Fanaka Technologies

At Fanaka Technologies, we are addressing a critical challenge that impacts the economic stability and growth of communities in Zambia and, by extension, globally: the limited access to financial services for micro and small enterprises (MSMEs). This problem is substantial, with an estimated 1.02 million informal MSMEs in Zambia alone facing barriers to financial inclusion. Globally, this issue is even more extensive, affecting millions of small businesses that are crucial for economic prosperity and stability.

Lack of access to credit, financial literacy, and insurance linkages significantly hinders the ability of these enterprises to grow, innovate, and contribute to economic resilience. This challenge is exacerbated by a backdrop of escalating conflicts, economic shocks, and the precarious nature of informal employment, affecting two billion workers worldwide. The situation demands urgent attention to foster peace, stability, and prosperity through economic empowerment and inclusion. We tailor our solution to combat these factors comprehensively.

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Fanaka Technologies offers a digital platform designed to revolutionize financial inclusion for MSMEs in Zambia and beyond. Our solution focuses on three critical areas: enhancing financial literacy, providing accessible credit facilities, and integrating insurance products tailored to the needs of small businesses. 

Our digital platform simplifies the borrowing process, making it more efficient and less intimidating for MSME owners. We incorporate e-learning modules for financial education to ensure our clients are well-prepared to make informed financial decisions. Also, our platform facilitates quick loan disbursement and offers customized insurance products to address the immediate and mid-term financial needs of MSMEs.

Our technology leverages the latest in digital finance, including a user-friendly interface developed with Laravel, jQuery, MySQL, and Tailwind CSS, ensuring a seamless experience for our clients. This approach not only meets the immediate financial needs of MSMEs but also builds their capacity for sustainable growth and resilience against economic shocks.

Link for a product demo: https://www.loom.com/share/d8a...

Fanaka Technologies is dedicated to serving the underserved informal MSMEs in Zambia, with a particular focus on women-led businesses (84% of our customers). Our target population comprises small business owners who have historically been marginalized from traditional financial systems due to various barriers, including lack of collateral, insufficient credit history, or the absence of financial literacy. Our solution directly impacts their lives by providing them with the financial tools and resources necessary for economic empowerment.

We enable these businesses to invest in growth opportunities, such as expanding their operations or improving their products and services by providing them access to credit. Financial literacy training empowers them with the knowledge to make informed decisions, manage their finances and limited resources effectively, and understand the importance of insurance in mitigating risks. The integration of insurance products provides a safety net, ensuring that these businesses can withstand unforeseen challenges, such as the illness of the sole entrepreneur or hospitalization of their dependents, without collapsing.

We have built a 100% African-based team with over 56 years of combined experience providing innovative solutions to the local communities.  Our  CEO and Founder Hillary Sang, brings a decade of experience in agri-tech, insure-tech, health tech, and Pay-Go sectors, demonstrating his close proximity to the target population. Living and having worked extensively in Zambia and other African countries, Hillary has firsthand knowledge of the challenges faced by MSMEs in accessing financial services. Hillary’s prior experience opening up the Zambian market for Apollo Agriculture, an ag-tech providing financing, provided him with the proximity to the target stakeholders and communities to identify niche gaps and design solutions tailored to the specific needs and realities of ecosystem.

Our team comprises of 13 interdisciplinary members spanning, software engineers, Data scientist, legal professionals, Field officers as well as customer experience professionals, who have first-hand experience working with small and medium-sized businesses in creating and implementing simple yet impactful solutions. Our team reflects the diversity of the communities we serve now and in future with members from Zambia, Kenya and other African countries.

At Fanaka, community input, ideas and agendas are central to the design and implementation of our solution. We actively engage with MSMEs through focus groups, surveys and direct interactions through our team especially during the financial literacy programs to understand their needs, challenges and aspirations. This community-centered approach ensures that our platform and services are aligned with the real-life experiences and preferences of our target population. 

