Earlier this year my old friend, Alby Shale, and I headed to Kigali (the capital of Rwanda) to learn whether our new idea had any legs. Over 3 days we had 25 meetings with members of the Rwandan Government, Microsoft and Carnegie Mellon Univesity Africa and gained entry to a meeting of COMESA Business Council (official photos feature two friends masking imposter syndrome with broad smiles… a feeling that doesn’t go away).
We returned to London full of enthusiasm, even if our idea at that point (completely) missed the bullseye. Along with our brilliant Co-Founder, Sasha Borovik (who’s story would thrill even John Le Carré), we registered ZAKA with Companies House in July.
Since then, we’ve refined ZAKA to hit the bullseye, become a partner of Microsoft (official announcement to come), moved nearer to a ground-breaking relationship with Carnegie Mellon University Africa (led by former-firefighter, current Professor of ICT and our interim-CTO Martin Saint), and initiated a partnership with the Government of Rwanda for our proof of concept. Financial and utility providers are interested in joining the platform and there’s growing evidence that ZAKA will be popular among consumers. We have a prototype under development, a brilliant team of 5 (the last of which is Yasin Qureshi, the youngest European ever to be awarded a banking license) and heaps of enthusiasm.
So… what is ZAKA? Why are we of interest to one of the world’s largest cloud service providers, one of the world’s greatest tech universities, and a Government that is renowned globally for its business savvy?
ZAKA connects consumers with services they need.
We enrich the digital identities of Rwandan consumers and match them with existing digital financial service providers and products.
A Rwandan farmer and mother might be offered a savings account for her children, loans that support her to buy farming inputs and learning materials for her daughter’s secondary school, and an insurance package that supports her children in the case of her injury or loss of life.
All these important products exist in Rwanda. But their reach and the depth of their engagement with customers is limited.
At this point it helps to explain some of the thinking behind behind ZAKA.
1. Trust & Cost
There are only two compelling examples of financial services scaling effectively across
Africa. And even these are limited.
- Mobile Money: MPESA is used by around 68% of the Kenyan population. In most African countries mobile money is skirting around 30–40% adoption among adults and, in some noteworthy examples, far less.
- Group savings, investment and insurance: A very different, but fascinating and truly pan-African financial service are group savings, insurance and investment schemes. In Rwanda they’re called SACCOs, Sierra Leone they’re Osusus, in Cameroon Njangi. The same model is replicated all over the continent, independent of one another.
Mobile network operators have an existing and trusted infrastructure and customer base through which to distribute new products and services, like mobile money. Group schemes are relatively cost-free and de-centralised so personal relationships are decisive.
What holds other financial service providers back?
TRUST & COST
It is technically and commercially difficult for companies to know and trust their customers sufficiently to meet regulatory standards and reduce risk, let alone target customers with the products that meet their needs.
Reaching rural customers (which still comprise over 50% of people in most African countries) requires significant human and capital expenditure. Think of MPESA and it’s 37,000 mobile money agents in Kenya. That network does not come cheap, and is a big reason why MPESA beyond Kenya’s borders has been less awe-inspiringly successful.
The barriers felt insurmountable to us as well. So we asked the question:
“Where’s the leapfrog gonna come from?”
The answer must satisfy both the cost and trust barriers. It must be scalable. It must be achievable for the poorest consumer.
We believe the answer is digital identity.
So, how do we build digital identities for, well, everyone?
ZAKA wants to be a platform that connects customers (with their sparkling new digital identities) to businesses (with their sparkling-yet-under-utilised products). So…
- we have to get lots of customers on board quickly.
- we have to find a way of getting to know and trust those customers.
- we have to generate data that helps our financial service partners target products to customers.
We decided to review the touch-points that exist between the state and the citizen in Rwanda. Two big ones stand out: education and health.
The average Rwandan goes to their hospital or community health clinic twice per year. It’s a fantastic system made accessible by a national health insurance scheme.
We believe clinics are a natural launch pad for customer acquisition and, working with the Government of Rwanda, we have found an opening to build a clinic check-in system.
- Clinics are a universal touch point between state and citizen: an opportunity for mass adoption.
- The Government of Rwanda is passionate about digitising health records and creating an electronic health system: an opportunity to solve a problem.
- Doctors, Nurses and Community Health Workers are trusted professionals: an opportunity for these people to double-up as KYC agents and build trust into the system.
This is why ZAKA’s first act is to build a patient check-in system for clinics and hospitals to initiate the digitisation of health records while creating the basis of a digital identity.
The leapfrog moment comes when we’re able to rapidly generate millions of digital identities and use these to target consumers with financial services they didn’t previously have access to or understand.
The leapfrog is this:
- In the UK, to become “trusted” we go to a bank (hours of life), submit utility bills (who keeps them!?), share ID documents (easy if you have them) and get all these co-signed by the accountant in our friendship circle (thanks, Tod).
- But with ZAKA, people get introduced to us in a place they go anyway (clinics), prove their trustworthiness with people whose job is partly to identify people anyway (doctors), and pre-qualify them for financial service providers using sparkling new digital identification technology.
ZAKA is leapfrogging bureaucracy.
Distilling this down to a disruption or two:
- We’re shifting the financial inclusion conversation to quality and depth.
- We’re cutting the cost base for digital service providers.
We talk about ZAKA as putting “opportunity in your pocket”. We want to borrow from the trust and immediacy of group schemes, and the scale and interconnectedness of mobile networks to create a system of trust and utility that consistently compounds benefits to the consumer.
Our focus for now is raising funds, building the team and proving the concept.
Want to keep in touch?
Disclaimer: ZAKA is very early stage. We’re pre-seed and pre-product. If we say we can do certain things, it means we’re dedicated to one day being able to do those things.