Save Now, Buy Later

In Kenya, 10 million grown-ups lack access to financial services. Across Africa, there are more than 0.8 billion people who have no access to digital financial services. These are people who historically have been underserved and do not have access to modern trade top-quality digital products like savings, medical insurance, investment, and affordable credit. We realized that this level financial exclusion is costly to businesses and customers alike. Enterprises struggle to capture business that would otherwise be easy to convert with the availability of suitable financial services. Individuals are left with a few options: pay a heavy price to overcome barriers to financial services, use services offered by predatory actors, or forego financial services altogether. In the recent past, we’ve seen the arrival of financing options like Buy Now, Pay Later (BNPL) targeting this particular group. There’s a long history of retailers overlooking buyers’ desire to save money for the products or services they want. Vendors only provided options like BNPL that lead many African consumers into unplanned debt. BNPL is a short-term financing option allowing buyers to get the goods or services they need in an instant and then pay for them in future. The problem with this short-term fix is that it plunged people into debt with 6 in 10 Africans struggling to pay. The other issue is that only 10% of individuals qualify for BNPL. 

Flexpay makes essential products and services affordable for the underserved market by providing a merchant-embedded save-to-own experience as an option that incentivizes customers to save up for small and large purchases directly with merchants. Flexpay flips BNPL to prioritize savings called Save Now, Buy Later (SNBL). Customers from various sectors can save up, earn cash rewards and afford items and services they need debt-free and with no interest. Examples include making purchases in the retail sector, delivery and postnatal fees for expectant mothers from maternity facilities, insurance payments, tour and travel in the hospitality industry, school fees payments, and rent payments in the real estate sector. There has never been anything embedded in the retail experience that incentivizes people to save up for purchases to close the affordability gap debt-free and cultivate responsible spending habits. Our solution benefits both sellers and buyers. Buyers enjoy the ease of achieving their savings goals and earn attractive rewards. Sellers benefit too because of the ability to convert sales at the consideration value and get lifetime customer value. Our partner vendors get as much as 30% additional revenue by embracing flexible payment arrangements.

Flexpay's target market comprises 10 million middle- and upcoming middle-class people in Kenya and 580 million underbanked and unbanked individuals in the rest of the African countries. We also cater to merchants seeking hassle-free ways to capture business and have more than 500 partner vendors on our platform today. By offering digital financial solutions like SNBL, we collapse longstanding barriers to financial services. Several aspects of formal banking work against unbanked people in the continent, including irregular resources, cost, low penetration of banking infrastructure, and banks’ inability to meet their unique needs.

Opportunities for financial inclusion exist because all underserved adults are plugged into commercial markets in one way or the other. The reality is that financial exclusion does not mean that unbanked individuals are not financially savvy. For years, people have resorted to informal workarounds like table banking, hiding cash in secret locations in the house, relying on a trusted friend to keep their funds, or making investments like setting up a grocery stand. These people engage in myriad transactions (buying, selling, making payments, saving, and investing) every day and likely have low or sporadic incomes. What is missing in these spaces are fit-for-purpose digital financial services that help people and businesses mediate these transactions.

This is the gap that Flexpay’s SNBL fills through digitalization and last-mile distribution. Last-mile distribution promises to eliminate obstacles like physical distance, cost, and excessive bureaucracy. MSMEs comprise 96% of the continent's businesses and successfully target underserved individuals. They transact with (when selling and buying) and employ myriad underserved people and vendors daily. As such, they bring unique capabilities in targeting the bottom-of-the-pyramid customers and merchants for intensified financial inclusion efforts.

I chose this idea after an encounter I had years ago when trying to purchase a laptop from a local store. I could not come up with the entire amount. The store owner explained that I could use Buy Now, Pay Later. However, I found out that I did not qualify for the service. I then learned that there was a manual alternative allowing partial payments. This seemed like a perfect fit so I chose it. However, the purchasing journey was a bit hectic. The store used a book to track layaway transactions like mine. If the book was misplaced, then there was no veritable way for me or the owner to verify my progress. I felt there was a need to automate the process and make it more transparent and simpler for store owners and customers. That is how I came up with the idea to create a save-to-own digital financial service eliminating the challenges associated with the manual process and importing benefits like reminders, the ability to track transactions, and rewards.

This vision attracted individuals with the same experiences. Flexpay’s founding team comprises individuals who grew up in low-income households and have a first-hand experience of the financial pain underbanked individuals experience when facing different expenses like school fees, care, and household purchases. Coming from poor backgrounds also means we felt the constraints associated with having low disposable incomes as students and when we started working. Over the years, we have built a workforce comprising of young exceptional people with the same history and with the expertise to deliver intuitive financial services to the underserved majority. Together, we have 15+ years of experience monitoring and addressing the pain points unbanked and underbanked individuals and businesses experience and honing our abilities in Product Development and Validation, Software Engineering, and IT Security.