We also focus on gender inclusion as is evidenced from the fact that 84% of our customers are women. We incorporate feedback from MSMEs at every stage of development through a participatory approach. We involve stakeholders in decision-making processes to foster ownership and buy-in for greater acceptance and adoption of our products and services.

We have developed and launched a digital lending platform aimed at providing financial services to MSMEs in Zambia. We have built and tested a comprehensive suite of services, including financial literacy training, credit facilities and insurance linkages, to address the needs of our target market. Our minimum viable product (MVP) combines data collection tools, loan management software and a payment platform, which have been tested and validated. We have conducted thorough testing of our core business model, iterating on design and functionality based on user feedback and market insights.

As of March 2024, we have registered 537 borrowers and facilitated 1004 loans(Total loans disbursed $ 80,053.40), with loan repayment rate of 85.34% (Due loans) and 41% Repayment Rate (Open Loans). Our solution has facilitated insurance covers for 200+ MSMEs, along with their families, covering a total of 900+ beneficiaries through our insurance product. Our impact has been particularly pronounced among women, constituting 84% of our borrowers. We have generated a total revenue of USD 24,742.89 with an average monthly revenue of $4,500.

At Fanaka Technologies, our mission to revolutionize financial inclusion for MSMEs in Zambia and beyond is driven by a deep understanding of the challenges these businesses face. We recognize that to achieve our ambitious goals, we need support that goes beyond mere financial assistance. This is where MIT Solve's unique ecosystem of partners, mentors, and resources aligns perfectly with our needs and aspirations.

Overcoming Barriers with Solve's Support:

1. Financial and technical barriers - One of our main challenges is scaling our digital platform to reach more MSMEs effectively. We require technical expertise to enhance our platform's capabilities and ensure it can handle a growing number of users without compromising service quality. Solve's network of technology partners and mentors can provide us with the insights and support needed to overcome these technical challenges. Also, access to non-monetary support in the form of technology and development resources would be invaluable.

2. Legal and regulatory barriers - As we navigate the complex legal landscape of financial services in Zambia and plan for expansion into other markets, legal advice and guidance become crucial to ensure we are compliant and protect our business and our clients.

3. Cultural and market barriers - Understanding and adapting to the cultural nuances and market dynamics of new regions is essential for our expansion. Solve's global community offers a wealth of knowledge and experience in engaging with diverse populations, which can help us tailor our services to meet the needs of different communities effectively.

4. Networking and strategic partnerships - Beyond these specific barriers, being part of Solve's community presents an opportunity to connect with a global network of leaders, innovators, and change-makers and propel our solution forward.

Fanaka Technologies stands out through its innovative approach to financial inclusion, specifically tailored to the unique needs and circumstances of micro and small enterprises (MSMEs) in Zambia and potentially across Africa. Our solution is innovative both in its technology and its holistic approach to financial services, aiming not just to provide credit but also to empower small informal businesses with the financial knowledge and risk transfer tools they need for sustainable growth.

Innovative aspects of our solution include;

1. Integrated financial services platform - Unlike traditional financial institutions that may offer singular services, our digital platform is a one-stop-shop for MSMEs, providing access to credit, financial literacy training, and insurance products, an integration that ensures businesses have a comprehensive suite of tools to not only survive but thrive.

2. Financial inclusion of marginalized groups - With a strong gender lens, focusing on empowering women entrepreneurs (comprising 84% of our borrowers), Fanaka is poised to catalyze broader positive impacts in the financial inclusion space by setting a precedent for inclusive fintech solutions. 

3. Customized Financial Education - Our platform incorporates tailored financial literacy content that addresses the specific challenges and opportunities within the Zambian market, based on client data, secondary data, and AI. Through this approach, we empower entrepreneurs with the knowledge to make informed decisions, manage their finances effectively, and understand the value of insurance in safeguarding their businesses.

4. User-friendly technology + field agents - We leverage off-the-self cutting-edge technology and a trained network of field agents in an innovative manner that ensures our digital platform is accessible and easy to use for our target audience, many of whom may have limited digital literacy. Features such as intuitive navigation, local language support, AI, and mobile optimization break down barriers to access.

