Visa invests in Orda, Oze, WorkPay, and OkHi to boost African financial inclusion
Visa, the world’s second-largest card payment processor, has made strategic investments in four African startups as part of its plan to invest $1 billion to drive financial inclusion in Africa, the company shared on Thursday. These startups are part of Visa’s biannual Africa Fintech Accelerator program, which launched in June 2023. The program admitted 23 startups and provided mentorship, technology credits, and opportunities to connect with potential investors during Demo Day. Only four of the 23 startups in the first cohort were selected for strategic investment. The selected startups are Oze, a Ghanaian business banking platform; Orda, a Nigerian restaurant technology startup; WorkPay, a Kenyan HR and payroll management firm; and OkHi, a startup that provides address verification services using AI. “Our goal has been to uplift the brightest that are building solutions to unlock money movement, empower merchants and SMBs, and support financial inclusion in the continent,” the company said in a LinkedIn post about the programme. Startups in the second cohort, like Raenest, Beem, E-Doc, and others will pitch to Visa and other investors during a Demo Day scheduled for December 2024. Visa has also kicked off the third cohort of the accelerator programme with startups like Bumpa, Kredete, WeWire, Umba and 18 others participating.
Read MoreSafaricom secures insurance licence after a four-year wait
Kenya’s biggest telco Safaricom has secured an insurance licence from the Insurance Regulatory Authority (IRA), ending a four-year wait. The company will now offer insurance services to its M-Pesa users with a new product, Bima, its CEO Peter Ndegwa said during Thursday’s H1 2024 earnings call. The new product aligns with the telco’s strategy to broaden M-Pesa into a financial service provider that responds to its customers’ “digital needs.” The company has been testing insurance products since 2020, awaiting regulatory approval. “Innovation remains critical. We have revamped our wealth proposition and have now received an insurance intermediary license from the Insurance Regulatory Authority,” Ndegwa said. “This will help us accelerate our rollout of insurance solutions, we expect to rollout propositions in both wealth and savings but also insurance in the second half of this financial year.” Safaricom is keen to tap into the over 30 million active users who transact over $11.6 billion (KES1.5 trillion) monthly to grow its unit trust, savings, and insurance products and offset a decline in calls and text revenue. With just 3% insurance penetration in Kenya, Safaricom hopes to ride on M-Pesa’s popularity to get a piece of the insurance market. The telco’s plans to increase financial services like wealth management and insurance on its M-Pesa platform have run into multiple problems, including a push from the Central Bank of Kenya (CBK) for the company to split its mobile money into a separate unit. M-Pesa already has a unit trust product, Mali, and savings accounts through partnerships with KCB Group and NCBA. It also has an overdraft product. In H1 2024, M-Pesa accounted for 43% of the service revenue after posting a 16.6% growth to $560 million (KES77.2 billion), compared to a similar period last year. Safaricom controls a 93.4% share of Kenya’s mobile money market, leaving Airtel Money with 6.6%, according to the Communications Authority of Kenya.
