) device — smartphone and mobile printer — used by daily collectors to enter the deposit of their customers.

The POS prints a receipt for the customer and transmits the information instantly to the branch office for real-time reconciliation. With security in mind, connectivity is provided through the Internet over a secured server.

The launch of this solution has already witnessed a huge success, according to the company. “We’re seeing the broad acceptance of the use of this new technology in providing financial services, even at the lowest level of consumer income,” Dr Ibrahim Njimona, Director of partner relations at Maviance, said.

Most importantly, MFIs using Smobilpay for their daily collections are also experiencing a real strategic and financial interest in servicing the low-end part of the market. “This has led to cheaper, safer and eventually richer service offerings to their customers. We look forward to seeing how quickly other MFIs start following this lead by using Smobilpay for daily collection,” Dr Ibrahim Njimona concluded.

Benefits for daily collectors

MFIs using the Smobilpay solution have delighted to see that their collection staff found the device very easy to use and has increased efficiency in operations, as field officers equipped with Android phones and a mobile printer, now digitally perform field operations with fewer manual steps. And in the process, eliminating double entry, reducing the rate of lost documents, fewer errors, increased traceability, and printed electronic receipts. To say the least, these MFIs have witnessed restored consumer confidence in a sector that has so far been plagued by the lack of transparency and a high rate of fraud.

Benefits to the Microfinance back office

The automated system also helps MFIs manage fraud risks, which has always been a problem with manual cash collecting systems. This has given room for improved management capabilities since managers are able to remotely monitor field officers’ activities in real-time, have extensive reporting of performance information on branches, employees and customers. Furthermore, agent performance can be easily analyzed, thereby boosting general performance and revenue.

Benefits to the Consumers

Customers are also happy to see the new device in action. It gives them confidence in the system when they see immediate balance reports that harmonize with their expectations, get SMS notifications, reminders, and receipts that build trust.

This mobile solution helps Smobilpay become a true “one-stop-shop” for Cameroon and Africa, providing utility bill payment, as well as the collection tools for Microfinance Institutions.