WOCCU and Visa: Collaborating on Payments Innovation for Kenya
WCUC 2019 breakout session focuses on development of a digital financial product for SACCOs
July 30, 2019
NASSAU—World Council of Credit Unions (WOCCU) and Visa not only see the need for both Kenyan consumers, and small and medium enterprises (SMEs) to have more access to digital financial tools—they’re also working together to come up with an innovative solution.
WOCCU VP of Financial Inclusion Megan O’Donnell joined Visa Head of Community Accounts Douglas Leighton and Visa Senior Director for Merchant Segment Strategy Todd Mazurek for a 2019 World Credit Union Conference breakout session on a new digital financial product they are designing for the underserved Kenyan market.
While digital financial tools such as mPesa currently serve much of the population in Kenya, for many savings and credit cooperatives (SACCOs) in the country, these products are still too expensive or not available.
“Though technology has expanded access to finance dramatically, there are still big gaps in the market," said O'Donnell. "We at WOCCU try to work with our partners to fill these gaps. We want businesses to come in and create useful services for credit unions (SACCOs) so they can operate more efficiently, and we want to build a sustainable market. So, if WOCCU can come in and match-make or help with the research, we're happy to do that."
The new financial product is still in concept phase. In June, representatives from three Kenyan SACCOs—Universal Traders, Fortune and Siraji—joined professionals from the Kenyan Union of Savings and Credit Cooperatives Ltd. (KUSCCO) and WOCCU at the Visa Innovation Center in Dubai to map out a development strategy.
They identified text-to-pay capabilities, affordability and a broad network for services as some of the key factors for the product's ultimate success.
At Tuesday's breakout session, World Council Board Director and KUSCCO CEO George Ototo said, to be viable, the new tool would have to:
- limit the number of transaction charges
- provide a way to track transactions
- allow for mobile point-of-service sales
“While we're developing the business case, we're also working on some logistics around licensing and, ultimately, how we bring this to life via a digital app. So, those are the next steps," said Leighton.
Once the digital tool is ready, Visa hopes to implement a pilot program at select SACCOs to test it out.
Preparing for the future
If credit unions operate with a “business as usual mindset”—they do so at their own peril. That was the message Adam Lee, incubator director at the Filene Research Institute, imparted to attendees of
his breakout session “Credit Unions in the 21st Century.”
Lee reviewed the findings of the Filene Institute’s recent research to show credit unions must evolve along with the significant shifts in consumer demographics, income inequality, the nature of work and technology, if they want to remain relevant and thrive in the future.
"What about our brothers and sisters from Africa who are here? What are you seeing in your country? A lot of the data that I've seen from countries like Niger, Mali, Uganda, Angola, Zambia—they have a median age of 15 in their nations," said Lee. "What's going to happen as credit unions in those countries are serving a massively younger population?"
Lee said different opportunities and challenges await credit unions in Europe and the United States, where the elderly populations are growing.
"We had a credit union service organization executive in the United States say that every American is going to outlive their retirement," said Lee. "What does that mean for older Americans to make ends meet? They need smaller-dollar lending services, they need debt consolidation, savings and planning."
The week ahead
The World Council Young Credit Union Professional (WYCUP) Program will award five scholarships to highlight the final day at WCUC 2019. Each scholarship provides an all-expense paid trip to the 2020 World Credit Union Conference to be presented by World Council and the Credit Union National Association (CUNA), July 19-22, in Los Angeles.
Global security expert Mikko Hypponen will give the final keynote address of WCUC 2019, speaking on cybersecurity, cryptocurrency and the future financial landscape facing credit unions.
The 2019 World Credit Union Conference is presented in collaboration with the Caribbean Confederation of Credit Unions (CCCU). It runs through Wednesday, July 31.
World Council of Credit Unions is the global trade association and development platform for credit unions. World Council promotes the sustainable development of credit unions and other financial cooperatives around the world to empower people through access to high quality and affordable financial services. World Council advocates on behalf of the global credit union system before international organizations and works with national governments to improve legislation and regulation. Its technical assistance programs introduce new tools and technologies to strengthen credit unions' financial performance and increase their outreach.
World Council has implemented 300+ technical assistance programs in 89 countries. Worldwide, 89,026 credit unions in 117 countries serve 260 million people. Learn more about World Council's impact around the world at www.woccu.org.