Read MoreAfrichange acquires IMTO license, sidestepping costly partnerships
Africhange, a bootstrapped remittance company, has acquired an IMTO license for its Nigerian subsidiary. This license allows the subsidiary to process foreign currency transfers as it begins fundraising efforts. However, the license only allows inbound transactions, restricting holders from processing outbound transfers. The startup will compete with at least 70 companies, including deep-pocketed competitors like Lemfi and Flutterwave, processing inbound forex transfers into the country. Africhange plans to stand out in the increasingly crowded remittance market with cheaper rates and faster services. Since May, the central bank has issued over a dozen IMTO licenses as part of a push to increase the flow of foreign currencies into Nigeria. This surge in licensing led to a $585 million remittance flow in August, marking a 130% year-on-year increase. “We recognized in the central bank that certain things were not happening and that there was a need for the central bank itself to see what it could do with respect to encouraging inflows into the system. And I’m happy to say that it has paid off,” Yemi Cardoso, the CBN governor, said about the rise in IMTO licenses in September. Nigeria is one of Sub-Saharan Africa’s largest remittance recipients, with remittances accounting for 38% of the region’s $54 billion total in 2023, according to the World Bank’s Migration and Development Brief. Africhange had previously relied on third parties to process remittances into Nigeria, but the new license will allow it to sidestep those costly partnerships and process transfers independently. The startup will still need direct partnerships with Nigerian banks for transfers over $200, as amounts above that limit must be deposited directly into bank accounts. “Securing the IMTO licence allows us to offer a faster, more affordable way for people to support their loved ones back home,” said David Ajala, the CEO of Africhange. Founded in 2020, Africhange has over 200,000 users globally and has processed more than 2 million transactions since inception. The startup operates across 100 countries, including Canada, Nigeria, the UK, and Australia, processing several currencies and services for international transfers. Editor’s Note: The headline of this article has been updated to show that Africhange provided remittance services in Nigeria before acquiring the IMTO license.
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👨🏿🚀TechCabal Daily – Big boy hires
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning! Zenith Bank customers will finally breathe some fresh air after the Nigerian tier-1 bank wrote to its 30 million customers in an email signed by the Group Managing Director, confirming that it has finalised its core banking migration. The bank claims it now has “the best technology infrastructure in the industry.” It switched from Phoenix to Oracle’s Flexcube, a system used by at least eight other banks. While the migration, expected to be completed in October, did not go as hitch-free as Zenith would have liked, the bank appears eager to return to better days. Moniepoint taps Stanbic IBTC CFO First Bank flags off ₦150 billion ($89.6 million) rights issue GoLemon reduces delivery time Bitcoin surges to record high following Trump’s win World Wide Web 3 Events Fintech Moniepoint taps Stanbic IBTC CFO Bola Olujobi, Moniepoint MFB chief financial officer/Image Source: Moniepoint Moniepoint, Nigeria’s newly-minted unicorn fintech, announced yesterday that it has appointed Bola Olujobi as the Chief Financial Officer (CFO) for its microfinance bank. He was previously the CFO of Stanbic IBTC. The announcement is belated, as he joined the fintech in March 2024, according to sources. The startup says that Olujobi will drive its plan to digitise operations for 2 million SMEs, onboard 30 million businesses over the next five years, and expand its digital payments, banking, foreign exchange (FX), credit, and business management tools across Africa. While some will theorise that this means Moniepoint is eyeing a commercial bank licence, it’s likely that this is just an experienced hire. What company doesn’t need experts? Nonetheless, Olujobi’s appointment continues a trend of top fintech startups ramping up compliance hiring, and poaching top talent from banks and other fintechs. Read Moniepoint’s Case Study on Funding Women After losing their mother, Azeezat and her siblings struggled to keep Olaiya Foods afloat. Now, with Moniepoint, they’re transforming Nigeria’s local buka scene. Click here for a deep dive into how Moniepoint is helping her and other women entrepreneurs overcome their funding challenges. Banking FBN Holdings flags off ₦150 billion rights issue Image Source: First Bank It is still capital-raising season for Nigeria’s biggest banks, as they race to meet the Central Bank’s fresh capital requirements. Since