Shop Okoa

Over 15 million micro-traders in Kenya face rejection when attempting to acquire loans to expand their businesses. These individuals are classified as UNBANKED low-income individuals who lack credit history or any form of collateral to borrow against. Additionally, 60% of their transactions are cash-based, making it difficult to prove their monthly income and qualify for a loan. This situation forces them into the hands of predatory lenders, destroying their entrepreneurial spirit and hindering economic growth. This is not only a problem for 15 million micro-traders but also for over 100 million micro-traders in Africa, North America, and Asia who struggle to access convenient financing in this era of the fourth industrial revolution. These micro-traders are classified as Asset-Limited, Income-Constrained, Unemployed. They often fall off the radar of traditional banking systems, which tend to cater to clients with larger capital holdings. Consequently, more than 90% of the micro-trading population remains unbanked, deprived of crucial financial services. The repercussions of this financial exclusion are severe, violating SDG1. Without a bank account, fundamental financial activities such as cashing checks, paying bills, and saving personal capital become excessively challenging. These individuals face heightened risks and inflated costs in almost all financial transactions. The absence of financial support leaves them and their funds vulnerable. It's therefore unsurprising that the unbanked population constitutes a significant portion of the global poor. Over 93% of this group comes from low-income, resource-scarce communities where economic and financial limitations are the norm.

To develop a sustainable solution, we must identify the root cause of the unbanking crisis. In 2021, an alarming 92% of unbanked micro-traders attributed their lack of a bank account to inadequate identification—such as a Social Security Number, taxpayer or government-issued photo ID, or proof of address—or physical accessibility issues like distant banking facilities. This data was substantiated by a two-year follow-up study conducted by ShopOkoa Community Banking in low-infrastructure communities across Kenya, Nigeria, North America, China, and Pakistan. Our research showed that 91.4% of the 2500 respondents identified one of these two issues as the main obstacle to banking.

Despite these insights, most existing solutions sidestep these root causes, preferring their corporately convenient offerings of low-cost financial planning and prepaid debit cards. These interventions have seen limited success among the unbanked population, allowing the unbanking crisis to perpetuate global poverty.

ShopOkoa Community Banking is taking a different approach. We're developing a solution that prioritizes sustainability and accessibility, offering a digital, resource-light application process. But our commitment goes beyond providing a tool; we're also addressing the potential issue of financial segregation. To prevent the creation of a separate banking ecosystem for low-income and unbanked individuals, we're offering a community banking platform that anyone can join without discrimination. This financial mobilization strategy empowers our users to ascend the economic ladder and gradually integrate into traditional banking systems. This approach contrasts with proposals to create entirely new, isolated banking processes, which often perpetuate socioeconomic division. With ShopOkoa Community Banking Platform, we're working to bridge the gap, not widen it.

ShopOkoa is addressing the funding gap for millions of micro traders in Africa by derisking them through alternative group-based collateral substitution. It operates as a Buy Now Pay Later product, allowing micro businesses to acquire inventory on credit and and pay for it later after they have sold it,through automated deductions from their customers' future payments. Credit sales are further derisked using group-based collateral substitutions, ensuring every member contributes a fixed  monthly savings amount. This amount can be used to clear any outstanding debt in the event a business closes down due to unforeseen circumstances. The fixed saving account also leads to community rewards through dividends for everyone fulfilling their debt obligations.

With over 8 million micro traders in Kenya and over 100 million in Africa struggling to access funding. These individuals are classified as UNBANKED low-income individuals who lack credit history or any form of collateral to borrow against. Additionally, 60% of their transactions are cash-based, making it difficult to prove their monthly income and qualify for a loan. This situation forces them into the hands of predatory lenders, destroying their entrepreneurial spirit and hindering economic growth. This is not only a problem for 15 million micro-traders but also for over 100 million micro-traders in Africa, North America, and Asia who struggle to access convenient financing in this era of the fourth industrial revolution.

