MiKashBoks

1.7 billion people globally are excluded from the formal financial system -  lack access to bank accounts, credit, insurance, and savings. Approximately 500m of these people regularly use informal saving groups to help manage their finances. These groups go by different names around the world - 'Osusus' in West Africa, 'Tandas' in Latin America, 'chit funds' in India. 

The problem is that most of these groups are run manually and offline. Records are kept on paper ledgers and cash is stored in a box in someone's house. 

This limits their impact as paper ledgers are hard to manage, and groups are plagued with issues of safety and reliability. Most importantly, their financial lives remain invisible outside their groups and so very few participants in these groups are able to break out of the status quo and access formal financial services. 

Around $500bn flows through these groups each year in transactions - it's one of the biggest financial markets yet to benefit from mass digitisation.

MiKashBoks is a digital platform that brings these groups online. It provides an android app to replace paper-based record-keeping, digitizing their transactions and automating the calculations. Groups can connect their app to their bank and mobile money accounts to digitize cash transactions.

This makes saving and borrowing easier, safer and more reliable for the users. Most importantly, users build up a financial profile in the app which they can use to access a financial services marketplace, so that they can get loans at better rates, insurance, and other services that they previously couldn't access. 

Effectively MiKashBoks provides a bridge from informal to formal finance.

We're not trying to change what these groups do - rather, we're looking to replicate and enhance their offline activities through technology. Group-based saving and lending is incredibly effective, harnessing the power of community and social bonds - and we want to preserve the power of those communities but give them better access to a wider range of financial services through our app.

MiKashBoks is an Android-based app designed to be offline-first. It's entirely flexible so that it can accommodate different savings group models, making it scalable to different use cases and environments. We provide alternative interfaces like SMS and USSD, allowing people without smartphones to transact with their group. Our app has two primary modes: 

1. Offline Ledgers, used as a simple group accounting tool for offline savings pools and cash transactions

2. Digital Wallets manage the flow of funds within the group, offering online transactions so that cash doesn't need to move physically any more.

MiKashBoks is designed to be scalable globally. It is designed for anyone who saves and borrows in informal groups. This is currently around 500 million people around the world, but the wider market includes all of the 1.7 billion unbanked people worldwide, providing them with financial services tailored to their needs and patterns.

That said, our immediate markets where we have started operations are Sierra Leone, Nigeria and Ethiopia. We are working particularly the rural poor who save in their village communities. The majority of these groups are women. They typically do not have a bank branch close by and so formal banking is literally inaccessible to them. We also work with urban communities such as market traders - again, mainly women. While bank branches may be closer to them physically, the bank opening hours are when they need to be working at their stall, and so accessibility is still an issue. 

Given the challenges of accessibility, these groups have resorted to informal practices - not just saving together, but also borrowing from money lenders at prohibitive rates of interest. These informal practices have challenges of safety and security.

The beauty of MiKashBoks is that it brings together the accessibility of informal finance with the security of formal banking.

In the short term, Mikashboks can help improve existing practices, while in the long term, it can provide an alternative financial system for these underserved and unbanked populations. This system will be built on social capital and cohesion, emphasizing the power of community-based financial solutions.

What sets Mikashboks apart from other companies in our space is our agnosticism towards specific saving models, which enables our platform to be highly scalable across various use cases and countries. While many solutions focus just on rotating saving models or village savings and lending models, Mikashboks users select a predefined template and start with just a few clicks to tailor their group’s social contracts, transactions, lending, and payout rules to meet their unique needs. Moreover, we invested in being offline-first, and replicating as much of the in-app experience as possible across other interfaces, such as SMS and USSD, to cater to our target market's low (but growing) smartphone ownership.

Overall, we are excited about the potential of Mikashboks to positively impact communities and individuals worldwide who have been excluded from traditional financial systems.

Salton, the founder, is from Sierra Leone and has spent most of his adult life solving challenges for the financially excluded through technology. He grew up in the savings group culture - his own education was funded by his mother being part of a savings group - so he has witnessed both the benefits but also the limitations of these groups. His understanding of the region's technological constraints and limited digital literacy directly informs the way we've built the app. 

Bruce, our deployment lead, is based in Sierra Leone, and previously worked with Kiva on the 'Kiva Protocol' (a digital identity system). Together with Salton, he spent two years running pilots with savings groups in the country (and also with a business partner in Nigeria) to get feedback and ensure that the design is user-centred. 

Simon, the CEO, brings a background of over 25 years with one of the world's largest investment management companies, and he has been investing in and mentoring small businesses with a social impact in Sierra Leone for several years.

We have around 10,000 users of the app, across 3 countries, with 4 NGO partners and 2 mobile money partners and further NDAs / MOUs signed.

We have a strong pipeline of new business opportunities that would reach a total of 275,000 additional users.