March 2024 when the regulator increased minimum capital tenfold, several banks have sold shares to existing and new shareholders. FBN Holdings, the parent company of Nigeria’s oldest bank First Bank, is the latest to make a case to investors. On Wednesday, the company flagged off its ₦150 billion ($89.6 million) rights issue. It is selling over 5 billion shares to its existing shareholders. If you know any First Bank shareholders, tell them the bank wants more of their money. Just like it’s a tough time for startups looking to raise funding, Nigeria’s biggest banks are seeking capital in a tough macroeconomic condition, rising inflation, and historic scepticism around the Nigerian stock market. It means they must make a strong case to investors and the market. Yet, FBN Holdings believes it has the secret ingredient to convince shareholders to buy more shares: its diversified portfolio which has helped it maximise shareholder value. If you ask anyone in banking, that’s the Holy Grail of the industry. After closing the ₦150 billion ($89.6 million) rights issue, it plans to raise an additional ₦300 billion ($179.2 million) to draw it closer to its ambition of becoming the “leading African financial services provider delivering innovative solutions.” Issue USD and Euro accounts with Fincra Whether you run an online marketplace, a remittance fintech, a payroll, a freelance platform or a cross-border payment app, Fincra’s multicurrency account API allows you to instantly create accounts in USD and EUR for customers without the stress of setting up a local account. Get started today. Startups GoLemon halves delivery time Image Source: GoLemon GoLemon, the grocery delivery startup founded by four ex-Paystack staff members, will begin testing next-day delivery next week. Currently, it takes at least two days for an order to arrive at customers’ doorsteps in the shiny green buses. This drastic reduction in delivery time can earn the startup cool points in a market accustomed to same-day delivery from competitors like Mano, PricePally, My FoodAngels, and Chowdeck. Speed is a lot more complicated in grocery delivery than food delivery because of how badly the farm-to-table supply chain in Nigeria is fractured by a bad logistics system, inefficient storage systems, and badly organised open markets. Where riders can simply pick up cooked food from restaurants or the kitchen of a cloud kitchen in food delivery, sourcing food produce can be a lengthy process. Inventory limitations and supplier availability can sometimes lead to items being out of stock or insufficient in quantity. The startup says it can reduce delivery time because of new partnerships with reliable farmers and suppliers who can guarantee access to items. It has also developed a predictive model that can help it ensure that it takes into account what its customers are likely to order and in what quantity. By June 2024, the 8-month-old startup had delivered ₦150 million ($90,000) worth of items to 7,000 homes, so it has a reasonable amount of data to work with. The company also runs round-the-clock operations, including overnight picking and packing, processing, early morning quality checks, and real-time inventory management. While these processes sound like a no-brainer, they are people-heavy operations that need to be revised. They are also pretty expensive. However, GoLemon says that this change will not affect delivery prices as low as ₦300 ($0.18). Some startups deliver groceries in 40 minutes—Chowdeck does this by shipping from local markets or from malls when a person orders. However, this does not allow them to ensure the quality of the item. Moreover, they source from retailers, so they may be more expensive than buying directly from farmers or suppliers. GoLemon prioritises quality and affordability over speed, so it seems to have been going at its own pace to ensure it gets both
Read MoreFBN Holdings flags off ₦150 billion rights issue, with plans to raise a further ₦300 billion
FBN Holdings, the parent company of Nigeria’s oldest bank, flagged off its ₦150 billion rights issue on Wednesday. While the Central Bank increased capital requirements for the country’s biggest banks tenfold in March 2024, Nnamdi Okonkwo, FBN Holdings’ GMD, said the bank’s capital raise plan commenced in 2023. “We knew the kind of firepower we needed, and we decided to do ₦150 billion issue. Subsequently, at our next AGM, we would apply to raise another ₦350 billion,” Okonkwo said in a presentation on the Nigeria Exchange Limited (NGX) floor. The bank will sell 5,982,548,799 shares of 50 kobo each to its shareholders at ₦25.00 per share. The rights issue will close on December 12, 2024. “We have ₦270 billion and the CBN says, go up to ₦500 billion. We are currently doing ₦150 billion and at our next AGM, we’ll be asking for shareholders’ approval to do another ₦300 billion when we are done, we will then have ₦730 billion