In a transaction that would allow it to quickly boost the expansion and profitability of SACCOs in Kenya, Kenyan FinTech firm Kwara has agreed to fully acquire IRNET Coop Kenya, a software business that is a subsidiary of the Kenya Union of Savings and Credit Cooperatives (KUSCC).
Kwara, a company founded in 2018 by Cynthia Wandia and David Hwan, has developed a digital banking platform to assist underbanked and unbanked people in seamlessly accumulating wealth. It provides a management platform to boost productivity and automation at the level of cooperative personnel, as well as alternative channels and a mobile banking app in the neobank style for end users.
The multi-accelerated startup secured a US $4 million seed investment round in December 2021 and has since partnered with KUSCCO, the organisation that represents over 4,000 SACCOs in Kenya.
The alliance intends to overcome the fundamental issues that SACCOs are now experiencing, such as expensive digitisation, security concerns, and the digital divide between SACCOs and their increasingly young and tech-savvy membership, by mobilising deposits and acquiring members digitally.
“This development marks a game changer in the management of SACCOs going forward,” said George Ototo, group managing director of KUSCCO.
“The acquisition of IRNET and the KUSCCO-Kwara partnership will deliver to our thousands of SACCO members a tested and proven, secure and efficient cloud-based core banking platform as well as modern mobile banking channels. Since its launch in 2019, over 120 SACCOs have embraced the stable and secure Kwara Core Banking software as well as full digital banking channels, including mobile, USSD, agency banking, ATM, and international remittance. We are excited about the synergy and bundling of the Kwara and IRNET teams’ capabilities that will create a long-lasting relationship to benefit and grow the entire SACCO sector in Kenya.”
Wandia claimed that during the last four years, Kwara has collaborated extensively with KUSCCO to strengthen the SACCO industry in Kenya.
“Our clients have grown their deposits and loan books twice as fast as they did before switching to Kwara. We are now grateful for the opportunity to avail those benefits to SACCOs across the entire country. This partnership through acquisition enables us to place fully digital and secure technology in the hands of all SACCO members in the fastest possible time, backed by the most established SACCO partner in Kenya,” she said.
To guarantee a smooth transition and to integrate the whole regional network and marketing know-how of KUSCCO into Kwara, the full IRNET team will collaborate with Kwara.
“IRNET is delighted to bring its cybersecurity and project assurance experience as well as trusted SACCO relationships into Kwara. This aligns with the goal to accelerate digitisation of SACCOs at this opportune time when SACCOs are poised to play a pivotal role in expanding the Kenyan economy through micro, small and medium enterprises. This evolution will also make our SACCOs more compliant with SASRA digitisation and governance requirements,” said Patricia Mathiu, CEO of IRNET.
The cooperation will shortly be introduced by KUSCCO, Kwara, and IRNET at an occasion in Nairobi, followed by regional introductions all throughout the nation. Within the following six months, the parties want to quickly integrate the whole SACCO community onto the Kwara platform.