There are specific areas where we need support:

- Legal and regulatory: fintech solutions are not well understood by regulators in many markets. In each country we need some kind of licence but it varies greatly by country. We would benefit from legal support to help us evaluate licensing requirements as we expand.

- Finance and accounting: help with the complexity of operating in different African markets while wanting to keep our accounts as simple as possible as a startup. 

- Product distribution strategy

- Technology: we have a small team and so are looking for additional resource to help build out the functionality of the app.

MiKashBoks' innovation lies in the integration of technology with traditional, community-based savings models, making them more accessible, efficient, and rewarding. Its offline-first approach, ease of access, user financial growth journey, adaptable savings models, bank & mobile money integration, and trust-building measures together make it a transformative solution, revolutionizing how individuals save, borrow, and build financial security within their communities.

Offline-first Approach & Ease of Access: Recognizing connectivity challenges in various regions, our offline-first Android app is specially designed for areas with limited connectivity, ensuring accessibility even in remote areas. It can also be accessed via a USSD interface, catering to users even with basic feature phones. This multi-platform access ensures that no user is left out.

User Financial Growth Journey: At the heart of MiKashBoks is the unique user financial growth journey. This innovative feature helps users gradually increase their financial capability and creditworthiness through a gamified approach. Coupled with integrated financial education and attractive incentives, it fosters financial responsibility and growth among users augmenting what already exists in the group.

Adaptable Models: MiKashBoks displays innovation in its flexible structure, adaptable to a wide variety of group savings models. This reflects a deep understanding of the cultural diversity and personal preferences of its user base, allowing the platform to cater to a broad spectrum of savings groups.

Trust-building Features: Leveraging machine learning algorithms, MiKashBoks assesses the trustworthiness of users and groups, building a reputation system based on their saving behavior. This enhances trust and credibility within the community and encourages more active participation in financial transactions.

MiKashBoks' impact goals for the next year are to digitize at least 100,000 savings groups in bottom-of-the-pyramid markets, mainly in sub-Saharan Africa. We plan to achieve this by leveraging our strategic partnerships with NGOs and development assistance partners to reach unbanked communities and using targeted marketing campaigns to increase awareness of our platform.

Our impact goals for the next five years are to digitize over 1 million savings groups in sub-Saharan Africa and other emerging and mature markets, supporting the unbanked through digital enfranchisement. We plan to work with scale partners, including NGOs and development assistance agents, to expand our reach and impact. We will also seek funding from grant-making institutions to support our growth and further develop our platform's features.

To attain our impact goals, we will persist in investing in enhancing our platform by enriching its user experience and extending its functionalities. This includes adding new features, like automatic savings pots for household expenses and discounted group purchases of essentials such as food items. We will work to improve marketing and visibility to increase adoption rates and support the growth of our platform. We will also prioritize building solid partnerships with financial institutions to facilitate users' access to credit and other financial services.

Our mission is to transform the financial experience of the last billion by providing access to formal financial services through our user-friendly and versatile platform.

We measure progress toward our impact goals through various metrics, such as the number of savings groups that have adopted MiKashBoks, the amount of savings and credit facilitated through the platform, the number of savings groups members who have built credit histories, the number of financial institutions that have connected to our financial services marketplace, and the number of NGOs and development assistance partners we have worked with.

We can also measure the impact of the MiKashBoks platform on the improved financial inclusion of our users, such as the number of savings group members who have gained access to formal financial services through the platform, the amount of interest saved on loans, the reduction in reliance on informal sources of finance, and the number of people who have lifted themselves out of poverty using multidimensional household poverty data.

To track progress, we use data analytics to monitor the platform's performance, conduct user surveys to gather feedback, and regularly review impact metrics to ensure it meets its goals. In addition to our internal data, we utilize data from NGOs and scale partners such as baseline, endline, and household data on financial inclusion, access to finance, and incomes.

MiKashBoks seeks to address the challenges faced by unbanked and underserved communities who lack access to digital financial inclusion tools. These challenges include limited access to financial services, increased risk of theft and fraud, limited opportunities for economic growth, and limited financial literacy, which can hinder their ability to improve their financial security and make informed financial decisions.

MiKashBoks aims to achieve several objectives through its digital ledger and e-wallet platforms. The primary goal is to onboard savings groups and provide an efficient platform to record their offline savings pools while regular SMS updates help the groups save and repay loans. By using MiKashBoks, the savings groups can improve their transparency and build trust within the group. In addition to this, the fully integrated e-wallet with relevant financial institutions and services supports savings groups to use e-money services and access third-party finance. This integration allows for cashless transactions, reducing the risk of theft and fraud while providing savings groups with a broader range of financial options and opportunities.

The outcomes of this work are numerous. First, savings groups have more efficient record-keeping, reducing fraud and increasing financial transparency. Additionally, they can build up a digital credit history that improves their creditworthiness to third-party financiers, increasing their access to finance. Moreover, they can access e-money services or bank accounts, enabling cashless transactions and improving their financial options and opportunities.