in capital. That means we’ll be ₦230 billion higher than the regulator’s stipulated capital,” Okonkwo said. FBN Holdings is the fourth tier-1 banking group to launch a capital raise to meet capital requirements, joining Guaranty Trust Holding Company GTCO, Access Holdings, and Zenith Bank Plc. Five of Nigeria’s largest banks raised a total of ₦1.26 trillion, Bloomberg reported. While its capital raise comes amid rising inflation, FBN Holdings argues that its diversified portfolio with several subsidiaries makes a strong case for shareholders. The bank operates the largest agent banking network in Nigeria and accounts for 20% market share. “It isn’t an accident that we are as diversified as we are, and that’s why, from time to time, we query our portfolio and make a decision about what to strengthen, what to divest from, and what to do less of. So leveraging our diversified businesses and shared resources to do more with less,” Okonkwo said. FBN Holdings reported a profit before tax of ₦1610.9 billion in the nine months to September 2024, representing a 128% jump compared to the previous year. In Septmeber 2024, the company sold its merchant banking business FBNQuest Merchant Bank Limited to EverQuest acquisition LLP. What will FBN Holdings use the money for? “We’ll be recapitalizing our flagship, First Bank, with a certain portion of the money, and deploy the rest for innovation and digitization across our franchise.” FBN Holdings will invest ₦103.12 billion (68.95%) to improve the capital adequacy ratio (CAR) of its banking subsidiary, First Bank. While it plans to invest ₦29.46 billion (19.7% of the proceeds) on international expansion, it will take a “step-by-step approach.” Like its tier-1 counterparts, FBN Holdings is rethinking its technology. Since the second half of 2024, Nigeria’s biggest banks have upgraded their core banking applications. FBN Holdings will invest 9.85% of the capital raised—-₦14.73 billion—-to upgrade First Bank’s digital banking infrastructure and automation systems. “We are tech-led because customers want to do transactions from the comfort of their car, house, and wherever, without issues.”
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Apply for NLNG scholarship for Nigerian undergraduates in 2024
The Nigeria LNG Limited (NLNG) is calling on first-year students enrolled in the 2024/2025 academic session to apply for its NLNG scholarship for Nigerian Undergraduates in 2024. This scholarship provides critical support to academically outstanding students in Nigeria, helping them achieve excellence and drive national progress. Below are the requirements, step-by-step application process, and essential tips to secure your application. Eligibility requirements to apply for the 2024 NLNG scholarship for Nigerian undergraduates To qualify for the NLNG scholarship for Nigerian Undergraduates in 2024, applicants must: Be a Nigerian citizen residing in Nigeria. Be enrolled as a full-time first-year undergraduate student in an accredited Nigerian federal or state-owned university. Have five O-Level credits, including Mathematics and English, obtained in one sitting through WASC, SSCE, or NECO. Be between 18 and 25 years old at the time of application. Not be a beneficiary of any other scholarship or financial aid from other organizations. Not be a direct relative of NLNG staff. Essential documents to apply for the 2024 NLNG scholarship for Nigerian undergraduates Applicants must have scanned copies of the following documents ready for upload: Recent passport photograph with a white background (450px by 450px, not exceeding 200kb) O-Level and UTME results University and JAMB admission letters University ID card Birth certificate from the National Population Commission Local Government Area (LGA) identification letter National Identification Number (NIN) slip Application Steps Create an account Register on Scholastica using your personal email and mobile number. Activate your accountCheck your email to confirm and activate the account. Complete the application formLog in, fill in personal, educational, and other details, and upload required documents. Ensure each document is labelled appropriately to prevent mix-ups. Submit your application Review all uploaded information, verify document quality, and click “Apply Now” to complete your application. ConfirmationYou will receive an email confirming your application submission. Important notes Use your personal email: Create a Scholastica account with your personal email; do not use someone else’s. Avoid errors: Recheck all information and documents before submission to prevent mistakes. For further assistance, contact NLNG’s support at 0700 123 7880 (weekdays from 9 am to 5 pm) or email scholastica@dragnet-solutions.com. Follow @scholastica_Ng on Twitter for updates. This opportunity with the NLNG scholarship for Nigerian Undergraduates in 2024 could shape your academic journey—apply today.
