Microcred Group Brochure 2017

Microcred Group:

Digital transformation for Africa’s growth

P R OJ E C T PA R T N E R S

Headline for an company report Written by xxxxx Produced by xxxxx

The financial inclusion solution Written by Wedaeli Chibelushi Produced by Vince Kielty

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MICROCRED (AFRICA)

We spoke to Oliver Krantz, Microcred CIO, about recent developments in the firm’s IT infrastructure

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he best person to mine for information on Microcred’s IT transformation is Oliver Krantz.

For the past 20 months, Krantz is the CIO at Microcred, a microfinance company with numerous financial institutions in Africa and China. “I’m passionate about how technology is helping people in Africa get access to financial services. While financial inclusion in Africa has made a great progress in the past few years, the majority of the people in Africa are still unbanked

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TECHNOLOGY

and don’t have access to basic financial services. Our mission at Microcred is to simplify their lives and improve their living conditions through our products and services”.

While digital innovation often focuses on the client’s experience, at Microcred, it’s also in-house.

“We’re developing tools which include tighter device management on desktops and mobile devices, to strengthen our internal security and compliance”, says Krantz.

The company has over 3,000 employees worldwide, and almost the same number of devices.

“Having control of things like license management is always a challenge in Africa” he says. “Being able to see what device hardware you have, what software is installed on them, if the Windows and anti-virus updates are current etc., was a good thing to start to get.” Krantz’s team also manage access rights across the board and remotely deploy

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MICROCRED (AFRICA)

“When people say they think cash is going to go away, I think that’s a pipe dream. It’s about converting cash into electronics, transferring it somewhere then converting it back into cash again” – Oliver Krantz, CIO

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software onto all of its devices.

In 2015, Microcred launched Baobab, its new brand of digital banking for the mass market in Arica.

Recently, Baobab has deployed a mobile app that its agents can use to sign new up clients for an account.

To improve the efficiency of loan applications, Microcred also launched a mobile app for its loan officers to collect client data, including their geo-location, and submit a client loan application directly from the client’s business or home. “Our initial Baobab agent network was PC-based. We’re now rolling out tablet solutions, so

TECHNOLOGY

our agents can go out to the streets with a tablet and biometric reader and sign up new customers, doing all the KYC (Know Your Customers) there and then” Krantz explains.

For Microcred, increased mobility isn’t synonymous with an increased amount of digital payments. “Africa is still very much a cash society,” Krantz stresses, ‫״‬so when I hear statements like ‘cash is on its way to disappear’, I think that’s a pipe dream. It’s about converting cash into digital to put it in a safe and secure place or moving it across long distances and converting it back into cash again when needed”.

Baobab by Microcred is

the realization of Microcred evolution towards digital banking for the mass market.

The service is SMS-based: the customer gets confirmation for every transaction via SMS, along with special benefits and personalized offers. It is operated by an agents’ network alongside Microcred branches.

Today, there are more than 800 Baobab service points in Madagascar and Senegal, where people can carry out numerous financial transactions. Baobab was named the “Best African Retail Banking Company” in 2016.

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MICROCRED (AFRICA)

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TECHNOLOGY

Saying that, Microcred is rolling out products that will enable people to make electronic transfers.

“It’s an integral part of our business, as taking a loan and collecting repayments through this account, but it also allows people to be able use this account to pay bills or receive a money transfer. We use technology to give people the support they need, when they want it,” Krantz says.

When asked why he enjoys working at Microcred, Krantz barely hesitates. “We are a company that focuses on its customers as individuals with unique and different needs, instead of just source-of-revenue customers.

This is what differentiates us” he says.

“From a technology standpoint, we’re pushing towards first-world standards in everything we do.” With so many current IT projects and several more for the future, Microcred will surely meet these standards very soon.

500

Million MIRCOCRED annual revenue in USD

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How Microcred is using technology to improve Africa’s payments sector Written by Catherine Rowell Produced by George Tweed

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MICROCRED (EUROPE)

We spoke with Microcred Chief Innovation Officer and CTO Denis Moniotte regarding the digital transformation of the company, designing innovative products and integrating first class technologies to provide financial inclusion for all

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icrocred has come a long way from its humble origins, providing financial support to 575,000 clients and companies who are excluded from loans within a traditional brick and mortar setting.

Aligned with the company’s operations to deliver quality customer service is Chief Innovation Officer and CTO

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Denis Moniotte, who has been behind the construction of a new distribution network in Senegal and Madagascar, and is developing Microcred’s products and services to support an ever-growing customer base. “We were addressing customer needs differently a few years ago, and we will still be addressing it

differently in a few years from now,” reflects Moniotte. He explains that the company receives loan applications from clients excluded from traditional banks for a number of reasons, which ranges from the loan SME’s can afford being too small, to a lack of paper trail. “Even when the amount is acceptable, the bank will want to see paperwork documenting income, tax returns etc., and many clients don’t have that,” he says.

“They just run the business and don’t maintain any books,” leading banks to automatically reject them. Microcred aims to eliminate fake promises by truly delivering outstanding services to underbanked populations. Microcred is a commercial company, or what Moniotte calls a double bottom line business. “We are a social business,” he adds. “We are a commercial company and have to be profitable, but what happens to our clients is the key driver of our value creation.”

