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App turns your ordinary ‘duka’ into banking agent

By Christopher Owuor
Tuesday, October 27th, 2020
A shopkeeper shows how to load airtime for a customer using Tanda app. Photo/PD/Harriet James
In summary

Harriet James  @harriet86jim

Geoffrey Mulei, spent a bigger part of his childhood working at a shop and got a front row seat to challenges most shopkeepers face as they go on their daily activities trying to make ends meet.

Despite that, they are the cornerstone in many Kenyan neighbourhoods, their strategic location and trust built by long years of service, many of them today are locked out from becoming financial services agents because of expensive hardware requirements and excessively complicated joining procedures.

This is what led him to develop an app called Tanda in July 2018. 

“This problem drove me to develop a solution that enables a shopkeeper become a financial services agent for all major services with just their phone, no capital investment, in a simpler and faster way,” narrates the 23-year-old entrepreneur. 

Tanda is a fintech startup that turns your everyday neighborhood duka into agents for digital and financial services ranging from airtime, bill payments, cash deposits and withdrawals.

All the shopkeeper needs to do is simply download the app from the Google Playstore or dial *712# if they do not have a smartphone, and register for an account for free.

As soon as they are verified, which is usually within seconds, they can top up their account via Mpesa or at an Equity Bank, then they can begin vending all these services to their customers and earn a commission for each transaction.

Real market needs 

“The reception has been positive. A majority of shops we meet see this as a great way to diversify their income.

The uptake was slow in the first few months, but as soon as we had successful case studies, uptake radically increased.

That we do not charge any sign up fees has also been vital to increasing our prospects confidence,” Mulei explains.

Presently, they have over 10,000 agents spread across the country, have served over 190,000 unique customers and have processed over one million transactions to date.

The pandemic has also accelerated the uptake of both digital and financial services across their network compared to this same period last year. However, even with all these successes, Geoffrey faced a few challenges. 

“First, building this technology and aggregating services from multiple service providers and banks in a compliant way was quite expensive and time consuming.

Once we overcame that hurdle, recruiting agents is quite resource-heavy and has been our biggest challenge to date,” he explains.

Geoffrey adds that most startups fail because their solutions have not met a real market need as most of them don’t research on their market before starting. 

“Even tech giants such as Facebook and Google have graveyards littered with failed ideas.

But a good way to mitigate this is by doing a lot of research, constant reiteration and letting the target market guide the direction of your product,” he notes.

As a result of this creative innovation, Geoffrey and his team were recognised recently as ninth among Kenya’s top 100 most promising startups in Kenya 2020 by the Kenya National Innovation Agency.

Prior to Tanda, Geoffrey began his first company Inkisha in 2014, a supplier of low cost eco friendly packaging.

He had dropped out of Help University in Malaysia, where he was studying international business, to start the business which earned him major local and international awards including being named as one of the youngest top 40 under 40 entrepreneurs in the country in 2016. 

National Innovation Agency

“Getting such recognition is definitely very encouraging. The vote of confidence inspires me to work harder to develop solutions that solve everyday problems and revolutionise an industry,” he narrates.

To date, as a result of such awards, Geoffrey and his team have managed to raise investments from Kenyan, European and South African Investors to further accelerate their agent acquisition efforts.

In his brief experience of looking for funding and investments, Geoffrey has learnt that the best way to position oneself when looking to fundraise is by first aligning strongly with industry growth and market trends.

In addition, one needs to assemble an experienced and passionate team then getting some traction with as little resources as possible.

“Once you have these three factors in check along with the right documentation, you should be able to demonstrate your ability to scale to any investor,” he advises.

In the coming months, they plan to accelerate their agent acquisition drive with a strategic ambition to hit 100,000 agents in the next 36 months.

They also plan to run pilots in Uganda and Rwanda in quarter two and quarter three of 2021 followed by an aggressive rollout thereafter. 

“We are also actively onboarding new service providers, systematically working to position our agent network to acquire transactions for major bank and service provider in the region within the next 24 months,” he says.

They also plan to gradually roll out two new products this month. First, they have a loan product for their agents to finance their Tanda float and orders from suppliers.

With this, their agents will be able to take out loans of up to Sh50,000 to buy more, sell more and grow their business starting this month.

The second is a recent partnership with Jumia to use agents as pick up points, allowing their customers to collect their orders at any of agents nationwide.