Read MoreGoLemon to pilot next day delivery, slashing delivery time by over 40%
GoLemon, the grocery delivery startup founded by four ex-Paystack staff members, will begin testing a next-day delivery next week, sources familiar with the matter told TechCabal. Currently, GoLemon’s earliest delivery time is two days after an order is made. Reducing delivery time by over 40% could help the company make more inroads in a market accustomed to same-day delivery from competitors like Mano, Price Pally, My FoodAngels, and Chowdeck. GoLemon confirmed it will now run round-the-clock operations to achieve faster delivery times. “Our operations now include overnight shopping (what we call picking and packing), processing, early morning quality checks, and real-time inventory management,” GoLemon co-founder Abdulrahman Jogbojogbo told TechCabal. According to a person familiar with the company’s operations, the tech team is developing a dashboard that will improve order tracking and communication within the team. This is an improvement over the Slack bots it previously used. The team will now work in shifts, improving overall efficiency. Industry reports show that faster delivery also implies increased fulfillment costs. However, GoLemon says its delivery prices will remain unchanged. Introducing next-day delivery will be a critical shift for a company that has previously shared that it prioritises quality and affordability over speed. During a panel session at Moonshot by TechCabal, GoLemon CEO Yinka Adewuyi said the company’s typical customer, who makes bulk purchases and has an average basket size of ₦50,000, is not in a rush to get their delivery. This allows the startup to sort deliveries based on proximity and provides a cost advantage with delivery fees as low as ₦300. While slow shipping allows a company to control fulfillment costs, it also makes the grocery delivery service less attractive to impulse buyers—a demographic fueling the growth of startups like Chowdeck, which sources groceries from malls and local markets in 40 minutes, and Mano, which sources from its dark stores located in various locations in Lagos and Abuja. PricePally and MyFoodAngels source produce directly from farmers and open markets. “We’ve always had next-day delivery in our sights,” said Jogbojogbo, a GoLemon co-founder. When the eight-month-old startup was in the pilot phase, it only delivered on weekends, he shared. The company has been pacing itself so it can “focus on building direct relationships with more farmers, manufacturers, and distributors who are aligned with our quality standards.” “The [current] 36-hour window probably buys [GoLemon] enough time to find the requested item and keep to the expected delivery time,” said Olapeju Umah, CEO of MyFoodAngels. Sourcing is not the only element in quick grocery delivery—it also helps if the business sets up its inventory to access more items on demand. If a startup cannot afford its warehouse, it could partner with a storage space provider. However, forecasting demand can help businesses optimise inventory. GoLemons says that it has built a smart prediction model that is already helping them stock the right items and quantities. The shorter delivery time can level the playing ground for GoLemon’s competition with older players. “[But] our goal isn’t fast commerce; it’s about providing a balanced grocery commerce experience that’s accessible to all, with groceries sold at the lowest prices and highest quality,” Jogbojogbo insists.
Read MoreMoniepoint taps Stanbic IBTC CFO for its microfinance bank after $110 million raise
Moniepoint, the Nigerian fintech that recently raised $110 million at a billion-dollar valuation, has appointed Bayo Olujobi as the Chief Financial Officer (CFO) of Moniepoint MFB, one of its subsidiaries. Olujobi, who has about 20 years of experience in finance, joins Moniepoint from Stanbic IBTC Bank, where he was CFO and non-executive director. Olujobi’s appointment as CFO comes eight months after the MFB partnered with the country’s Corporate Affairs Commission (CAC) to digitise operations for 2 million small and medium businesses. He will also play a significant role in the company’s goal to onboard 30 million businesses over the next five years. Moniepoint also plans to expand its digital payments, banking, foreign exchange (FX), credit, and business management tools across Africa. “I am really excited to have the opportunity to join Moniepoint at this time. The bank has developed an unparalleled customer proposition across the business and personal banking segments and I believe it is on the cutting edge of delivering what the consumer craves—a secure, convenient and easy platform to manage their financial lives. Moniepoint is right at the forefront of this movement,” Olujobi said in a press release seen by TechCabal. His appointment continues a trend of top fintech startups tapping up talents from banks and other fintechs. Since April, Moniepoint and other fintechs have ramped up compliance hiring, poaching top talent from banks and other fintechs.