5. Data-driven decision-making - Our platform uses data analytics to provide personalized credit and insurance recommendations, improving the suitability and impact of our offerings to MSMEs. This approach also allows us to continually refine and improve our services based on user feedback and behavior.

Our innovative model serves as a blueprint for how technology can be used in informal environments to address financial inclusion holistically. We can inspire other organizations to adopt similar strategies, potentially transforming the financial services landscape for MSMEs, particularly womens’, not only in Zambia but across the continent. Our emphasis on and approach to financial literacy and data-driven AI customization can set new standards for the industry, prioritizing not just access to services but the quality and impact of those services.

Fanaka Technologies has the potential to change the market by shifting the focus from serving the financially included to prioritizing the underserved MSME sector. This shift could encourage more innovative financial products designed for the unique needs of small businesses, increasing competition and driving improvements across the sector. Our success could prompt traditional financial institutions to either reconsider their engagement strategies with MSMEs or partner with us to become more inclusive.

Theory of Change for Fanaka Technologies;

Our theory of change at Fanaka Technologies is grounded in the belief that by providing MSMEs with access to financial services, tailored training, and insurance products, we can catalyze positive economic transformations for our target population and contribute to broader prosperity in Zambia.

Inputs

Our inputs consist of financial resources, technology infrastructure, partnerships with insurance providers, and a team of dedicated professionals committed to addressing the financial needs of MSMEs.

Activities

• Conduct comprehensive e-learning and in-person financial literacy training programs on personal finance, savings, loans, investment  and insurance tailored to the needs of MSME owners.

• Utilize data analytics to offer personalized loan products that meet the diverse needs of MSMEs.

• Facilitate partnerships with insurance providers to develop and provide access to insurance products designed to mitigate business risks for MSMEs.

• Provide ongoing support and assistance to MSMEs throughout their journey, including guidance on loan applications and repayment.

• Create and continuously improve a user-friendly digital platform that integrates financial literacy, credit facilities, and insurance products.

Outputs

• A higher number of MSMEs can access loans, financial education, and insurance products through our platform.

• MSME owners gain essential financial management skills, including budgeting, investment, and risk management.

• Tailored loan and insurance products see higher adoption rates among MSMEs.

Intermediate Outcomes

• Better financial decision-making with improved financial literacy leads to healthier financial practices.

• Access to credit enables MSMEs to invest in expansion, innovation, and increased operational capacity.

• Insurance coverage helps businesses manage risks and recover more quickly from financial setbacks.

Long-Term Outcomes/Impact

• Economic empowerment of MSMEs due to increased profitability and sustainability due to enhanced financial inclusion.

• As MSMEs grow and expand, they create more employment opportunities that contribute to the reduction of poverty and economic development.

• A more inclusive financial ecosystem results in a more resilient economy, better able to withstand economic shocks and stresses.

Evidence to Support Links

• Studies, such as those by the World Bank and linked in the problem statement, demonstrate that financial literacy training significantly correlates with improved business practices and outcomes, including increased savings, investment, and access to credit.

• Research evidence suggests that access to credit is a critical factor enabling MSMEs to invest, expand, and increase their market presence, contributing to overall economic growth.

• Evidence from microinsurance initiatives shows that access to insurance products helps businesses mitigate risks, ensuring continuity and resilience against unforeseen challenges.

To validate and refine our Theory of Change, Fanaka Technologies will implement a robust monitoring and evaluation (M&E) framework that will include:

• Regular data collection through our digital platform and direct feedback from MSMEs, to measure progress against our performance indicators.

• Periodic impact assessments to assess the short-term and long-term impacts of our interventions on MSMEs.

• Use findings from M&E activities to inform continuous improvement of our programs and interventions.

