Kitabu Africa

Losing money to debt is one of the biggest obstacles faced by shops in Sub-Saharan Africa, forcing many to go out of business. This is due to poor recordkeeping and the inability to keep track of the deadlines  they have with borrowers.  

It is estimated that, at any given time, the total debt at these shops is USD 90,000,000; and with bad debt running at 45% this creates a monthly loss of over USD 40M.  

At Kitabu Africa we have developed a mobile app that replaces and enhances the manual ledgers used by shopkeepers. The app provides estimates of the credit risk of each borrower, enabling shopkeepers to know when borrowers will pay back or if they will fail to do so. With Kitabu, shopkeepers can reduce loan defaults from 45% down to 12%. They can also save time by not keeping manual ledgers, and increase confidence in their loans thanks to data-based estimates.

Households borrowing from shopkeepers in Kenya are the highest in over a decade with the last high recorded in 2006 at 22.8 per cent. This form of credit is also highest, beating even the fast rising digital loans which grew to 8.3 per cent in 2019 from 0.6 per cent in 2016.

Despite it being the highest form of lending ,Shopkeepers in Kenya keep loosing money due to bad debts incurred on goods sold credit due to poor recordkeeping and the inability to keep track of the deadlines  they have with borrowers.  

In addition to that, Kenyan Shopkeepers are excluded from the huge digital lending market that ranges between USD 190M and USD 195M.This is due to the lack of a lending technology infrastructure forcing them to rely on pen paper method to manage the lending process. 

Pen and paper method  cant handle a large pool of borrowers and is therefore limited only to customers that shopkeepers know. 

This limitation has made Shopkeeper lending inaccessible to over 23million Kenyans of low and middle income households  who rely on digital borrowing to cushion their emergency consumption needs due to trust issues that cant be solved using pen and paper lending method 

The Shopkeeper downloads the app and registers an account with Kitabu. When a customer comes to purchase goods on credit, he registers the name of the customer, The app will check customers credit eligibility  and records the product and amount owed either offline or online if the customer is eligible for credit. 

Customers who pass eligibility test are the ones who have a good history of paying their debts based on the Kenyan credit bureau and our data based estimates using Artificial Intelligence. 

The app allows the shopkeeper to keep track of payments when the customer pays or borrows again. Whenever the shopkeeper gets online, the data is uploaded and send to cloud for storage. In addition to that, the customer receives SMS reminders when his debt is due for payment.  The shopkeeper also receives credit scores of their customers before issuing goods on credit hence safeguarding the lending process.

In addition to the information from the credit rating bureau our technology uses AI and advanced analytics to bring together the best sources of digital and behavioral data to help shopkeepers find good borrowers within low and middle income households.

Kitabu Africa is introducing a remotely accessible AI enabled mobile app that
empowers shopkeepers to become digital lenders, enabling 23 Million Kenyans to be able to buy goods on credit during time of emergencies at their shops.

Our customers for the first phase are shopkeepers. Currently, shopkeepers keep buying exercise books, which they keep complaining about how hard it is to track every transaction. Their current ability to buy record keeping materials and their want for a better material proves that they are willing to have Kitabu App at a fairly comparably cost. There is no other debt controller and recorder keeper in the market for shopkeepers except the traditional process of using pen and paper. 

Shopkeepers will choose Kitabu over exercise books because it enables them to record, track, and reclaim each debt quickly and easily without confusion and also a chance to increase their income by lending to man.

Our solution targets to reach the digital borrowing needs of over 23.5million Kenyans.

Our target customer profiles include;

1. self preservative Rural women in Kenya who are interested in saving little by little toward unexpected day to day emergency needs and can  compliment their savings with credit to manage the frequent ups and downs in their income.
2. Urban women who are actively engaged in budgeting, have a bank account( Sacco or women group) and borrow with them and need convenience way to borrow for unexpected event driven expenses whenever they have run out of cash
3. Rural Men (Blue-collar workers),a third have their own businesses-mostly farming, are part of a Sacco, financial group etc., they are in need to save and borrow up for bills
4. Young Urban Men white or blue collar professionals, mostly self employed, have a bank account, in a Sacco or financial group who need to save and borrow to meet their day to day unexpected consumption needs

Social Impact

Our social impact includes; Increased Access to Shopkeeper Credit to millions of low and middle income households, Our mobile app brings the possibility of being able to borrow on demand from any nearest partner shop(“Uber Model”) , in real time, to stretch families’ ability to make ends meet in the short term.