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👨🏿🚀TechCabal Daily – KCB loses $7.7 million
In partnership with Lire en Français اقرأ هذا باللغة العربية Good morning! As far as contactless payments go, rings may be about the coolest thing to put an NFC chip in. NFC-enabled rings are as useful as they are flashy. With them, you don’t have to bend your wrist awkwardly to tap and pay, unlike with wearables like a smartwatch. Yet, reviews say NFC rings “don’t quite work as they should,” but you should be good on your third try—just carry your card as a backup. What other cool accessories that double as devices come to mind? KCB customers overdrew accounts by $7.7 million during glitch MTN’s MoMo PSB has applied for PSSP and PTSP licences Funke Opeke steps down as MainOne MD, takes advisory role Kenya’s tax collector begins monitoring mobile transactions World Wide Web 3 Opportunities Banking KCB customers overdrew accounts by $7.7 million during glitch Image Source: KCB Group Technical glitches at KCB Group, Kenya’s largest bank, allowed customers to withdraw more than their actual balances, leading to a loss of about $7.7 million (KES 1 billion) between October 11 and 31. The issue arose during critical data migration from on-premise to a colocation centre hosted by iColo, a tier 3 data centre. A subsequent attempt to integrate cloud databases resulted in a synchronisation error. This led to real-time balance updates failing, which then allowed customers, mainly those with KCB-M-PESA target savings accounts, to withdraw up to triple their saved amount. The bank has since restricted the accounts of overdrawn customers and told them to regularise their accounts so they can recoup the funds. An investigation by TechCabal has revealed multiple service disruptions and system outages over the last few weeks, a pointer that the lender is struggling to patch its systems as it modernises its IT infrastructure. Lapses in technical operations have become a concerning issue in the Kenyan banking sector over the last few years. Ecobank Kenya lost “millions of dollars” between 2020 and 2022 due to vulnerabilities in its card operations team, which left the bank exposed to potential fraud by merchants and staff. Similarly, Equity Bank was targeted in a debit card fraud case where $2.1 million was stolen. Read Moniepoint’s Case Study on Funding Women After losing their mother, Azeezat and her siblings struggled to keep Olaiya Foods afloat. Now, with Moniepoint, they’re transforming Nigeria’s local buka scene. Click here for a deep dive into how Moniepoint is helping her and other women entrepreneurs overcome their funding challenges. Fintech MTN’s MoMo PSB has applied for PSSP and PTSP licences Image Source: Zikoko Memes MTN Nigeria is going all in on fintech, swapping signal towers for something a bit more… moneyed. The telecom giant applied for two payments licences: the Payment Service Solutions Provider (PSSP) and Payment Terminal Service Provider (PTSP) licences. With the PSSP licence, MTN will be able to process payments for merchants and users alike. Imagine them as the new digital wallet you didn’t know you’d need, smoothly zipping your money from A to B. And if they secure the PTSP licence, they’ll have the green light to roll out POS terminals across the country—basically bringing cashless, card-swiping to every nook and cranny of Nigeria. Yet, MTN will have Moniepoint, OPay, and Palmpay to contend with in this segment. This isn’t MTN’s first fintech rodeo either; MoMo is one of the leading mobile money operations in Nigeria with 5.5 million wallets to show for it. And if all goes to plan—i.e., the CBN approves—these licences will make MTN a heavyweight in the financial services ring. Issue USD and Euro accounts with Fincra Whether you run an online marketplace, a remittance fintech, a payroll, a freelance platform or a cross-border payment app, Fincra’s multicurrency account API allows you to instantly create accounts in USD and EUR for customers without the stress of setting up a local account. Get started today. Companies MainOne founder and managing director Funke Opeke retires Image Source: TechCabal In November 2024, tech trailblazer Funke Opeke is retiring as Managing Director for West Africa at