Updated Mar 29, 2019

George hope Chidziwisano

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SmartChama is a digital financial system designed for collaborative money management in Kenya's informal micro-savings groups with the aim of improving financial transparency and accountability for group members.

SmartChama design is based on chama groups’ core purpose of collaboratively saving money, providing loans to its members, and share dividends at the end of the year. The system allows group members to: deposit money; request and get a loan; approve or reject a loan; view group standings; and share dividends at the end of each year. The system is integrated with M-Pesa, to allow transactions bet...
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SmartChama design is based on chama groups’ core purpose of collaboratively saving money, providing loans to its members, and share dividends at the end of the year. The system allows group members to: deposit money; request and get a loan; approve or reject a loan; view group standings; and share dividends at the end of each year. The system is integrated with M-Pesa, to allow transactions between group members’ personal accounts and their chama group’s account. SmartChama has two primary components: an “Unstructured Supplementary Service Data” (USSD) Transceiver and a mobile-based application. USSD transceiver consists of a micro-controller and a SIM 900 GSM Shield. We embedded a SIM Card in the SIM 900 GSM Shield and registered an account on M-Pesa. This is considered the chama group account that hold group savings. We programmed the micro-controller using AT Commands in order to act as a USSD gateway between M-Pesa and the mobile-based application. We built the mobile-based application using JavaScript, PHP and HTML5. The application is connected to a MySQL database that consisted of chamas’ information and financial transactions. The application is used as an interface to the system’s database. The interface allows chama group members to view group standings (i.e. group balance and members’ shares; request a loan; approve or reject a loan; and share funds at the end of a cycle).
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Stage 4: Transition to Scale

In June 2018, we pilot tested the system with seven micro-savings groups in Kisumu, Kenya to explore the feasibility of using it in these groups. Findings suggested that SmartChama could potentially improve financial transparency and accountability.

Focus Areas:

Social & Micro Finance, Financial Sector & Investment and Economic Empowerment

Social & Micro Finance, Financial Sector & Investment and Economic EmpowermentSEE LESS

Implemented In:

Kenya

KenyaSEE LESS

1
Country Implemented In
$4,600
Funds Raised to Date

Problem

Chamas are locally organized groups that meet on regular intervals to contribute funds that are given to members (via loans and emergency support). Chamas are important for economic development (accounts for 18% of Kenya’s GDP with over 50% Kenyans participating), because they provide capital to small businesses. However, chamas face challenges including lack of transparency and accountability, as well as members defaulting on loans. Yet, there are few initiatives to address these challenges.

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Solution

SmartChama addresses the problem by providing real-time access to group transactions for all members. Rather than relying on group treasurers (who mostly misuse group funds) to deposit and withdraw funds from banks, the system gives power to all members to contribute funds directly to their group’s account. Approved loans are also directly transferred to members’ accounts. All these transactions are accessible by all members thereby reinforcing accountability and transparency in chamas.

Target Beneficiaries

This innovation aims to serve over 20 million people participating in 300 000 chamas in Kenya. These groups mostly consist of women who collaboratively save money together to get capital for their small-scale business, pay school fees for their children as well as buy basic needs for their households. Previous studies have shown that chamas are widely popular across all 47 counties in Kenya and this innovation targets all people participating in these groups.

Mission and Vision

This innovation provides a digital financial system that is well aligned with collaborative nature of money management commonly practiced in Kenya. As of today, chamas use personal bank accounts where only two members have access to group savings. This breaks down transparency and accountability in chamas especially when the two members use group savings without all other members knowing. This innovation brings a new perspective on how financial systems should be designed to support chamas.

Planned Goals and Milestones

In May 2019, we will visit chamas who participated in our feasibility study to get further feedback on our innovation. We are also planning to start scaling up our innovation by recruiting more chamas to use it and use it for a longer period of time. We are currently seeking potential partners to collaborate with us to scale up our innovation. More specifically, we are looking for partners – international and local Kenyan collaborators – to provide grants to scale up the innovation.
Funding Goal100,000
Projected Cumulative Lives Impacted20,000,000
New Implemented CountriesKenya

The Team Behind the Innovation

The team is led by George Hope Chidziwisano, a Malawian currently pursuing a PhD at Michigan State University (MSU). George has collaborated with Rellika Kisyula (under 24 years old) and Martha Othieno – both Kenyan citizens. Rellika is pursuing a bachelor’s degree at MSU and Martha coordinate the team’s initiatives in Kenya. Their interest in this topic came from previous participation in chamas in their respective countries. The team is advised by Dr. Susan Wyche – associate professor at MSU.

EXECUTIVE TEAM INCLUDES WOMEN AND YOUTH

Milestone

Mar 2019
Recognition ReceivedPENDING
Feb 2019
Funds RaisedPENDING
$2,000
TITLETransition
TYPEGrant
FOCUS AREAS
Microeconomics and Human Centered Design
Implemented InKenya
May 2018
New Country Implemented In
Kenya
Apr 2018
Funds RaisedPENDING
$2,600
TITLEProject Implementation
TYPEGrant
FOCUS AREAS
Microeconomics and Human Centered Design
Implemented InKenya