Thursday, September 16, 2010

MaKwacha Loan Disbursements with Harmos Microfinance!

Hi, my name is Claudius Fundi. I am the project manager of the Harmos Micro-Enterprise Development Limited account.


Harmos Micro-Enterprise are a subsidiary of Vision Fund International a World Vision International owned micro finance organisation. They provide business loans to Small and Medium Scale Enterprises in Zambia.

In April this year Harmos Micro-Enterprise Development Limited and Mobile Transactions Zambia Limited signed a Memorandum of Understanding for the provision of electronic payment solutions to facilitate bulk loan disbursements to their unbanked and banked borrowers, and for the provision of a loan repayment module through the Mobile Transactions MaKwacha Agent network.

Pilot Project:

Since this was a new avenue that Mobile Transactions had ventured into and in accordance with the company’s 1-5-All policy (where we start with a localized pilot project and quickly expand to the whole project compass as implementation succeeds), we piloted with Lusaka Banked Disbursements in April this year. Within a month the project matured to banked disbursement to the whole country.

Unbanked Disbursements:

In August 2010 after a review of the project both parties agreed that the time was ripe to expand to unbanked payments, first for Lusaka and quickly expand to the rest of the country. These are mainly Group Loans of about 7 people in a group and an average amount of K1,000,000 ($200) each. Group Loans constitute 80% of Harmos loan disbursements.

The Lusaka implementation was launched on a shaky note on. The borrowers are mostly people who have never had a bank account in their lives and shared only one or two phones in the group. Harmos Credit Officers are at pains to hammer the new concept into the minds of their clients. The borrowers usually do not understand how their loans could get paid into a ‘mobile phone’.

When the initial beneficiaries went to collect their payments from the designated Champion Agent-Tresphord Mwango, in most cases it transpired that they had deleted the text messages that designated their users names. This made the activation of their MaKwacha accounts difficult and as such Tresphord had to refer them to the Mobile Transactions office for resolution of this problem. The other challenge was that once the beneficiaries received notifications of payments by phone text, all the groups would go at the same time to demand for payment from Tresphord’s. At one time this was up to 10 groups. Time is also not observed. Most times groups come late in the afternoon after 16:00 hours. In other cases we have had people turning up for payment upon receipt of text messages informing them of the creation of their MaKwacha accounts only but without payments being made to them yet.

The demand on Tresphord was overwhelming with the crowds of loan beneficiaries almost choking out the other customers sending and receiving money transfers. But Tresphord being the excellent manager that he is has managed this very well.

A total of 200 unbanked loans with the value of $40,000 have been paid through Mobile Transactions since and our capacity to cover them efficiently is increasing by the day. With the collaboration of Graham Lettner, our Agent Manager, and his team the process in Lusaka has improved with more agents taking on the payment of these beneficiaries.

Our target is cover Copperbelt unbanked disbursement in the next couple of weeks and there after quickly expand to Southern Province and then the rest of the country.



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