We have 150,000 users on our platform and serve over 500 enterprises from different areas, including hospitality, education, and healthcare.

We see Solve as an indispensable strategic partner at this point. We have managed to validate our SNBL product in the retail space and wish to expand to other verticals, including travel, school fees, and insurance. We also want to optimize our penetration in the Kenyan market and target additional countries. Solve can help us attain this ambition. The program provides an immersive experience allowing valuable connections that we can leverage to improve our technology and achieve desired growth.

FlexPay ensures individuals enjoy financial services at points where they go to sell, buy, work, or socialize. Our SNBL platform resolves the range of pain points buyers and sellers alike encounter with financing options. Certain benefits distinguish our SNBL services from BNPL like the lack of penalties or interest, no chance of repossession, and the ability to have a debt-free life. Sellers get earlier conversions, better sales volumes, and lifetime customer value. Our research shows that sellers get up to 30% additional revenue when partnering with Flexpay. It’s a win-win arrangement for our merchants and buyers.

In the next one year, we hope to double our vendor base and grow the number of users on our platform. The goal is to ensure for enterprises reap the benefits of digitalization and ensure Kenyans have access our fit-for-purpose product at their fingertips or at their favorite stores. We hope to help more businesses earn additional revenue and reduce customer acquisition costs. As for customers, access to SNBL is bound to improve their financial well-being and protect them from predatory financing options. Our last-mile distribution strategy is a proven model of delivering SNBL as it allows us to target users as they shop in businesses that are present in their daily lives.

In 5 years’ time, I see Flexpay as Africa’s leading meobank, with enough market share across the content to continue delivering the benefits of digitalization to underserved individuals and MSMEs. We have already started investing in our technology platforms to experiment on and validate additional non-Save-to-Buy value propositions, which may include lending to FlexPay’s best users for other purposes, credit-scoring-as-a-service, and additional fintech value propositions such as investments, insurance, and financial literacy. That means that in 2028, we will have expanded our offerings to capture various value-added financial services that perfectly meet the needs of underserved and underbanked individuals. Our strong emphasis on innovation-driven financial inclusion will continue to be the lifeblood of our growth, and I envision Flexpay as a trusted and reliable financial partner catering to millions of customers. With Flexpay’s solid portfolio of intuitive and accessible financial services, we will have entrenched our impact in the lives of individuals and MSMEs, allowing them to grow and thrive, irrespective of their income or social background.

Success in our financial inclusion efforts would mean that a larger proportion of the underserved communities enjoy barrier-free access to top-quality and affordable digital financial services. There are multiple indicators that Flexpay uses to gauge the impact of financial inclusion efforts:

• User adoption and retention levels: The total number of people who sign up for Flexpay’s services and keep using the platform is a crucial indicator of desired performance;
• Revenue growth: Revenue generation is crucial to sustain and expand the business, which will ensure the long-term attainment of our social impact goals;
• Vendor uptake: Bringing new partner vendors on board will allow the optimal penetration of Flexpay’s digital financial services, allowing target beneficiaries to receive services at their fingertips or from their favourite local vendor;
• Revenue growth for last-mile partners: Our partner vendors need to derive benefits from using the platform. Flexpay aims to ensure double-digit revenue increase for all enterprises;
• Nature of geographic penetration: This means achieving urban, peri-urban, and rural presence to avail services at points where underserved individuals engage in transactions.
• Workforce: Charity begins at home, which is why Flexpay aims to offer employment to diverse people.

Flexpay offers a merchant-embedded solution that customers can access both offline and online. Working with stores that successfully target the underserved majority is the best way to achieve financial inclusion. FlexPay is a digital saving platform allowing customers to save for products and services sold by the brands they love without debt, interest, or penalties for late payments. In fact, our customers get rewards that encourage them to save. Our solution benefits both sellers and buyers. Buyers enjoy the ease of achieving their savings goals. Sellers benefit too because of the ability to convert sales at the consideration stage and get lifetime customer value. Recent data demonstrates the positive implications of our business model. The links to informative sources are provided below:

