a fintech innovation
Bank over one hundred million unbanked in less than ten years.
80% of people in Africa are still unbanked. The passion to change life for the millions unbanked of Africa.
A state of the art
Provide safe, accessible and affordable financial services for everyone
The Why, How and What
The uniqueness of Okapi platform is its capacity to move funds from a sender to a receiver, both domestic and international, in real-time at low cost using card technology. This makes the platform flexible, portable and scalable.
The uniqueness of OKAPI
Okapi, a better Swish
Similar to SWISH but for both banked and unbanked. The user does not need a bank account
It is extremely scalable: Okapi can be deployed and used anywhere in many countries without a prior set up to connect to all the banks involved.
This should have taken more than 5 years! - The platform
- Robust cloud based fintech platform that took 22 059 man days to develop before the launch.
- The platform is on IOS, Android and web
- It has a front-end interface for end users and a super admin back-end for configuration of users, automated processes and system monitoring.
- It is connected to Visa payment system and is using card technology.
- It is compliant against KYC and AML international standards.
- Transactions are executed through Visanet using VISA backend.This implies; security in the transactions, simplicity of doing both domestic and international transactions, portability and cost efficiency.
- All transactions are real time.
- Customers do not need a bank account or a Visa card
- It is secure, scalable and transparent.
This should have taken more than 5 years!
- The Security and Compliance
- The platform is connected to Visa payment system and is using card technology
- The platform is compliant against KYC (Know Your Customer) and AML (Anti Money Laundering) international standards.
- All customers undergo KYC screening not only at registration but also on daily basis.
- All transactions are checked through the AML screening system as OKAPI does not want to fund war, money laundering or terrorism.
- The platform is secure and certified against PCIDSS (Payment card industry data security standard)
This should have taken more than 5 years!
- The partnership with Banks
- Okapi needs a Visa Bin ((Visa bank identification number) to operate because of it is connected to Visa.
- The Visa Bin is sponsored by the partner Bank.
- There is no direct integration between Okapi and the partner bank .
- The link is set by Visa using the Visa Bin.
- The settlement of the Okapi transactions are done by the bank as their normal Visa transactions settlement.
- The physical money is held in a trust account hosted at the partner Bank.
- Partnership with a bank in a country implies that Okapi works under the bank’s license. The partnership with a bank in each country of operation makes the Okapi concept scalable as it eliminates, in most of the countries, the cost and time to apply for a license.
- Okapi has partnership with several Pan-African banks , GTBank, Sterling, Stanbic and Ecobank, Africa's largest present in 36 countries.
Okapi platform took 5 years to develop and evolve
Start of development of Okapi platform
One year pilot in Kibera, a slum area in Nairobi, with Quickpay transactions (small transactions)
Pilot in Kenya
Okapi concept was tested in a production environment. Money was moved for the first time from a card to another card
Proof of Concept with Visa
EU money transfer license
Launch in Botswana
Expansion outside the pilot area
The purpose of this license is first to increase our credibility and second to capitalize on the cross-border transactions between Europe and Africa
Learnings from the pilot:
Customer acquisition has to be top down and creating an incentive to all parties involved is key.
The value of interoperability
Makes it possible for us to use other
players’ infrastructure – The agent networks
Potential of becoming the pan-African financial actor that is connecting financial services in a seamless network over the continent.
Currently integrated with Mpesa, Paga,
Visa and Eclectics.
Payment of bills and invoices. The receiver gets funds in real-time which saves administration costs.
The receiver is charged 1% which is less than the cost of handling cash. The service is free for the end customers.
Private customers can send money to each other in real time from Okapi wallet to Okapi wallet, from Okapi wallet to Visa card or Mpesa and Vice versa.
Transactions from Okapi wallet to Okapi wallet is free up to 5 transactions per day. Transactions from Okapi to Visa or Mpesa and vice versa are charged a fee of 1%. Deposit is free. Withdrawal is charged a fee in relation to the amount.
ACCESS TO INSURANCE
Customers can pay their insurance premium, send claims and receive paid claims. Insurance companies: can create tailor made products, manage customers and products. Can reduce their administration by 70-90%. Insurance companies are charged 3% of transferred funds.
Week loans to merchants organized in cooperatives to accelerate merchant and customer acquisition as well as transactions. To access the week loans merchants have to get their customers to pay for goods and services using Okapi. A fee of 4,97% per week is charged to the merchant.
Corporate customers can disburse funds such as salaries, loans, etc. to employees, clients, other corporates. The fee is negotiated with the corporate customers.
The services and the revenue model
ACCESS TO SAVINGS AND LOANS
Access to savings and loans in partnership with banks or other financial institutions. The fee is negotiated with the banks/financial institutions.
The volume of transactions is still small but the development since November 2018, when we started the expansion of the services outside the pilot area, shows that we are on the path of exponential growth. Transactions are growing and our focus is to make this growth climb sharply in coming months. QuickPay are small transactions and not included in the transaction statistics.
Distribution of costs
Funds transferred (%)
- Fee paid to the Bank partner 18
- Admin and other processing costs 5,8
- Other transaction costs 10
- Taxes: 5,9
Funds transferred and proceeds
Out of every 100 USD collected fee, 40 are costs and 60 net proceeds.
Visa to agent
Visa to Okapi
VALUE FOR MERCHANTS
Focus and strategy to penetrate the Market
Use week loans as a catalyst to accelerate growth.