Shopkeepers can now make more money by selling goods on credit to many people with the confidence that they will pay back thus improving their livelihoods.

With our solution low income households can now be resilient to economic shocks, since our solution enables them to save little by little towards unforeseen day to day consumption needs and future bills.

Our problem, solution and our target population are aligned with the goals of the Fellowship.

Kenya's population is 47.5 million, or 12.2 households. With 56% of the population living in low income category and are below poverty line.

Our solution provides low-income earners in Kenya access to digital infrastructure useful when it comes to accessing financial services considering that most of them are unbanked. Kitabu App encourages safe lending  and repayment of debts at shops that serve these low income communities in Kenyan hence enabling them to strengthen their credit credibility that will enable them access more financial services.

Since the inception of the idea in 2019 , Kitabu has been working on Market research under the support of Chandaria Business Innovation and Incubation Centre-Kenyatta University. 

The Market Research has enabled us to establish a deep understanding of why shops loose money and how well we can solve the problem using an App.

 We have also been receiving mentorship from the Royal Academy of Engineering UK, through the leadership in Innovation fellowship, that Kitabu was part of starting early 2020 until now. 

Having been mentored and guided to well solve this problem, it will be a great privilege for Kitabu Africa to be selected as part of MIT Solve.

Seeing Kitabu on mobile phones of every shop keeper we buy and borrow goods from, it is my biggest ambition, one which I believe MIT Solve would set the pace to realize it.

Kitabu Mobile App will digitize the lending process, making it safer, quicker and efficient in recording and tracking customers' credits.

This will help shopkeepers in Kenya save over USD 40 Million, monthly lost revenues  as a result of poor debt record keeping.

 With proper accounting and debt control system offered by Kitabu App, shops will able to track every transaction they make, lend to customers with more confidence and reclaim debts effectively without compromising their business relationship with their customers or their revenues. This millions of saved revenues translate in growth and expansion of these micro enterprises. 

In addition, Kitabu innovatively fights for inclusion of micro enterprises to mainstream financial products such as credit and insurance, by inclusively linking them to micro-credit and micro insurance products. Not only does this lead to their economic growth but also their resilience and protection from many risks they face. 

Moreover, our Lending partnership (‘uber model’) with Shops(Small and medium enterprises in Kenya) makes as curve a unique Market Niche for ourselves-(i.e. we don’t own shops or a bank but they use our platform to gain more value)

We aim to deploy a service as platform (SAAS) Model that will creates the possibility of other lenders such Sacco's and banks to use our scoring models to partner with shops to extend consumer credit(Check out/point of sale financing) at shop outlets to their customers.

Currently we do not have any customers for our product since we just completed market research and we are headed towards prototype development and a minimum viable product with the first 100 shops and 1000 borrower on board within a period of six months after which we shall scale with the first 5000 borrowers in the first 12 Months.

Our aim is to reach over have 10Million borrowers who responsibly pay back their debts and are enrolled on our savings program to enable them be more frugal to cushion their unexpected financial needs hence making low income communities and shops that serve them more resilient and sustainable.

As a business, our development outcomes also include creating over 100,000 Job opportunities for youths as our salespeople. This helps to solve the youth unemployment crisis in Kenya and also increase income for most youth who are in the low income category.

 Our key metric will include the number of debts fully paid , the number of borrowers enrolling for savings programs, the number of low income earners who have accessed new financial services beyond household borrowing from shops and the extend up to which the income of the shops and low income earners has increased , the number of low income earners who would have progressed above the poverty line, the number of shops that will have survived to the third year of our technology roll out 

The metrics will help us understand the extend to which the inequality gap has reduced between low income ,middle income and high earner and also the extend up to which shop serving low income household have become sustainable both in rural areas and communities.

