Tendai Mugovi, a co-founder of the Zimbabwean financial technology firm Cashliq, which provides banking-as-a-service solutions, has spoken about the company’s aspirations to support financial inclusion not only in Zimbabwe but also in other markets, such as Zambia.
Cashlinq’s financial inclusion
Speaking on the role that Cashlinq is playing in attempting to facilitate access to financial services, not only in Zimbabwe but also in other markets, Mugovi shared:
“I think in many of these markets; there are a lot of economic fundamentals that are not in place. This means that if core banking services are not available, then the main business of banking is also not available. In our markets, banks normally work by getting deposits, investing them in the market, giving out loans and getting interest from those.”
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“They also charge transaction fees. But in other countries like New Zealand, there are zero transaction fees, which is impossible in an economy like ours because the only avenue for banks to make money is to charge transaction fees which have become high as the cost of doing business goes up. That further demotivates people from getting into the financial system, to begin with.”
“So with our solution, knowing the fundamentals of the market and being very open in terms of our pricing modules, I think we offer relatively affordable services compared to what’s on the market. We are providing an opportunity for banks to include a lot of people who wouldn’t otherwise afford banking services. Also with our modules, banks can pick and choose what they want to pay for.”
“For example, a bank can pay for our remittance banking module and not an agent banking module. That flexibility saves them a lot because they don’t have to pay for services they are not going to use. It allows them to be more innovative to the realities of the market.”
The reach of Cashlinq
Cashlinq is currently available in Zimbabwe and Zambia, and they are working to bring it to Mozambique and Malawi as soon as possible. This is in fact due to the expansion of one of their Zambian customers who is present in those other nations as well. Regarding the size of Cashlinq’s client base, they now have four customers onboarded, one of which is one of Zimbabwe’s three telecommunications companies.
Additionally, Cashlinq has two banks that have come aboard. There is a neobank in Zambia, which is another institution with whom they are collaborating. In addition to this, Cashlinq has two pilot projects going on with one of the most well-known brands in Zimbabwe for a new wallet.
The inspiration
The three founders of Cashliq got the idea for the company while working as management consultants for one of the most successful consulting firms in the country. They had difficulties in coming up with a fantastic idea for a project, having that proposal approved by the board, and then having that idea fail to succeed during the implementation stage.
They were not implemented mostly due to the fact that the fundamental financial systems were either too expensive to use or the infrastructure did not actually support the project. Both of these factors contributed to the decision not to implement them.
They came to the conclusion that it was worthwhile to attempt to find a solution to the issue after observing it prevalent across the banking industry, not just at domestic but also at foreign financial institutions.
“We then came together to build a core banking platform from the ground up. In short, Cashlinq aims to provide African financial institutions with a flexible and affordable banking solution so that they address the unique opportunities and challenges in our continent,” Mugovi said.