MainOne, the connectivity giant she founded nearly two decades ago. Opeke will still be around in an advisory role, offering her expertise as MainOne completes its transformation under new owner Equinix. Who’s filling her shoes? Wole Abu, the current CEO of Liquid Intelligent Technologies Nigeria, who’s already plotting the company’s next big moves in internet services and data centres. He resumed on November 1. The company hosted an exclusive dinner party to welcome him to the MainOne family this Tuesday. Equinix snagged MainOne for a cool $320 million in 2022, with plans to keep the MainOne brand alive under “Solutions by Equinix.” And they aren’t playing small—three shiny new data centres and a massive fibre expansion are in the works, set to make waves in Africa’s connectivity landscape. Equinix’s big leap into West Africa via MainOne has cemented its role as a heavyweight in the region’s tech ecosystem. Opeke’s journey with MainOne has been game-changing. Back in the day, she led the charge to bring West Africa’s first private submarine cable ashore, setting the stage for a connectivity revolution. Today, MainOne stands tall as Nigeria’s go-to internet provider, trusted by top banks and telcos alike. Introducing Paystack transfers in Kenya Paystack merchants in Kenya can now send single and bulk transfers to any Kenyan bank or MPESA account (including customer wallets, Paybills, and Tills) Learn more → Economy Kenya’s tax collector begins monitoring mobile transactions Image Source: Sauce.co.ke Kenya’s new tax compliance methods may bring back the antiquated methods of saving money under mattresses. The country recently got fresh funding from the International Monetary Fund—a $606 million loan. One of the loan conditions was that Kenya must increase its tax revenue—Kenya is gunning for KES 20 trillion ($158.8 billion) in the next five years. The Kenya Revenue Authority (KRA) is using technology to up the country’s tax compliance strategy and make sure it hits this audacious goal. In its brief to the
Read MoreKCB customers overdrew accounts by $7.7 million following system glitches during migration
Technical glitches during a critical data migration allowed customers at Kenya’s largest bank, the KCB Group, to withdraw sums above their bank balances. Customers withdrew around $7.7 million (KES 1 billion) from October 11 to 31, ten people familiar with the matter told TechCabal. The bank has restricted the accounts of customers who overdrew their accounts and has notified them, people familiar with the matter said. The bank is also prepared to use loan recovery companies. After migrating its databases from on-premise to a colocation centre, the bank attempted to integrate its cloud databases, leading to a syncronisation error. “After moving servers, the balances were not updating in real-time at the backend. That’s why customers could overdraw the accounts,” one person familiar with the matter said. KCB-M-Pesa target savings accounts, which allow people to access short-term loans and save, were the worst hit. “People could withdraw up to three times the saved amount,” said one person with direct knowledge of the account. The technical glitches, which lasted over three weeks, paint a picture of the bank’s struggles to modernise its IT infrastructure. A high-priority notice sent to KCB staff during the crisis showed that employees were sometimes“unable to access affected systems,” resulting in hours of service interruption or total outage. KCB Group declined to comment. At a crisis meeting on October 12, top executives discussed how to address the issue and explored recovering the lost funds. The bank has since held other similar meetings. Fraud is a growing concern in Kenya’s financial services sector, with banks losing about $130 million yearly, according to credit reporting agency TransUnion Africa. Most banking fraud cases go unreported, as lenders resolve them quietly, albeit with the knowledge of the Central Bank of Kenya (CBK) and other financial sector regulators.In 2023, Kenya’s Financial Reporting Centre (FRC), an agency that tracks money flow in financial institutions, flagged more than $600 million linked to card fraud, corruption, and terrorism.
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