ShopOkoa has established itself as a reliable partner in bridging their funding gap.ShopOkoa aims to unlock financial access for micro traders such as street vendors and hawkers by building alternative collateral products. The company converts financial data into bankable profile insights. It offers a Buy Now Pay Later product for micro traders. It enables micro businesses to purchase inventory on credit and pay it back after they have made sales. ShopOkoa not only bridges the funding gap for micro traders but also supports smallholder farmers,  numbering over 300 million in Africa. This enables them to purchase farming supplies such as seeds and fertilizer on credit, facilitating increased and sustained farm production

Our team comprises a diverse blend of expertise in Technology, AI, Finance, Risk Modeling, Sales, and Marketing. All the founders are technical innovators with an average industry experience of over 5 years. Our CEO, an Actuary and Software Engineer, spearheads innovation and the development of alternative credit scoring using AI and Machine Learning. This ensures that micro-traders and smallholder farmers lacking credit history gain access to financing, aligning with SDG 1. Kelvin, our CEO, is also an alumnus of the prestigious Royal Academy of Engineering, bringing extensive experience from collaborations with international organizations such as the World Bank, Newton Fund UK, and the National Research Fund.

2.Cecilia Kiptoo.As the Co-founder with a background in Information technology and a previous Hult Prize finalist at the regionals, my role is to communicate complex technology in simpler language, a key competitive advantage for fundraising from investors who may not grasp intricate technologies.  Our third Co-founder, Purity Christine, a former Google AI expert and Royal Academy of Engineering alumna, brings a powerful blend of technical brilliance and social impact to ShopOkoa. With seven years at Google specializing in AI, she has led globally recognized projects featured across Europe, the USA, and the UK. Purity now spearheads the design and development of ShopOkoa's AI infrastructure, leveraging her expertise to provide women farmers with data-driven insights and personalized financial guidance. Beyond her technical prowess, Purity's ability to translate complex AI into tangible impact and captivate audiences at international conferences makes her a powerful advocate for financial inclusion and sustainability. At ShopOkoa, Purity's brilliance in AI empowers farmers and SMEs, aligning with our mission to build a more equitable and sustainable future.

We have built and tested our web, mobile app, and USSD technology, allowing over 7,500 micro-traders on our platform to purchase inventory and pay for it later after making sales. Alongside these services, we offer features such as savings and digital payment collection.

Moreover, we have successfully developed an MVP of the world's first embedded finance SIM card-enabled Point of Sale (POS) system. This groundbreaking system empowers unbanked micro-traders, lacking access to phones, internet, and smartphones, from low-income communities to acquire inventory on credit from our network of suppliers and settle payments after making a sale. All components of our systems seamlessly synchronize.

In our initial pilot in 2022, ShopOkoa served 7,500 micro-traders in urban low-income communities in Kenya. These users have been on ShopOkoa’s platform for over 12 months and are now independently utilizing our platform. Subsequently, we launched a pilot with 50,000 participants across Sub-Saharan Africa, including Nigeria, Uganda, Ghana, Kenya, and Cameroon. Additionally, we forged a significant partnership with the Safaricom Spark Accelerator program, the largest telecommunication company in Kenya, with the aim of scaling our "buy now, pay later" service to over 10 million unbanked individuals in low-income communities. This collaboration marks a historic milestone in Kenya's fintech history, transitioning from mobile banking to community banking.

Beyond the pilot programs, ShopOkoa conducted financial literacy and beta testing workshops that reached 11,476 low-income youth and adults running businesses in Kenya, Nigeria, and Uganda. These individuals are not pilot users but participants who have experienced and learned about ShopOkoa’s system. In total, ShopOkoa has served over 7,800 unbanked individuals, reached 12,615 people, and provided $401,662 in value to the unbanked community. Looking ahead, we aim to run another pilot campaign across North America by the end of 2024. We have also garnered interest from ministries in South Asia and Eastern Europe with the support of the Royal Academy of Engineering UK, which is introducing us to growth hacking partnerships in these new markets.

