Save Now, Buy Later

Team Leader

Johnson Gituma

Solution Overview & Team Lead Details

Our Organization

Flexpay Technologies

What is the name of your solution?

Save Now, Buy Later

Provide a one-line summary of your solution.

FlexPay provides a merchant-embedded saving-based purchase experience to customers called Save Now, Buy Later (SNBL).

Film your elevator pitch.

What specific problem are you solving?

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.

What is your solution?

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.

Who does your solution serve, and in what ways will the solution impact their lives?

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.

How are you and your team well-positioned to deliver this solution?

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.

Which dimension of the Challenge does your solution most closely address?

Make it easier and more affordable for individuals and MSMEs to make investments and transfer payments, across geographies and across different types of platforms

In what city, town, or region is your solution team headquartered?

Nairobi, Kenya

In what country is your solution team headquartered?

Kenya

What is your solution’s stage of development?

Growth: An organization with an established product, service, or business model that is rolled out in one or more communities

How many people does your solution currently serve?

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

Why are you applying to Solve?

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.

In which of the following areas do you most need partners or support?

Business Model (e.g. product-market fit, strategy & development)
Financial (e.g. accounting practices, pitching to investors)
Human Capital (e.g. sourcing talent, board development)
Monitoring & Evaluation (e.g. collecting/using data, measuring impact)
Product / Service Distribution (e.g. delivery, logistics, expanding client base)
Public Relations (e.g. branding/marketing strategy, social and global media)
Technology (e.g. software or hardware, web development/design)

Who is the Team Lead for your solution?

Richard Machomba - Flexpay CEO