Author Archives: Poraeh Investments

The Money Transfer Journey

14 Jun 18
Poraeh Investments
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Slightly over 10 years ago, when someone said they needed money, the process of them getting it to them was tedious to over 50% of the population. With more than 70% of the population being unbanked, some had to travel more than 5 kilometers just to have access to money transfer. Belonging to an institution that required you to deposit money in a bank also meant wasting a few hours while standing in a queue to complete a deposit transaction. The risks we had to take to get money to our loved ones in different parts of the country would make you break out in a sweat now.

Necessity being the mother of invention kicked in and, in 2007 everything changed. We could now send money to each other using our mobile phones. More than half the population got on board with being able to send money to our loved ones, safely and conveniently. Over half of the unbanked population now got on to a formal alternative of sending and receiving money. A mobile money distribution network grew, big enough to rival all others, reaching out to the furthest and most remote places.

Banks found themselves with competition from an unlikely source. They had to find ways of tapping into the large percentage of the unbanked, keep the individuals already in the banking ladder happy and use the mobile phone penetration growth to their advantage. In walked Mobile Banking. Branch-less banking was born; bank account access was put in our hands. Mobile banking joined up with telecommunications money transfer platforms and we could move money from our bank account and send it to any unbanked individual via mobile phone.

A few years and a greatly innovative team of people later, we are able to pay bills and make purchases without having to carry large amounts of money around in our pockets. E-commerce gained momentum, and now we shop from home, work, on a bus…. and simply wait for the goods to be delivered. Small businesses stopped worrying about having too much money on hand and risking theft.

With access to money becoming faster, cheaper and more convenient, demand for credit services rose. Mobile lending platforms granting unsecured loans rose and gave a supply chain to this demand. We can now access lending from our mobile phones. Small business owners now had fast access to credit capital that could help them grow.

In recent years, we have had great leaps made in Fin Tech. We are crossing borders and making international money transfer easier. We are reaching out to our loved ones on different continents and making it easier for them to send money home. We are giving our country men and women in the diaspora the ability to pay their/their loved ones’ bills from wherever they are, comfortably, fast, conveniently and securely.

The future looks bright and there is no limit to how innovative we can become. Ideas that help people grow themselves and their business have great potential of growing big overnight.

The Founder

24 May 18
Poraeh Investments
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Herbert Rajula with years of experience and expertise in the financial and banking industry, founded Poraeh Investments in 2013 as an answer to mobile money transfer in Kenya.

His interview with Africa Business Communities:

What is Poraeh Investments?

Poraeh Investments is an early stage, single cashless mobile financial platform offering a cost efficient suite of transaction processing, switching and mobile payments for Africa by Africans. Letting people send money at the lowest possible true cost using only real exchange rates and little not-hidden-fees. Poraeh Investments is about averting headaches and igniting a revolution.
Our Offices are in Muchatha, Kiambu, Kenya.

In what industry does Poraeh Investments operate?

We operate as a financial service Company carrying out money transfer services. What makes us particularly interesting is that we are a mobile platform bridging the financial digital divide whilst creating a cashless ecosystem on the backbone of a strong retail orient for service distribution across the continent.

What is your business background pre-Poraeh Investments?

Prior to launching my company, I worked in commercial and sales management, primarily in the banking and real estate industry with a focus on business development and product revenue streams. I have also project managed marketing and sales campaigns in the retail industry.

Why did you start Poraeh Investments?

I was initially inspired by Kenya’s remittance card NationHela that I headed and when it was time to move on, I got The Executives to draft me an exclusivity contract to keep on pushing the product to the market. I tried to sign on a sales company to assist with the distribution and they attempted to cut us out. This led me to start thinking of ways in which I could own the product not to be shortchanged. I wanted to share revenue with the amazing product whilst creating employment. So being an ex-banker, I started to develop the thought more and it ended up being an App, to help reduce the cost of services that our continent’s people require. I approached various banks with the idea and was not greeted with much enthusiasm.
I have been persisting with the development process for a year now and during this period, I am more convinced every day of the opportunity for money transfer services to connect with their target market via mobile. The mobile industry mainstream is exploding with apps becoming more everyday tools. Simultaneously, the money transfer market is growing but one of the biggest challenges faced by individuals is the exorbitant cost of transfer through seen and hidden charges.
I believe this app is the answer to connecting demand (end consumer) and supply (vendors) cost effectively and conveniently.

Who owns Poraeh Investments and how is it financed?

I am the sole owner currently and the company is self-funded up to this point via a mixture of private capital from myself and family, through the 1 year spent developing the app. At the moment, the funds derived from the above sources have been adequate for our needs, but for future growth, we are putting a great deal of effort in attracting outside investors. Currently we are building a prospectus to raise funds for up to 25% stake of the business.

