Microfinance Africa Interview with Kopo Kopo

“Sulay, the Hope Micro MIS Administrator, tests Splash Mobile Money” (image provided by Kopo Kopo)

Kopo Kopo recently announced the launch of Mobile Microfinance in Sierra Leone in partnership with Hope Micro and Splash Mobile Money, utilizing its mobile money aggregation platform. The platform enables Microfinance institutions to integrate multiple mobile money systems.

Microfinance Africa interviewed Ben Lyon, VP of Business Development to find out more about the Company and its services

Q:  Please tell us a little more about Kopo Kopo and how the idea came about.

The name Kopo Kopo comes from a mix of ‘kobboh kobboh’ and ‘mkopo’, the Krio phrase for money and the Kiswahili word for loan respectively.  Our founding team, Dylan, Tom, and I, came up with the idea for Kopo Kopo as the result of some work in Sierra Leone, where we realized that no one is systemically tackling the integration problems associated with merging mobile money and microfinance.

Along with the above, we were always shocked by the high costs of microfinance (e.g. the global average interest rate is around 35%) and wanted to help make the industry more efficient by streamlining front- and back-office processes.

Our answer to these challenges was Kopo Kopo, a software-as-a-service (SaaS) platform that allows microfinance institutions to integrate their corporate mobile money accounts with their management information system (MIS) on a pay-as-you-go basis.  The reason we chose SaaS and a pay-as-you-go business model was to help push our service down market such that small microfinance institutions can afford it.  Fundamentally, we see the integration of microfinance and mobile money as the next big step, and believe that institutions large and small should be able to participate in the mobile financial revolution.

Q:  The service is the provision of mobile money aggregation. Please give us more detail on how the service works and the benefits for mobile money providers.

We offer a two-pronged service that allows microfinance institutions to 1) aggregate transactions from multiple corporate mobile money accounts, and 2) setup a direct interface between Kopo Kopo and their MIS.  Our intent is to create a seamless interface such that a customer can repay a loan via, say, Safaricom M-Pesa, have that loan mapped to their customer account, and then have that transaction pushed to the MIS so their customer account is automatically updated.

As a systems aggregator and integrator, we have a unique position with regard to mobile money and MIS providers.  Our value proposition to both is straightforward: Kopo Kopo takes care of relationship management and integration and increases the accessibility, utility, and uptake of their products.

Q:  Your first foray into Africa was in Sierra Leone. Sierra Leone is not one of the countries that immediately comes to mind when the subject of mobile financial services in Africa is mentioned, so why Sierra Leone?

Our strategic focus is East Africa, where mobile money uptake is most significant, but we had all the relationships in place in Sierra Leone to deliver our service quickly, so we decided to deploy there first.  As you suggest, the mobile money ecosystem in Sierra Leone is nascent.  Nevertheless, we saw it as an opportunity to test our service in a challenging environment and, more importantly, help the mobile money ecosystem grow.

Q:  How has the service been received in Sierra Leone?

Our service has been well-received by both our partner, Hope Micro, and the customers they serve.  To quote SD Kanu, the Executive Director of Hope Micro, Kopo Kopo “should make the back-office much, much simpler”.  Customer feedback has also been encouraging.  For example, one customer said “Paying with Splash is more easy, more convenient, and less burdensome than paying at the office”.

Despite the positive feedback, however, Hope Micro now has the difficult task of scaling the service to its 16,000 customers.  Because the mobile money ecosystem is so nascent, including a relatively sparse mobile money agent network, the real challenge will be selling the value proposition to customers, managing expectations, and ensuring that everyone has a positive end-to-end experience.

Q:  Emerging economies with large population of unbanked are seen as the best places for growth of mobile money services.  Kenya is ahead of every other nation in Africa, possibly the world.  Is Africa your key target or are you also planning to target other possible large mobile money market areas such as India?

Our headquarters is in Nairobi, Kenya – the epicenter of the mobile money revolution.  We chose Kenya because we intend to serve East Africa in the near term and, ultimately, serve all of Sub-Saharan Africa.  Although there is ample opportunity in markets like China and India, our hearts and ambitions are in Africa.

Q:  There are increasing numbers of mobile money providers in Africa. Many of these have similar technology and business model. What are your thoughts on the current mobile money landscape in Africa and how do you think it will develop in the medium term.

The mobile money landscape in East Africa is extremely competitive.  Outside of East Africa, however, the situation is quite different.  In most countries in Sub-Saharan Africa, for example, I could count the number of companies in this space on one hand.

Ultimately, we see competition as good and necessary for several reasons.  First, it validates our market offering by showing there is significant demand to merit increased supply.  More importantly, however, it forces all the players involved to provide the best services at the best prices possible, which is a net good for both financial institutions and the customers they serve.

Kopo Kopo helps bring Mobile Microfinance to Sierra Leone

Kopo Kopo Press Release

Hope Micro Microfinance Customers Can Repay Their Loans with Splash Mobile Money

FREETOWN, SIERRA LEONE -  Kopo Kopo, a software company that operates a services platform connecting mobile money to microfinance institutions, has partnered with Hope Micro and Splash Mobile Money to bring mobile financial services to the country.

Hope Micro customers will now be able to repay their loans via Splash Mobile Money, a service that allows users on the top three mobile networks to load cash onto their phones, send money, pay bills, withdraw cash, and buy goods. As a result, Hope Micro customers no longer need to close their shops and travel across town in order to pay loan installments.

According to SD Kanu, the Executive Director of Hope Micro, “making payments at our office takes the client away from their business. We partnered with Splash and Kopo Kopo in order to make our services as convenient as possible and put more money into the pockets of our customers.”

“We are excited that Hope Micro has selected our service to help them integrate their business processes with the Splash Mobile Money system,” said Kopo Kopo CEO Dylan Higgins. “All along the way, Hope Micro and Splash Mobile Money have shown they are committed to using innovation to help improve their customers’ lives.”

Hope Micro plans to scale the service in order to offer both loan disbursement and repayment via Splash Mobile Money to all of its 16,000 customers. Hope Micro is the first microfinance institution in Sierra Leone and one of the first in West Africa to offer mobile financial services.

About Kopo Kopo

Kopo Kopo, a US-based organization, is committed to making the cost of integrating microfinance and mobile money as affordable as possible. Kopo Kopo offers a software-as-a-service platform that enables microfinance institutions to integrate one or multiple mobile money systems with their core banking software on a pay-as-you-go basis. Kopo Kopo is marketing its solution to microfinance institutions throughout Sub-Saharan Africa and is opening an office in Nairobi, Kenya.

About Hope Micro

Hope Micro was incorporated in 2002 as a not-for-profit microfinance institution. A wholly-owned subsidiary of World Hope International, Hope Micro takes a “pro-poor” approach to microfinance withits mission to provide financial services for the poor in a manner that is sustainable, readily accessible, and responsive to their needs. Hope Micro is one of the largest microfinance institutions in Sierra Leone.

About Splash Mobile Money

Splash Mobile Money launched its pilot operation in Sierra Leone in September 2009 and began its national rollout in February 2010. To date, Splash has over 60,000 users throughout the country. Splash is the first and only homegrown mobile banking service in Sierra Leone and operates on the Airtel, Africell, and Comium networks. Splash operates nationally from its head office in Freetown and has a growing network of over 75 agents country-wide.