Impact Goals;

• Financial Inclusion - Fanaka Technologies aims to significantly increase financial inclusion among MSMEs in Zambia, particularly targeting underserved populations such as women entrepreneurs. Our goal is to ensure that a higher percentage of MSMEs have access to formal financial services, including credit facilities and insurance products, thereby improving their financial stability and resilience.

• Economic Empowerment - We aspire to empower MSMEs to grow their businesses, create employment opportunities, and contribute to economic growth and development in Zambia. By providing access to affordable credit and comprehensive financial literacy training, our goal is to enable MSMEs to invest in their businesses, expand operations, and ultimately improve their livelihoods and the well-being of their communities.

• Gender Equality - Fanaka Technologies is committed to promoting gender equality by actively targeting and supporting women-led MSMEs. Our goal is to increase the proportion of women entrepreneurs accessing financial services and participating in the formal economy. We aim to measure progress by tracking the percentage of our borrowers who are women and monitoring their business growth and financial empowerment over time.

Measuring Progress;

• Number of MSMEs Served - We measure our impact by tracking the number of MSMEs that have accessed our financial services, including loans, financial literacy training, and insurance products. Increasing this number indicates our success in expanding financial inclusion and reaching underserved populations.(We have registered 537 borrowers and facilitated 1004 loans)

• Loan Repayment Rates - High repayment rates demonstrate the effectiveness of our credit facilities and the financial stability of our borrowers. We monitor repayment rates closely to assess the impact of our loans on the financial health and sustainability of MSMEs(Our current repayment rate is 85.34%)

• Business Growth and Profitability - We measure the growth and profitability of MSMEs that have accessed our services by tracking key business metrics such as revenue, profit margins, and employment generation. Improvements in these indicators indicate the positive impact of our solution on the economic empowerment of MSMEs.

• Gender Disaggregated Data - By collecting and analyzing gender-disaggregated data on borrowers, we assess our progress towards promoting gender equality and empowering women entrepreneurs. Increasing the proportion of women borrowers and monitoring their business performance allows us to evaluate the effectiveness of our gender-focused initiatives.(women comprise 84% of our borrowers).

The core technology powering Fanaka Technologies’ solution is an innovative digital platform designed to enhance financial inclusion for micro and small enterprises (MSMEs) in Zambia. Our platform leverages a combination of modern software technologies and data analytics to offer a comprehensive suite of financial services, including credit facilities, financial literacy training, and insurance products. This technology is rooted in the practical application of evidence-based knowledge to solve the pressing problem of financial exclusion facing our community and, by extension, similar communities globally.

Core components of our technology:

• At the heart of our solution is a robust digital lending platform built on a secure, scalable, and user-friendly web application framework. Utilizing Laravel for backend services, Laravel's MVC architecture facilitates easy maintenance and scalability, allowing us to rapidly launch and adapt to changing market needs and regulatory environments.

• We use advanced data analytics and machine learning algorithms to assess credit risk and personalize financial products that meet the specific needs of MSMEs by analyzing transactional data, repayment history, and market trends.

• Our platform incorporates an e-learning module developed through a partnership with Lean.ink (https://learn.ink/). This module delivers interactive financial literacy content, including video tutorials, quizzes, and downloadable resources, designed to equip MSME owners with essential financial management skills.

• Recognizing the widespread use of mobile devices among our target audience, our platform is optimized for mobile access and supported by a network of agents in the market who ensure that users can access and use our digital services conveniently via their smartphones and tablets, increasing our solution's reach and impact.

• In partnership with insurance providers, we have integrated insurance products directly into our platform, facilitated by API technology to allow for real-time data exchange between Fanaka Technologies and insurance partners. This ensures that MSMEs can easily access and enroll in insurance products that protect their businesses from various risks.

Leveraging traditional knowledge

While our solution is rooted in modern technology, we also recognize the value of traditional knowledge systems and practices. For instance, our financial literacy content includes lessons on community savings groups and cooperatives, which are long-standing practices in many African communities, to offer a solution that is both innovative and culturally relevant.