Applying to MIT Solve represents an opportunity for ShopOkoa Community Banking not only to secure critical resources for scaling our work but also to become part of a vibrant community of change-makers that can provide us with valuable insights, connections, and potential collaborations. While funding is an essential element for our growth, we understand and appreciate the value of non-monetary support. We face several challenges that we believe Solve can assist us with:

Technical Expertise: As we continue to innovate and improve our blockchain technology, we could greatly benefit from the technical mentorship and guidance that the Solve community could provide. We are particularly interested in gaining insights into enhancing our technology's scalability and security.

Market Barriers: Expanding our reach to different regions comes with its own set of challenges, including understanding diverse financial landscapes and navigating complex regulatory environments. The diverse backgrounds and experiences of the Solve community could provide us with valuable insights and connections to overcome these barriers.

Legal Guidance: As we expand globally, we must comply with various legal frameworks regarding financial services and data privacy. Access to legal expertise, potentially provided by the Solve community, would be invaluable in this context, especially since we are trying to scale to countries such as China, Ukraine, and potentially even North Korea (which are proving to be extremely difficult given their current political and governmental landscapes), and other countries across Asia and North America.

Cultural Understanding: Given our commitment to diversity, equity, and inclusion, we need to understand the unique cultural contexts of the communities we serve better. We believe the Solve community, with its wide geographic representation, could offer valuable cultural perspectives and insights. Solve has people from several walks of life working on-ground in dozens of countries, which could provide much-needed firsthand perspectives for ShopOkoa Community Banking to successfully roll out in new locations.

Networking Opportunities: We are eager to connect with other innovative organizations and individuals who are working towards similar goals. The opportunity to collaborate, share knowledge, and learn from each other's experiences can significantly enhance our impact.

In summary, our goal in applying to Solve is not merely about securing funds but about joining a community that can provide us with a comprehensive support system to help us advance our mission more effectively. There are also few organizations that offer such an extensive amount of non-dilutive funding; Solve’s funding is especially attractive since it would be through an organization whose goals of financial inclusivity are also quite closely aligned with ShopOkoa Community Banking.

Our competitive advantage lies in

1. Group-based savings as collateral substitute:
ShopOkoa empowers micro-traders who dont have traditional collateral or any credit history to access credit by leveraging  their group-based savings as a collateral substitute. This creates a trustworthy environment for businesses to trade with each other on credit without the fear of default.
2. Offering a Cashless payment system for Micro Traders to collect customer payments, which are automatically deducted to settle their debt obligations in flexible instalments.
3. Community Cards:These physical cards integrates commmunity members on a single payments infrastructure allowing millions of Kenyans in rural communities, to make purchases on credit without the need of smartphones or internet.
4. FlexiSave- Get one Bigger and Pay in small instalments.(Add pay later in the long run), in the event price changes, you can transfer the funds to normal saving count.
FlexiSave API- 

ShopOkoa's innovative approach to bridging the funding gap for micro traders in Africa holds great promise for addressing a longstanding challenge in the region. Micro traders, due to their low income economic status, lack of collateral, and limited credit history, have traditionally faced significant barriers in accessing financing for their businesses. However, ShopOkoa's Buy Now Pay Later product offers a game-changing solution by providing these traders with accessible and flexible funding options. By allowing micro traders to purchase inventory on credit and pay for it later after generating sales, ShopOkoa enables them to overcome cash flow constraints and invest in their businesses' growth. This newfound accessibility and flexibility not only empower micro traders to expand our operations and increase our profits but also contribute to broader economic development in our communities. Moreover, by encouraging timely repayments, ShopOkoa's solution helps micro traders build positive credit histories, potentially opening doors to larger financing opportunities in the future. Ultimately, ShopOkoa's efforts have the potential to not only transform the lives of individual micro traders but also to drive positive social and economic impact across Africa.

At Shopokoa we measure impact through key performance indicators (KPIs) aligned with our mission and SDG 1 Targets set by the United Nations. We measure the success of our venture by tracking the number of SME's and small holder farmers achieving increased income beyond the minimum wage of $2 a day, through our financial inclusion platform, with a specific focus on those elevating their income beyond Kenya's monthly minimum wage, which is 101.505 USD by 300%.