Published Market Data and Industry Reports

General Industry Reports and Trends

• https://www.statista.com/outlook/dmo/fintech/kenya
• https://www.frost.com/files/5915/2878/3560/Digital_Market_Overview_FCO_Kenya_25May18.pdf
• https://www.cgap.org/blog/can-kenyas-fintech-boom-address-mse-finance-gap
• https://thefintechtimes.com/kenya-and-its-fintech-ecosystem-in-2022/
• https://thefintechtimes.com/country-reports/
• https://assets.kpmg.com/content/dam/kpmg/xx/pdf/2022/02/pulse-of-fintech-h2-21.pdf
• https://unctad.org/system/files/official-document/aldcafrica2022_en.pdf
• https://www.un.org/africarenewal/magazine/august-2022/fintech-other-knowledge-intensive-services-could-drive-africa%E2%80%99s-prosperity
• https://www.forbesafrica.com/brand-voice/2022/06/09/fintech-in-africa-overcrowded-just-enough-or-not-enough/
• https://edition.cnn.com/2022/07/06/economy/buy-now-pay-later-bnpl-inflation-data/index.html
• https://www.financemagnates.com/fintech/can-buy-now-pay-later-bpnl-thrive-in-africa/
• https://www.bloomberg.com/news/articles/2022-06-07/42-of-buy-now-pay-later-customers-borrowed-money-to-make-repayments?leadSource=uverify%20wall
• https://cca.hawaii.gov/dfi/files/2022/11/2022-BNPL-Research-Memo-F.pdf
• https://www.citizensadvice.org.uk/Global/CitizensAdvice/Debt%20and%20Money%20Publications/BNPL%20report%20(FINAL).pdf
• https://www.dw.com/en/calls-grow-to-curb-finance-industrys-buy-now-pay-later/a-64296530
• https://thefinancialbrand.com/news/fintech-banking/can-innovative-save-now-buy-later-app-challenge-bnpl-147968/

Underbanked People in Africa

• https://www.cnbcafrica.com/2021/the-promise-of-open-banking-in-driving-financial-inclusion-in-africa/
• https://www.afdb.org/fileadmin/uploads/afdb/Documents/Project-and-Operations/Financial_Inclusion_in_Africa.pdf

Save Now, Buy Later

• https://www.entrepreneur.com/en-in/news-and-trends/save-now-pay-later-a-new-business-model-in-fintech-that/442716
• https://vulcanpost.com/813962/sugar-save-now-buy-later-fintech-app-malaysia/
• https://timesofindia.indiatimes.com/blogs/voices/save-now-buy-later-a-shift-towards-sustainable-spending/
• https://techpoint.africa/2023/01/23/save-to-pay-later-bnpl/
• https://redseer.com/newsletters/save-now-pay-later-an-emerging-fintech-play/
• https://www.un.org/africarenewal/magazine/august-2022/fintech-other-knowledge-intensive-services-could-drive-africa%E2%80%99s-prosperity
• https://www.ifc.org/wps/wcm/connect/news_ext_content/ifc_external_corporate_site/news+and+events/news/african-fintech-rises-to-the-challenge
• https://blogs.worldbank.org/psd/fintech-and-financial-inclusion
• https://www.worldbank.org/en/topic/smefinance
• https://www.goodwell.nl/news/how-fintech-is-powering-inclusive-growth-in-africa/
• https://www.imf.org/en/Blogs/Articles/2019/02/14/fintech-in-sub-saharan-africa-a-potential-game-changer
• https://news.microsoft.com/en-xm/features/unbanked-africa-ripe-for-a-fintech-led-future/
• https://2xecommerce.com/podcas...

Buy Now, Pay Later Trends

Value of Fintech Market and Growth Rates

• https://www.statista.com/outlook/dmo/fintech/africa
• https://www.mckinsey.com/~/media/mckinsey/industries/financial%20services/our%20insights/fintech%20in%20africa%20the%20end%20of%20the%20beginning/fintech-in-africa-the-end-of-the-beginning.pdf
• https://www.csis.org/analysis/african-fintech-booming-despite-challenges
• https://newsroom.mastercard.com/mea/files/2022/10/Mastercard-Future-of-Fintech-in-Africa_Final1.pdf
• https://newsroom.mastercard.co...

We use apps, SMS technology, and cloud technology to deliver our solution.

Women bear the brunt of all forms of exclusion and require exceptional assistance from companies delivering financial services. Our ambition is to tackle women's financial exclusion in ways that incumbent financial institutions have often overlooked. We also aim to avail options that protect women from predatory services that tend to thrive in underregulated financial niches. The exponential rise of fintech in the recent past also saw the emergence of actors seeking to exploit inevitable regulatory gaps and burdening women with significant debt.

Flexpay is keen to address these issues by delivering quality digital financial services like Save Now, Buy Later and digitized table banking. These options allow women to skirt debt traps and achieve financial wellness. Flexpay ensures women enjoy quality financial services at points where they go to sell, buy, work, and socialize.

Our track record captures our success in catering to women's financial needs. We are happy that women constitute majority of our current vendor and user base. Around 81% of our agents are women and 75% of our customers are female. Up to 65% of our permanent staff are female. We also accommodate female entrepreneurs seeking opportunities for earlier conversions and increased revenue and have managed to engender a mutually beneficial relationship. We are keen to ensure females have an ample atmosphere to thrive and do so by creating advancement opportunities, offering training, and helping them forge strategic partnerships within our current network.