How would you describe the Startup Environment in Kenya in terms of support provided by the government?

The number of entrepreneurs springing up is rapidly growing with the flagship Uwezo fund program launched by the president to assist women, youth and persons with disability access finance. The execution is not as effective as it could be with the process for obtaining funding swaddled in red tape. Also, as entrepreneurship is by nature risky, government funding focuses largely on asset based businesses with service industries not as likely to be successful in obtaining support.

How effective is crowd funding as a tool for startups in Kenya?

Crowd funding is part of our heritage in Kenya, having been started by our founding President Jomo Kenyatta under the culture called Harambee. Harambee depended first and foremost on family networks and then friends. The general public is the last resort for anyone starting a business to go to as the culture education level on the concept is low. This difference greatly impacts the propensity to give, how often one gives, as well as the approach for requests for help.

What can Poraeh Investments do that other companies cannot?

Nobody else in the mobile financial space is currently doing value added service for the remittance receivers in Africa, with perfect ease of accountability, at low unhidden fees. We have the ability to combine low fees, ease of use, speed and accountability, which is something that other players seem either unwilling or unable to do. We have an excellent team with years in finance and operations compliance. With no capital we have managed to negotiate our position and are putting the final touches to our stage one milestone.

What does Poraeh Investment need to be able to grow?

Where we are currently, we require funding to finance next level growth and go to market strategy. As a mobile App bringing together agents, merchants and the targeted end consumer, we need to continuously attract new vendors through various channels and make end-users aware of the service.
We have in our sights incorporating other plugin services into our business model to more effectively reach out to clients across the continent.

What are your ambitions in terms of (international) markets and growth?

The business model we are creating is very ambitious, in that we expect rapid expansion to other countries (in the first year of launch, possibly 12 countries simultaneously). Exciting changes coming up include a number of new partnerships that will see Poraeh Investments becoming an even stronger contender in the African money transfer and financial market. Before End-2015, we will launch our platform App. Let them look out for our flagship product.

What would you like people and companies who read this interview to do?

  • To download the app via Google Play or the App store (Apple) and check out our website to learn more.
  • For vendors, partner up with us for better and faster services to your clients, and also to grow new customer base.
  • For merchants, a chance to grow your business by tapping into a new market through our platform, so register online and we will follow up.
  • For users when we launch the app, download it, use it, and spread the word!
  • Investors, get in touch to discuss how to get involved. We are growing fast and this would be the best time to come onboard.

By Andrea Ayemoba

Africa CEO Forum

24 May 18
Poraeh Investments
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There are issues that make this a tricky question. First, that the African bank can truly hold its position in the region’s progress, where we have seen only a few jumping ahead of others e.g. Equity bank. Secondly, the failure to realize the huge opportunities presented by the region’s diversification demonstrated (M-Pesa, Kenya) and MTN, Nigeria) gap to tap into and customize solutions, which address the need for the different target groups (i.e. SMEs, youth and startup). Thirdly, innovation and lack of the creative support structures are another part. So I will try to expound on the observations highlighted above.

My take on African banks is that they are doing well in stretching their reach to more African countries (a recent case being Equity Bank acquiring a bank in Congo). Are they ready to compete with the rest? Not so sure. Ok but doesn’t that then say they will be swallowed up by the prepared ones? I don’t think so; the banks have mastered the business dynamics in Africa and are better equipped to survive here than foreign ones. But I think they’re ready to compete amongst themselves in terms of expansion.

As for promoting development, very few African banks have offices outside the continent and those could be challenging markets to venture into and until they’re ready to provide greater access to credit at lower rates, they remain self-serving, profit making machines. That then raises the question, isn’t it supposed to be so? Yes, but even customer centric products and tools should be a focus, and then they can reach their self-serving goals. Far be it for our banks to offer credit at lower rates and still make a profit; this is just not in their interest. Lower rates would mean greater access to their products for people (growth). But they all seem to focus on seeing their banks accumulate enough deposits to be able to fund mega projects coming up in Africa without external support, and this also they are not executing well. A starting point could be syndicating loans for the mega projects like the LAPPSET project (Kenya) before building the individual capacity to take-up such ventures alone.

Access to credit is a major contributor to development and business. What would make them change the mindset currently held and who can spearhead it? It’s a culture that works for the banks, not for the ordinary mwananchi (citizens). That’s why banks like Equity that allowed ordinary people access changed the game and the industry but it was not sustainable, hence they changed their tactics mid-way. You can’t discuss banking and economic development without discussing access to credit.

By Andrea Ayemoba