The impact of these outcomes is significant. By leveraging digital technologies, MiKashBoks promotes financial inclusion for unbanked and underserved communities. The platform enables savings groups to access formal financial services, invest in economic activities, purchase essential items, and protect themselves from financial shocks while reducing their reliance on informal sources of finance. By doing so, MiKashBoks contributes to achieving the UN Sustainable Development Goal of reducing poverty, promoting economic growth, and closing the global gap in financial inclusion.

MiKashBoks' innovative solution is built upon a blend of modern digital technologies and traditional, community-based savings models. Here's how the core technology of our solution is organized:

Interfaces:

1. Mobile App: Primarily an offline-first Android application, MiKashBoks offers a user-friendly and intuitive interface that allows users to create, manage, and participate in savings groups.
2. USSD: For users with basic feature phones, we've integrated Unstructured Supplementary Service Data (USSD) technology into our platform. This ensures accessibility and inclusivity, even in areas with limited or no internet connectivity.
3. SMS Technology: Recognizing the variability of internet connectivity, MiKashBoks uses SMS technology for essential notifications and updates, ensuring all users can stay informed and engaged.

Core:

1. Core Banking System: MiKashBoks utilizes a robust core banking system to facilitate accounting, and manage all the financial transactions, including savings, lending, and fund transfers.
2. Machine Learning & Social Graphs: By leveraging machine learning algorithms and social graph analysis, we assess the trustworthiness of users and groups, fostering a reliable community ecosystem. This system also helps in personalizing the user experience (especially financial education). Additional it helps us measure group-cohesion and users' understanding of each other's risk. 
3. Rules Engine: Our rules engine is integral to setting the guidelines for group savings, managing the transaction limits, and enforcing the rules of each savings group.
4. KYC/AML: We have integrated Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures to ensure the legitimacy of all transactions and users.

Integrations:

1. Financial Service Integrations: MiKashBoks seamlessly integrates with existing mobile money platforms like Orange Money. This allows users to conduct financial transactions directly from their mobile money accounts
2. KYC/AML Integrations: We integrate with external KYC/AML services to verify the identity of our users and maintain the integrity of our platform.

APIs:

1. Marketplace API: Our Marketplace API allows NGOs and banks to connect with our platform, expanding the range of services available to our users and facilitating collaborations. It also provides a safe and consent-gated environment for our users to discover and engage with those 3rd party services. 

Security:

1. Cryptography & Signed Transactions: We employ modern cryptographic methods and signed transactions to ensure the security of all financial transactions and safeguard user data.

Traditional, Ancestral Knowledge Systems:

1. Community-Based Savings Models: At the heart of MiKashBoks are traditional, community-based savings models. By digitizing these models, we are leveraging this ancestral knowledge system to foster financial inclusion and community building

We are an equal opportunity employer and value diversity at our company. We do not discriminate on the basis of race, religion, color, national origin, gender, sexual orientation, age, marital status, veteran status, or disability status.

Our business model has 3 components:

1. INGOs: we partner with INGOs who operate many thousands of savings groups around the world. Currently these operations are offline and manual and record-keeping is extremely onerous; by digitising their savings groups, we provide all the benefits of MiKashBoks to the end users, but also provide a 'dashboard' for the INGO giving them real-time data on all their groups. This enables them to monitor their groups much more effectively and also gives a reporting tool that they can use to demonstrate impact to their donors. 

The INGOs pay us a licensing fee for access to this service.

2. The end users: the app is free to use, but once groups are connected - through MiKashBoks - to a digital payment provider, we take a small commission on profits they make in their group.

3. Third parties: this will be the most significant revenue stream over time. When MiKashBoks users access third party products through our marketplace, we charge an arrangement fee to that third party (eg a small percentage of a loan made to a MiKashBoks user). We are providing those third parties access to users, with a financial profile already established, that are otherwise almost impossible to reach and service economically.

• We currently have won 5 contracts with INGOs to digitise their savings group programmes. These will reach 38,000 users with a total value over the next 12 months of $74,000

• We have a solid pipeline of business opportunities with a total value of $322,000. Only winning a fraction of this will comfortably bring us to our medium term goal of $10,000 monthly recurring revenue 

• These contracts would reach a total of 275,000 users

• We are looking to close out our seed round, with $250,000 left to raise (for a total of $1 million).
  

• We are also applying to foundations and development finance institutions for grants both independently and in partnership with INGOs 

Grants won: $50,000 from UNCDF (in 2019 to fund the initial prototype)

Investment funding raised: $750,000. The initial seeding was from Truestone Impact Investment Management; the rest of the capital has been raised from private investors and family offices

Awards won: $10,000 for winning second place in 2022 in the MIT Fintech Startup Competition; $11,000 from Harvard Social Impact Fund Fellowship; $2,500 from Harvard Undergraduate Capital Partners

Revenue generated to date: $10,000 from contract with an NGO