Startup rides on mobile money to offer low earners salary advances

Shield Finance director Kenny Kinako (right) and chief technical officer Njui Josphat. PHOTO | DIANA NGILA 

In Summary

Bio Data

Josphat Njui and Kenny Kinako are Shield Finance co-founders.
Since incorporation in May 2014, the company has brought on board six companies.
It caters for a total of 3,000 employees.
The firm’s average loan is Sh6,000.
It lends out over Sh6.12m per month.

Emergencies are trying moments. They are made worse when one does not have finances to address them.

Salary advances during such trying times are a welcome relief. This, in some cases, requires a lot of paperwork which consumes time before funds are made available by a financial institution.

Employees need not go through this hustle any more; thanks to technology unveiled by Kenyan FinTech startup Shield Finance.

The company leverages on mobile money to offer underbanked employees salary advances directly to their mobile phones.

Borrowers are charged a daily interest rate of 0.25 per cent on the salary advance, making it fair compared to what mainstream lenders charge.

Predatory Shylocks

Josphat Njui, the Chief Technical Officer at Shield Finance, says the technology helps deliver cash to employees in a timely manner while shielding them from predatory Shylocks.

“The most important thing to us is a payroll showing that the applicant works and their phone number through which the money is sent,” Njui

The salary advance service is accessible through USSD, mobile and web.

The service is M-Pesa linked and targets employees earning low salaries. They do not need to own a smartphones to enjoy the service. Shield Finance enters into an agreement with employers to provide employee data which is used to process salary advances.

Application for the loan is simple. All an employee does is dial a USSD code on the phone, a menu requesting the personal identification number (PIN) of the applicant appears on the screen. The applicant then fills in the PIN and follows prompts.

Those wishing to apply online should visit the Shield Finance website (www.shield.co.ke) and make their request. Njui says employees can benefit from the service provided their employers operate within the legal framework set by the government.

“Above all, the companies must meet our qualification criteria,” says the 28-year-old Computer Technology graduate of Jomo Kenyatta University of Technology and Agriculture (JKUAT).

He is currently pursuing a Master’s degree in Business Administration at the University of Nairobi. Kenny Kinako, 33, his business partner and co-founder, is an IT graduate from the United States International University (USIU). The two are passionate about IT and partnered to offer a technological solution to assist thousands of workers get salary advances.

Since incorporation in May 2014, the company has brought on board six companies, catering for a total of 3,000 employees. The company, whose average loan size is Sh6,000, served its first client in April this year and has not had a single non-performing loan to date

Shield Finance lends out more than $60,000 (Sh6.12 million) per month, Kinako says. Funds are sourced from angel investors.

“We are lucky to be hosted at M-Lab East Africa therefore lowering our operational expenses,” he says, adding that the company is poised for faster growth.

Shield Finance has won a number of competitions including the Mobile Finance Category of the 2015 PIVOT East competition, a startup event geared towards nurturing entrepreneurs in east Africa.

The company was also a finalist in the DEMO Africa competition held in Lagos, Nigeria, whose main objective is to connect African startups to the global ecosystem.

DEMO Africa provides a platform for the most innovative African companies to launch their products and showcase them both to the continent and the rest of the world.

Shield Finance was also a finalist in the Seedstars World competition. The contest connects the best entrepreneurs with media and corporate investors. It also provides them with support to grow and succeed.

This month, Disrupt Africa named Shield Finance among the five M-finance startups to watch in Africa.

Disrupt Africa is a one-stop portal for the continent’s tech startups. It provides news, information and commentary pertaining to the continent’s tech startups and investment ecosystem.

ligadwah@ke.nationmedia.com