While Delilah Kidanu grew up in Nairobi, Kenya, mobile money platform M-Pesa was the go-to fintech platform for her and most Kenyans.
The Safaricom-owned product provides basic access to financial services like sending and receiving money and purchasing airtime. Yet, some Kenyans still lack other digital financial services from savings to investments.
Last year, people in the country saved up to $13 billion, and more than 70% of them used informal saving groups and cooperatives to do this.
Based on her experience, Kidanu teamed up with Alexis Roman and Bubunyo Nyavor last year to start Koa to help Kenyans save and invest their money better. She is the COO of the company, while Roman and Nyavor act as the CEO and CTO, respectively.
Koa is one of 20 companies competing for $100,000 and the Disrupt cup in this week’s TechCrunch Disrupt Startup Battlefield competition.
In an interview with TechCrunch, Roman said when the team began market research to understand how Kenyans saved, they were intrigued to discover that many people were dissatisfied with the current traditional saving options.
Apart from being offline models, savings with microfinance banks, cooperatives and informal saving groups have manual, expensive and opaque processes.
“It was shocking that when we spoke to people, and they told us their experience in their cooperatives and savings groups, we wondered why they aren’t better alternatives,” Roman said. “People often use access as a keyword when describing the problem behind how financial services are used. But for us, we think access is not the problem; it is how easy or efficient it is to access the service. It was this obvious observation that made us start Koa.”
Digitally, some banks offer savings products to Kenyans. But Koa still sees an opportunity because banks are generally a less popular savings destination for an average Kenyan evident in the aforementioned stats.
The founders are banking that it will be different with Koa. Its first product is a savings app that allows consumers to deposit, save and earn interest on their money. When users log into the app, they can begin to create savings goals in different pockets, a replica of what exists offline — where they would normally save across different informal savings groups for various reasons.
But despite this huge opportunity, Koa has had to battle with two challenges.First, infrastructure, which is a necessity for the company so it can take deposits. In Kenya, a fintech startup would typically need […]