Our team includes;

1. Kelvin Willy Mulama-CEO and Founder, Full Time.
2. Isaac Opiyo-COO, Full Time.
3. Prisca Opiyo-Public Relations Officer.

I am a student Actuary and and a fellow of the leaders in Innovation Fellowship under the Royal Academy of Engineering-UK, specializing in Micro banking and insurance technology based products and business development for low and middle income communities in developing countries , with a one year experience in all stages of product development. In my innovation journey I have worked with top industry experts through hackathons, makerthons and innovation competitions.I have received certifications in innovation and enterpreneurship from, Tech Bridge invest Kenya,Safaricom Plc Kenya,Hult Prize Foundation USA and Cellulant LLC Africa.

Isaac Opiyo the COO is an almuni and Fellow of President Obama’s Young Africa Leadership Initiative (YALI) 2019.He is a highly driven and talented Actuarial Scientist with an overarching interest in strategy and innovation particularly in the domains of insurance, micro- finance, and sustainability. Isaac possesses a solid analytical and quantitative academic background supplemented with award winning skills in Data Analytics, Design Thinking, Quantitative Modeling, Research, Product Development, among others.

Isaac has worked as an intern with the Boston Consulting Group as a Strategy Consultant,KPMG.We have collaboratively worked together since when we met each other at Kenyatta University Kenya.He won the International Association of Black Actuaries Scholarship Award, 2017 and the Actuarial Diversity Scholarship.Isaac has done  reserach on MIcroenterprises with mastercard Foundation & Restless Development under  its Youth Think Tank program on micro-enterprises.Isaac Opiyo has also acted as Global Ambassador | 2019 - 2019 for The Better Tomorrow Movement.

Prisca Opiyo who is a our female lead from the United states International University Kenya,is a resourceful and dedicated team member with
excellent communication and relationship-building skills. She is an Enthusiastic communications expert eager to contribute to team success through hard work,dedication ,attention to detail and excellent organizational skills.She is motivated Motivated to learn, grow and excel in communication operations.

We met  with Prisca on loreal brandstorm challenge 2021,worked together as one team with Isaac Opiyo and the way she exceptionaly does her work made me recognize her and bring her onboard on Kitabu Africa as our Public Relations Officer.

Our biggest strength is our unrelenting passion for innovation together with the excitement to explore disruptive business models and deliver solutions that are
entrepreneurially rich and socially transformative.

When bringing Prisca on board we didn't have a female team member, hence after realizing she is a good match in terms of communication and engaging the team on accomplishing objectives, I decided to bring her on board

Kitabu Africa had reserved the position of Public relations for a female team as part of our diversity strategy in ensuring that we have gender balance in our team. 

Kitabu Africa leveraged on L'Oréals' brand storms portal to recruit, and retain Priscah Opiyo who was a top talent we noticed via the online channel and she was from another University(United States International University) Majoring in Information Technology.

 In the era of globalization and technology, we believe that the best candidate may be located across the world. Hence we have not restricted our hiring criteria in a way that it makes Kitabu Africa more accessible to anyone across the globe who would like to join our team.

We would like those part of the Kitabu community to feel comfortable showing up as their whole, true and authentic selves.  We believe in taking time to connect as individuals and as a community to celebrate each other’s identities. 

Kitabu Africa prompts an ongoing discussion to regularly engage in open, honest, and multidirectional dialogue at different levels, and works on developing a shared understanding that fosters diversity to provide an environment where everyone is committed and hardworking to ensure millions of low income households have access to financial services and shops in our communities have become more sustainable.