Benefits to People and the Planet

Our technology is designed with a dual focus on inclusivity and sustainability. We empower underserved MSMEs with access to financial services to provide them with the means for economic growth, job creation, and improved community welfare. Our digital-first approach reduces the need for physical infrastructure and paper-based processes associated with the traditional and existing solutions in Zambia.

Full time 11 and Part time 2

12 months

Here's how we ensure that our team is diverse, minimizes barriers to opportunity and provides a welcoming and inclusive environment;

• Diverse Leadership Team - Our leadership team reflects a range of backgrounds, experiences, and expertise. We have leaders with diverse academic, cultural, and professional backgrounds, ensuring that different perspectives are represented at the decision-making level. 

• Goals for Diversity and Inclusion - We have set clear goals for increasing diversity and promoting inclusion within our organization. These goals include actively recruiting and retaining talent from underrepresented groups and fostering an environment where every team member feels valued and supported. Our team consists of 7 females and 6 male, demonstrating gender equity within our organization.

• Equitable Opportunities - We strive to provide equitable opportunities for all team members to grow and advance within our organization. This includes offering training and development programs, mentorship opportunities, and pathways for career progression that are accessible to everyone, regardless of their background.

• Inclusive Environment - We prioritize creating an inclusive work environment where all team members feel welcomed, respected and supported. We promote open communication, collaboration and mutual respect and we actively address any instances of discrimination or bias.

• Community Engagement  -  We engage with diverse communities and stakeholders to ensure that our solutions are inclusive and responsive to their needs. By listening to and learning from diverse voices, we can develop more impactful and culturally sensitive solutions that benefit everyone.

We have developed and successfully deployed a B2C business model with the MSMEs at the core. With rigorous fine tuning and validating our model we have reached over 537 MSMEs serving 1004 loans since we started our operations. Our model focuses on delivering value to the MSMEs and their communities by providing financial inclusion & empowerment through digital lending, generating revenue and driving economic growth  ensuring positive impact and sustainable revenue generation. Our primary customers are informal MSMEs in Zambia, particularly those underserved by traditional financial institutions. The beneficiaries include not only the MSMEs but also their families who benefit from our insurance services, (currently serving 900+ beneficiaries) and the broader community impacted by their economic activities.

We offer our MSMEs an integration of three  financial services, including micro credit facilities tailored to their needs and cashflows, with flexible repayment terms, Comprehensive financial literacy training on managing finances, investments and insurance and We also link our borrowers to insurance products such as business interruption cover and life insurance to mitigate risks. We deliver our services through our user-friendly digital platform, enabling MSMEs to access our services conveniently from their mobile devices.

Our MSMEs need our services to overcome barriers to accessing financing, enhance their financial literacy and safeguard their businesses against unforeseen risks, enabling them to thrive and contribute to economic prosperity in their communities.

Currently, Our primary revenue source comes from our digital lending platform, where we charge a competitive interest rate on credit facilities provided to MSMEs. We also have established contractual arrangements with insurance companies, receiving a percentage of all insurance premiums collected from MSMEs utilizing our platform. 

We are currently raising our Pre-seed round equity, grant and debt to further complete our technology development, deepen our reach in Lusaka province and explore expansion into other provinces (Southern, Central and Copperbelt). This will scale our lending services to the MSMEs through on-lending the capital.

We have successfully secured funding through various channels to support our operations and growth. We have raised USD 50,000 through an equity-based financing round and obtained $20,000 in bootstrap investment. These funding sources demonstrate investor confidence in our mission and potential for impact, validating the viability of our financial sustainability plan.

Moreover, our revenue generation strategy has already yielded tangible results. As of March 2024, we have registered 537 borrowers, facilitated 1004 loans, insured 200 MSMEs with their families benefiting 900+ beneficiaries and achieved a loan repayment rate between 85% to 100%. We have generated a total revenue of USD 24,742.89 with an average monthly revenue of $4,500, reflecting the viability and growth potential of our business model. These outcomes provide a strong foundation for future success.