We also use quantitative metrics, such as the percentage of formal and informal SME's  and small holder farmers that contribute to the national income (GDP).These quantitative Metrics provide us with insights into our success in addressing financial inclusivity. Additionally, we conduct qualitative assessments to capture improved livelihoods, increased confidence, and enhanced financial literacy among beneficiaries. Shopokoa's impact measurement extends to socio-economic transformations in communities, including financial independence ( SDG 1), heightened food security (SDG 2). Rigorous data analysis and feedback mechanisms ensure transparency and accountability as we strive to empower millions of SME's fostering economic independence and prosperity.
We track income growth by checking their monthly sales ,which are able to inform our impact

ShopOkoa was built using React.js for the front-end  and the back-end utilizing Python, SQL, Postgresql, Python and Django.

For user authentication,   When a user attempts to log in, the system verifies their identity by cross-referencing the entered credentials, typically a unique username and password, with securely stored information in our database. If the provided details match, the user gains authorized access to the ShopOkoa platform
At ShopOkoa, our POS system revolutionizes the shopping experience by offering a unique ShopOkoa Community Card tied to each user's account. This exclusive card allows customers to make purchases on credit, providing a convenient option for those seeking flexible payment solutions. Additionally, ShopOkoa introduces the innovative FlexiSave feature, enabling users to save money seamlessly. With FlexiSave, users can access a loan that is 50% more than their saved amount, offering financial flexibility and support. This combination of the ShopOkoa Community Card for convenient on-credit purchases and the FlexiSave feature for enhanced financial freedom reflects our commitment to providing customers with innovative and accessible solutions tailored to their needs                                                                    The technology behind ShopOkoa's innovative features, such as the ShopOkoa Community Card and FlexiSave, relies on a sophisticated and secure system architecture. The ShopOkoa Community Card is generated and linked to each user's account through robust encryption protocols, ensuring the confidentiality and integrity of user data. This technology enables seamless and secure credit transactions, allowing customers to make purchases on loan with ease.

The FlexiSave feature leverages advanced financial algorithms and data analytics. When users opt to save money using FlexiSave, the system intelligently tracks their savings behavior. The technology dynamically calculates and adjusts the credit limit, allowing users to access a loan that is 50% more than their saved amount. This dynamic and responsive system ensures that users have access to a flexible and personalized financial tool.

Furthermore, ShopOkoa's POS system integrates cutting-edge payment processing technologies to support various payment methods, including Mpesa. This integration enables swift and secure transactions, contributing to a seamless shopping experience for both businesses and customers.

Overall, ShopOkoa's technology is designed to provide a secure, user-friendly, and innovative platform, combining encryption, data analytics, and payment processing technologies to deliver a comprehensive and reliable shopping and financial solution.

24 (these are part-time advisors and contract-based programmers, economists, and students).

2 Years

At ShopOkoa Community Banking, we understand the importance of diversity, equity, and inclusion (DEI) and we are committed to incorporating these principles into every aspect of our work. Our approach to DEI is both internal, focusing on our team and leadership, and external, considering our users and beneficiaries.

Internally, we strive to build a diverse and inclusive team, which we believe is fundamental to developing solutions that effectively serve diverse populations. We do this by actively seeking team members with different backgrounds, perspectives, and experiences. We also ensure our leadership team reflects the diversity of the communities we serve. This includes diverse representation in terms of race, ethnicity, gender, socioeconomic background, and experiences. We believe this diversity enriches our discussions, decision-making processes, and ultimately, the solutions we provide.

ShopOkoa employs a Community Banking platform with a revenue model centered on Buy Now Pay Later services, catering to financially underserved micro-traders in Kenya. Our primary objective is to facilitate access to credit for these traders, allowing them to acquire inventory on credit and defer payment until after selling their goods.

Revenue Streams:

1. Service Fee: We charge a 7.5% service fee on transactions, offering a cost-effective alternative to traditional banks and financial institutions. Our service fee model makes our solution three times more affordable, ensuring accessibility for micro-traders who may face challenges in obtaining credit through conventional means.