For Kitabu to achieve commercialization and scale, it needs a competent leader who possesses not only strong entrepreneurial acumen but also strong business skills, with the ability to assess both operational and market needs and deploy effective strategies where needed. MIT Solve neatly
integrates all of these in its program through its high quality skills training,
customized mentorship, and prize funding, hence making it to be a significant hook for me and Kitabu. I am drawn to MIT solve because I want to develop business skills set and expertise in business modelling, sales and marketing, communication, negotiation, and partnership formation that could help in making Kitabu a household name to many shops in Kenya. Seeing Kitabu on mobile phones of every shop keeper we buy and borrow
goods from is my biggest ambition, one which I believe MIT Solve will set the pace to realize it. In addition, I hope to gain exposure from and build strong networks with other innovators and budding entrepreneurs,
who are using different practices to actualize their ventures, which will ultimately give me useful ideas on
how to better my team’s approach as we aim for commercialization.

To me, Social entrepreneurship means filling a curious mind with a passion for change. It’s about embarking on a journey of curiosity, one that is driven with passion for assessing gaps in our planet and curving a niche for
myself to fix them. Whether short or long, smooth or bumpy, exciting or dull, the end goal for this journey to me is a fulfilled heart for doing something greater for mankind and for a better world. 

The humility of knowing this motivates me to always arm myself with two things: curiosity of mind and passion of heart, for they are the drivers of my entrepreneurial journey, no matter how bumpy it becomes of which I would like MIT Solve to join hands and please support me.

I believe being accepted as an MIT Solver will grant me a great opportunity to impact millions of people not only in Kenya but  on a global scale.

Since my second year in campus, I have been working hard
on various technology products in different industry until I became well known among students and lecturers as a young innovator. 

Kitabu Africa won me the First position at the Jomo Kenyatta University Actuarial Science Association innovation challenge in October 2019.

 I believe in financial inclusion using emerging technologies such as blockchain and machine learning, which I have a great passion for and It my greatest ask that I be selected as an MIT solver to making Kitabu a household name to many shops in Kenya and beyond.

I would like to gain more knowledge on  application of Blockchain ,AI and Machine learning in the digital banking industry, which will be useful in ensuring that Kitabu Africa advance into a fully digital bank with a diversified pool of customers and low income earners in specific.

It will be a great pleasure if the MIT Faculty in the areas of Blockchain, Investment, Banking, Artificial Intelligence and Machine learning can help us in the best development and implementation methodologies of the technologies to help us better serve the low income  earners.

Our fintech solution can make an impact in minimizing e-learning disparities for learners that is caused by income inequalities in the USA by advancing access of digital learning materials and tools to all students using a pay as you learn credit model

Our solution will be integrated with existing cloud based Intelligent e-learning systems that can be integrated in existing smartphones as a mobile app and web app or can be embedded into smartphones during the manufacturing process. 

The components the education based smartphone integrated Intelligent e-learning system(SIIES) will include a custom-made smartphone, an intelligent tutoring system and a control unit for the Pay as you learn(Paygo)
product financing model. 

The pay as you learn(Paygo) model increases affordability to the less privileged groups in the USA hence closing the accessibility gap of e-learning materials for both students and teachers respectively as currently experienced in the Covid-19 pandemic.

The delivery of this solution will close the education inequality by giving access to digital learning to over 90% of USA learners who may  currently be missing the home learning as it is the case in Africa. 

The  cost of the gadgets and the cost of learning will be distributed on an affordable payment plan, with an initial deposit followed by weekly or daily  payments for up to one year. After completing the payments, the users own the product outright. Advancing the e-learning system and integrating it with pay as you learn(Paygo model) will result in providing affordable digital educational tools that will benefit millions of parents,

3 billion people globally who are left out of the financial system. Many of those individuals don’t have access to a safe savings account, credit to build their business, or insurance in the case of a health emergency.  But even among this group, refugees and migrants are uniquely vulnerable to financial exclusion.

 According to UNHCR, there are 70.8 million displaced people in the world today: 25.9 million refugees living outside their home countries, plus 41.3 million internally displaced people, and 3.5 million asylum seekers.

 Displaced people are even less likely to have access to the financial tools they need to improve their lives, and many of the inherent challenges that exclude low-income consumers (lack of credit history, lack of collateral, low balances) are only exacerbated for this population. 

