Microfinance institution Mukuru announces that obtaining a Deposit-taking Microfinance license will result in cost reductions, which they plan to pass on to customers.
Mukuru Obtains Deposit-Taking Microfinance License, Boosting Financial Inclusion in Zimbabwe
Mukuru, a leading financial services provider in Zimbabwe, has been awarded a Deposit-Taking Microfinance Institution (DTMFI) license. This significant milestone marks a significant step towards bridging the gap between formal and informal financial services in the country.
With this license, Mukuru can legally accept deposits from customers, including Small and Medium Enterprises (SMEs), women, youth, and rural communities. This move contributes to significant cost savings for these groups by providing safer and more accessible financial services.
The licence facilitates cost savings in several key ways. Firstly, it reduces the reliance on informal lenders and expensive credit sources. As a licensed deposit-taking institution, Mukuru can mobilize savings and provide affordable credit, thus lowering borrowing costs for these groups who are traditionally excluded or face high-interest rates from informal sources.
Secondly, the licence enables Mukuru to offer comprehensive financial products such as voluntary and mandatory savings, recurring deposits, and credit. These products help customers manage cash flow, build credit history, and access loans at better rates.
Thirdly, technological efficiencies lower transaction costs. Utilizing technology such as biometric verification and automated savings module integration improves operational efficiency, reduces fraud risk, and minimizes the need for customers to physically travel to banking points, lowering time and transport costs especially for rural users.
Fourthly, improved trust and security come with regulatory approval via the licence. This increases customer confidence to deposit savings securely, which can discourage risky cash storage or reliance on high-fee intermediaries.
Lastly, the licence positions Mukuru to participate in clearing and settlement schemes and connect to mobile money channels, facilitating low-cost digital payments and credit transfers that benefit SMEs and individuals by reducing cost and time delays in transactions.
Mukuru serves over three million loyal customers and has 250 owned access points, with 40% of these in rural areas. More than 90% of people who receive remittances through Mukuru cash them out, positioning Mukuru well to help them along their digital financial inclusion journeys.
Andy Jury, Group CEO of Mukuru, stated that the DTMFI license is a significant milestone for Mukuru as it aligns with Zimbabwe’s National Financial Inclusion Strategy. Doug Tait-Knight, CEO of Mukuru Zimbabwe Financial Services, added that financial inclusion uplifts communities by enabling them to access financial services and enter the mainstream economy.
With this license, Mukuru is poised to deliver innovative digital solutions that address the specific needs of their customers, driving financial inclusion, particularly among underserved groups such as SMEs, people with disabilities, women, youth, and rural communities.
- The license awarded to Mukuru allows them to accept deposits from businesses, Small and Medium Enterprises (SMEs), women, youth, and rural communities, thereby contributing to cost savings for these groups by providing accessible and affordable financial services.
- Leveraging technology such as biometric verification and automated savings module integration, Mukuru aims to lower transaction costs, improve operational efficiency, reduce fraud risk, and foster digital financial inclusion, particularly among underserved groups like SMEs, people with disabilities, women, youth, and rural communities.