2. Supplier Commission: We agree on commission structures with our network of suppliers, earning up to 15% on purchases financed through our community banking platform. This revenue stream is a result of our proven ability to increase suppliers' sales by 45% compared to those who are not members of our platform.

Service Offerings:

1. Buy Now Pay Later Services: Our core service offering revolves around providing micro-traders with the ability to purchase inventory on credit and defer payment until after making sales, empowering them to engage in the economy and improve their financial status.

2. Digital Wallet:* We offer a digital wallet, functioning as a no-fee, no-interest checking account, enabling users to save, grow, and effectively manage their capital. This feature provides an avenue for financial growth and economic access previously unavailable to these individuals.

Partnerships and Trust:

1. On-Ground Partnerships: Our partnerships with ministries and bureaus ensure a high level of trust and transparency between our users and products. This collaborative approach helps us reach those who require our services the most, ensuring widespread adoption and impact.

Sustainability:

1. Mutually Beneficial Model: Our revenue model is designed to be mutually beneficial. We do not cut into the profits of the unbanked communities we support; instead, we earn revenue from supplier commissions. This approach provides a sustainable source of revenue for our company and partners, while also delivering essential financial services to underserved populations.

Technology Integration:

1. Embedded Finance POS: Our low-cost, handheld embedded finance POS system enables micro-traders to set up accounts without the need for internet, electricity, additional devices, or physical bank access. This streamlined process, facilitated through mobile phones using instant messaging and blockchain-based solutions, reduces the cost and time required to access credit by 25%.

ShopOkoa's business model revolves around providing accessible credit services to micro-traders, leveraging revenue streams from service fees and supplier commissions, while prioritizing partnerships, trust, and sustainability. Our technology integration further enhances the accessibility and efficiency of our services, contributing to financial inclusion and empowerment within the local business community.

Business Model Overview:

ShopOkoa employs a Community Banking platform with a revenue model centered on Buy Now Pay Later services, catering to financially underserved micro-traders in Kenya. Our primary objective is to facilitate access to credit for these traders, allowing them to acquire inventory on credit and defer payment until after selling their goods.

Revenue Streams:

1. Service Fee: We charge a 7.5% service fee on transactions, offering a cost-effective alternative to traditional banks and financial institutions. Our service fee model makes our solution three times more affordable, ensuring accessibility for micro-traders who may face challenges in obtaining credit through conventional means.

2. Supplier Commission: We agree on commission structures with our network of suppliers, earning up to 15% on purchases financed through our community banking platform. This revenue stream is a result of our proven ability to increase suppliers' sales by 45% compared to those who are not members of our platform.

Service Offerings:

1. Buy Now Pay Later Services: Our core service offering revolves around providing micro-traders with the ability to purchase inventory on credit and defer payment until after making sales, empowering them to engage in the economy and improve their financial status.

2. Digital Wallet: We offer a digital wallet, functioning as a no-fee, no-interest checking account, enabling users to save, grow, and effectively manage their capital. This feature provides an avenue for financial growth and economic access previously unavailable to these individuals.

Partnerships and Trust:

1. On-Ground Partnerships: Our partnerships with ministries and bureaus ensure a high level of trust and transparency between our users and products. This collaborative approach helps us reach those who require our services the most, ensuring widespread adoption and impact.

Sustainability:

1. Mutually Beneficial Model: Our revenue model is designed to be mutually beneficial. We do not cut into the profits of the unbanked communities we support; instead, we earn revenue from supplier commissions. This approach provides a sustainable source of revenue for our company and partners, while also delivering essential financial services to underserved populations.

Technology Integration:

1. Embedded Finance POS: Our low-cost, handheld embedded finance POS system enables micro-traders to set up accounts without the need for internet, electricity, additional devices, or physical bank access. This streamlined process, facilitated through mobile phones using instant messaging and blockchain-based solutions, reduces the cost and time required to access credit by 25%.

ShopOkoa's business model revolves around providing accessible credit services to micro-traders, leveraging revenue streams from service fees and supplier commissions, while prioritizing partnerships, trust, and sustainability. Our technology integration further enhances the accessibility and efficiency of our services, contributing to financial inclusion and empowerment within the local business community.