Displaced people still need financial services, and our Kitabu Africa will use the Andan innovation prize to scale its remote area enabled technology to offer  inclusive finance  in aid distribution, refugee identity management, help refugee build credit scores in order to access financial services and also encourage frugality with finances amongst refugees by enrolling them in our saving programs and also a chance for them to invest in stocks, bonds and treasury bills even from a basic phone.

Kitabu Africa is bringing a mobile app that replaces and enhances the manual ledgers used by shopkeepers today. The app provides estimates of the credit risk of each borrower, enabling shopkeepers to know when borrowers will pay back or if they will fail to do so thus empowering them to become digital lenders and increasing their credit offering to enable low income households access it during time of emergencies as opposed to the inaccessibility that is being experienced today.

We use AI and advanced analytics to bring together the best sources of digital and behavioral data to help shopkeepers find good borrowers within low income households.

With Kitabu, shopkeepers can reduce loan defaults from 45% down to 12%.They can also save time by not keeping manual ledgers, and lend with more confidence.

If given the HP Prize, we would use it wisely to develop, improve and refine our Machine learning and AI enabled Loss Models that gives us the ability to; model the default rates and its Characteristics, guide interest rate pricing and credit insurance decisions for our corporate clients, guide borrowers on saving and borrowing amounts

The models will be combined into an API that cab be used by other financial organizations to empower low income households, to use their data to access financial products at a lower cost, faster and more conveniently using our technology on a mobile App, USSD for basic phones and Website

Our Plans to integrate M-Pesa makes our solution scalable and reachable to
millions of Kenyans.

Part of the prize will also be used for scaling from our pilot that is on schedule.

In Kenya, 31.4 % of the licensed SMEs are owned by women as compared to 48% owned by men and 17% owned jointly by both men and women. On the other hand, 61% of unlicensed SMEs are solely owned by women while those owned by men only accounted for 6.4 % in the unlicensed category (KNBS, 2016).

Kitabu will use the prize to offer an interest free, zero fee short-term concessional loan to help women led SMES recover from the effects of the pandemic.

Kitabu Africa will lead the Recovery and Resilience of women led shops in this pandemic period and help scale our solution to be used for business recovery programs during unprecedent times such as covid19. 

Through the Kitabu COVID-19 Recovery program for women owned shops, Kitabu will target businesses owned by women-owned (18-70 years) and enterprises that support a large number of women (18-35 years) that have been impacted by the COVID-19 pandemic.

 The aim of this program will be to assist the women to ensure business continuity and sustainability and advance our technology for economic recovery purposes.

The target businesses will need to have been in existence for at least one year and have been affected by the COVID-19 pandemic. These businesses will mainly be drawn from the sectors of hawkers, retailers, shop outlets and kiosks  mostly serving low income households. 

Kitabu will leverage on its technology as a safe lender  pre-screen application against a set eligibility criterion before approval and the disbursement of funds. 

The prize will be used to develop ,refine and scales our Machine learning and AI enabled Loss Models that gives us the ability to; model the default rates and its Characteristics, guide interest rate pricing and credit insurance decisions for our corporate clients, guide borrowers on saving and borrowing amounts.

Kitabu Africa plans to use linear discriminant analysis , logistic regression ,Random forest, decision trees and Natural Processing Language(NPL) models.

The models will be combined into an API by the help of the funding to enable other financial organization to plug in and  empower low income households, to use their data to access financial products at a lower cost, faster and more conveniently using our technology on a mobile App, USSD for basic phones and Website
Our Plans to integrate M-Pesa makes our solution scalable and reachable to
millions of Kenyans thus the prize will be useful in ensuring we have an adequate cloud computing infrastructure to run our technology.

The social impact of the prize will be Increased Access to Shopkeeper Credit to millions of low and middle income households, Our mobile app together with the artificial intelligence infrastructure supported by the prize brings the possibility of low and middle income earners being able to borrow on demand from any nearest partner shop(“Uber Model”) , in real time, to stretch families’ ability to make ends meet in the short term.

Shopkeepers can now make more money by selling goods on credit to many people with the confidence that they will pay back.

Resilience to shocks-Low income households can save little by little towards unforeseen day to day consumption needs and future bills.