German lender MyBucks eyes Kenya banking licence in race for clients

German micro-lender, MyBucks, is eyeing a deposit-taking licence from the Central Bank of Kenya in a bid to grow its local clientele base.

The Frankfurt Stock Exchange-listed financial technology company currently offers small loans to borrowers through mobile phones, but is not allowed to take customer deposits as it does not have a banking licence.

MyBucks has just signed a share purchase agreement with Opportunity International, an aid organisation that gives funding to businesses across Africa that are regarded too small by traditional banks to qualify for credit.

“Having a bank account is fundamental to ensuring financial inclusion in emerging markets.

Our partnership not only ensures the existing operations we acquired from Opportunity International remain under the Opportunity banner, but also includes select new deposit-taking operations in our other countries as well,” said MyBucks chief executive Dave van Niekerk in a statement, adding that MyBucks has access to capital and the resources necessary to meet the increasing banking regulatory requirements.

MyBucks also signed a 15-year term agreement with Opportunity International where it will retain the brand’s banking operations.

The fintech company on Tuesday finalised a relationship and Trademark Licence Agreement with Opportunity International giving it the exclusive right to use the bank’s trademark across Africa.

Earlier in the year, MyBucks bought out six micro lenders owned by Opportunity International in sub-Saharan Africa.

The German firm intends to ride on its network to integrate digital and mobile banking technology to reach customers in remote areas.

So far, MyBucks, has its footprint in 11 African markets that include Kenya, Uganda, Tanzania and Mozambique. It is also eyeing Zambia and other countries in Africa.

“Not only will we provide more clients with our products and services, but we will also serve them in a more impactful way.

“As important, our 15-year agreement not only promotes financial inclusion but will double the number of clients Opportunity International serves in three years,” said Mr Niekerk.

Last month, GetBucks, a subsidiary of the firm, began remitting mobile-based loans to self-employed individuals in the informal sector in Kenya through the Haraka application.

The product, GetBucks Kenya, advances loans of between Sh455 (€4) and Sh4,556 (€40) at 12.67 per cent interest rate with re-payment due in six days.

Borrowers are required to have an M-Pesa account and an active Facebook account to help MyBucks to minimise customer fraud and credit risk.

Borrowers seeking the loan dubbed Nano will first access small amounts as they slowly build their credit history to guarantee them more money in the subsequent loan requests.