BUILDING NEW PRODUCTS To ensure Micocred builds products for customers which are both significant and practical, the innovation team

spends a significant portion of time listening to clients and liaising with design researchers to create ideas for future products. This enables them to build prototypes and undergo pilot programmes for approximately four months, where products are further refined and then rolled out throughout the company’s core business model.

This process also supports Microcred and helps the company understand how clients have previously managed without financial support. Dedicated staff members visit SME’s to see whether clients’ businesses are viable, cost effective and have the ability to reimburse a possible loan.

This emphasis on building customer relationships and developing new products has enabled the implementation of strong governance, policies, economics of scale and the centralisation of vital functions within Microcred’s infrastructure. Moniotte is clearly passionate about reaching out to individuals who have not previously had access to traditional financial services through these developments, as 85 percent of the population in areas the company operate are

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MICROCRED (EUROPE)

“We are on a journey to create a very different kind of business in terms of how it can be valued by the market” – DENIS MONIOTTE, CIO AND CTO

underserved by the finance industry.

Although targeting what Moniotte calls “a handful”, Microcred builds around 40 branches per country and 50,000 active borrowers who all highly value Microcred’s products and services.

To ensure a seamless delivery of services, Microcred extracts data from its platform overnight, where proprietary algorithms support the establishment and eligibility for clients who wish to receive automated decision loan products. Moniotte explains: “Each day, we determine for every client, ‘from this morning, according to the past behaviour, this

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client, on this specific product, is eligible for X amount.’” The client is then able to take a pre-approved loan from their local agent. Such developments have therefore enabled Microcred to make processes much more relevant and accessible for clients.

PERSONALISED TOOLS AND PRODUCTS Whilst Africa remains a “cash based society”, Microcred has to build a ubiquitous distribution network so clients can access their finances easily through bank agents, such as at grocery shops, pharmacies

or petrol stations. Moreover, the transformation of Microcred’s IT infrastructure has enabled clients to now gain freedom of choice and flexibility. Clients are automatically given an electronic account, where personalised tools and a centralised management system enables the company to cater to each client’s specific financial needs and access information through one core system.

Microcred’s digital transformation also incorporates the implementation of strong device management on its Windows and mobile devices.

The company utilises biometrics to

combat fraud, alongside the use of Watchguard for increased security.

Additionally, the company’s removal of admin rights across the board has allowed them to support all devices remotely. Other embedded technologies within core operations include Google’s corporate document email system, Zendesk for ticketing and Optitune as its Windows device management tool. All of these tools have become first-class technologies which are highly effective in Africa.

With its client base in mind, over a thousand commercial officers at Microcred now deliver seamless

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loan applications through the use of tablet devices, where photographs of documents can be taken, simplifying the process. The development of a smartphone app is also a customerfocused innovation Microcred is proud of, which will work without a data connection. “The number of smartphones in Africa is rising,” adds Moniotte, “but many people who have a smartphone don’t have constant access to 3G or 4G, they have really limited access.” The company’s launch of SMS based service Baobab was also named Best African Retail Company in 2016, enabling clients to gain confirmation for every transaction. There are now more than 800 Baobab service points in Madagascar and Senegal. Moniotte adds: “It’s about understanding how we can put out digital products, digitise our business and channels whilst serving clients sustainably.”

However, Moniotte is aware that the company is unable to build such innovative products and platforms alone. A partnership with Software Group was key to have a technology that supports the innovation, as it has

allowed to build tailored digital user experiences. “They are quite excited by our ability to innovate, how close we are to our clients and the ideas that we come up with,” explains Moniotte.

“We are on a journey to create a very different kind of business in terms of how it can be valued by the market.”

FUTURE GROWTH Microcred has taken approximately

Denis is CTO and Chief Innovation Officer at Microcred.

Denis leads the financial product innovation, resulting in readyto-scale innovative products for financial inclusion. The innovation process comes from orchestrating customer research, product development, scoring algorithm development, UX design, piloting, business planning.

With his team, he has delivered innovative loan and saving products and new delivery channels.

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MICROCRED (EUROPE)

500m

MIRCOCRED annual revenue in $US 20

five years to grow, amongst continual challenges of training 3,000 employees around changing rules and regulations. This is in a sphere of increasing competition, with the challenge of new players and startups which have become established in the fintech industry. However, Moniotte explains that being a “one stop shop” for clients has repeatedly given Microcred an edge, stating that “the repayment rate banks receive from clients is also defined by how much the client wants to stay in relationship with the bank.” If all companies do is provide lending services, he explains that they will more likely default on repayments, as there is no relationship to lose for the borrower.

The implementation of new technologies and digitisation of services has enabled Microcred to scale up and become increasingly sustainable by increasing efficiency and reducing costs. It is a company that focuses on its people and its clients, with significant expertise on the ground, and is now home to vast numbers of branches and a reputable brand name. The company will continue to provide a multitude of services and digital solutions, improving services through digital innovations, which will enable clients to gain increased accessibility alongside traditional services. Now such technologies have been established, replication and future growth in bringing key products to market has become a real possibility. Microcred’s digital journey has spread across the whole organisation to transform the company into a digital bank with a local presence.

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Microcred Holding 44, rue de Prony 75017 Paris - France Tel: (+33) 1 49 21 26 47 www.microcredgroup.com