Reaching the unbanked (merchants and their end customers are unbanked)
More customers (merchants and their end customers)
Efficient way to penetrate the market using a win-win strategy, merchants grow, we grow
organized in cooperatives
Improve cash flow
Security through cashless transactions
The market penetration strategy is working
Group name: Mashinani
Period : Jan-Apr 2019
Number of active members: 16
Number of week loans: 122 loans totaling to 22 k USD
Generated transactions of 61 k USD
Number of defaulters: 0
Okapi's revolving capital: 2,5k USD
Okapi's earnings 1,65 k USD
A capital of 2500 USD has resulted in 122 week loans generating transactions for 61 000 USD and a corresponding revenue of 1650 USD in 4 months.
This translates in to doubling of the capital every 6 months.
44 million SMEs
Acquire 300 groups of 25 members, on average, in one year by providing access to the Okapi platform and offering week loans of 70 USD on average. 4000 groups to be acquired in 5 years.
7% of African population is member in cooperatives.
Kenya has 14 k cooperatives which are major drivers of the economy mobilizing together savings of about 4 billion USD, equals to 33% of the national savings. The cooperatives are common in entire Africa.
Botswana has 50 k groups.
Offering the Okapi platform to the traders will solve the issue of cross-border payments. Working with merchants and cooperatives will set the ground for us to capture the cross-border market.
No pan-African solution for cross border transactions. Existing solutions are country based and not connected to each other. There are 44 million SMEs in Africa. A large number of them do cross border trade. Cross border trade represents 1,45 trillion USD per year which is 43% of Africa's annual income.
Offering the Okapi platform to corporates to help them collect payments and disburse funds efficiently and help them to extend their market reach. Okapi has an agreement with APA in Kenya (1 M customers) and Phoenix in Botswana (10 K customers). The successful cooperation with these 2 companies will lay the ground for a wider cooperation with corporates over Africa.
Corporates in Africa have difficulties to collect payments and disburse funds because of the large number of unbanked population which is around 80%. The insurance sector is an example of this.The insurance penetration in the entire Africa is only 2%.
Market places are the right grounds to recruit merchants and cooperatives.
The Okapi sales force
A recruiter will typically recruit and train 4 cooperatives per month.
Cooperative managers monitor cooperative members (merchants) and provide them with support.
A cooperative manager can monitor 5 cooperatives.
There is one team leader for every team of 10 recruiters and cooperative managers.
New recruits are trained by experienced team members – 2 new recruits are attached to an experienced team member for one month.
The workforce will grow from the 7 people today to 79 people in one year down the line.
Cost of sales personnel will grow to 198K SEK while sales revenues grow to 470K SEK.
Recruitment of groups and resources needed
Competition in Africa
Okapi versus MPESA
Fredric Amuok, 45
A banked customer from Botswana stranded in China
" I was stranded earlier with no money and thought of calling home to get someone to deposit money into my account. Then I remembered Okapi, managed to do Okapi to Visa and withdrew money"
An unbanked customer in Kenya
" Okapi is a solution for the unbanked because it is not a telephone network, it is easy to use from the smartphones, people can deposit and withdraw. It is also cheaper in withdrawals and swap than these others, it can be used at sales centers as shops, butcheries provided that these are feed in the platform"
- Convenience: Okapi is easy to use as it has a convenient and user friendly interface.
- Affordability: Okapi is cheaper than Mpesa.
- Portability: Okapi is a fintech platform and not a telco solution as Mpesa. Mpesa is depended on and bound to a telecom operator.
- Scalability: Okapi is scalable and can be used in many countries. Despite the fact that Mpesa is the largest mobile money solution in Africa, with its 25 M customers in Kenya, its customers cannot use it outside Kenya’s borders.
- Compliance: Okapi is KYC and AML compliant as per international standards.
Web, IOS and Android. 10 people in Sweden and 15 in Pakistan
2 administrators, 3 people in social media and marketing
1 compliance officer and 1 financial controller
Financial and compliance
30 people. This team has been increased recently with 20 people
in both Kenya and Botswana to work with the recruitment of
merchants and cooperatives
Sales and operations
Legal firms, accountants and designers and brand ambassadors
35.2% (453 million Internet users in Africa in Dec 2017 – 10% of the World users)
419 million mobile internet connections in Africa in 2017 to reach 1.07 billion by the end of 2022.
Mobile Internet penetration
Currently 293.8 million smartphones across the continent and expected to reach 929.9 million by 2021.
177 million Facebook users in Africa in Dec 2017
TRENDS IN FAVOR OF THE USE OF
OKAPI IN AFRICA
Social media penetration
Aggregated Cash flow
- Same focus as in other markets: the cooperative business groups
- Strategy: week-loans
- However, contract with APA, a major insurance company which will recommend its customers to use Okapi as a payment gateway
- Projections based on actual performance
- Same focus as in other markets: the cooperative business groups
- Strategy: week-loans
- However, a contract with Phoenix, a local insurance company with 10 000 customers which will use the Okapi platform to market its car insurance products
- Projections based on actual performance and experience from Kenya
- Office and organization on the ground
- BIN through Sterling Bank
- List of customer contracts
- Integration with Paga as end-point and access to agent network
- Start of operations beginning of 2020, quick growth expected because of good preparation and
180 M population
Democratic Republic of Congo (DRC)
- Particularly well introduced.
- Same focus as in other markets: the cooperative business groups BUT!
- Quick start: contract with Cadeco, La Caise d’Épargne, the country’s savings institution
- Letter of No Objection from Central Bank in place
- Agreement with Ecobank to provide the BIN in place
- Projected start of operations: Aug 2019
Funds needed and use of funds
- 100M SEK with disbursement of a 30M SEK tranche in Q2 2019 at a valuation of 200M SEK
- Remaining 70M SEK to be disbursed Q2 2020
Use of funds
- Intensify marketing to drive up the number of customers and transactions.
- Expand our presence and organization in each market
- Expand in the cross-border market
Okapi Finance Int AB