Mukuru says Deposit-taking Microfinance licence will lead to cost savings passed on to you

A few days ago, the Reserve Bank of Zimbabwe issued a notice saying Mukuru had been awarded a Deposit-taking Micro-finance licence.

Mukuru has now released a press statement, telling us about the development and what it could mean for the company.

Mukuru highlights the potential to uplift communities by enabling secure and inclusive access to financial services, encouraging the adoption of digital solutions, and supporting economic growth for over three million loyal customers.

What caught my eye was the statement that “Cost reduction benefits to be felt by SMEs, women, youth and rural communities.

How would that licence lead to cost savings. We can expand in what they gave us.

1. Direct Handling of Deposits:

Mukuru can now accept and manage deposits directly rather than relying on intermediaries (e.g., banks), reducing fees associated with third-party services.

2. Streamlined Operations:

With the licence, Mukuru can offer a wider range of financial services under one roof/kiosk, such as savings, loans, and digital payments. This reduces reliance on multiple service providers and lowers operational costs.

3. Eliminating Travel Costs:

Customers, particularly in rural areas, can access services digitally instead of traveling long distances to physical branches or agents. This reduces logistical costs for both customers and Mukuru.

4. Cheaper Credit for SMEs and Individuals:

Mukuru can provide loans at lower interest rates since it can use customer deposits as a funding source instead of borrowing at higher rates from other financial institutions.

They say these factors, and more, collectively allow Mukuru to pass on the savings to its customers, making financial services more affordable for underserved communities.

Here is the press statement in full:

Mukuru’s awarding of DTMFI licence – a boost for financial inclusion in Zimbabwe

Next-generation financial services provider Mukuru has been awarded a Deposit-Taking Microfinance Institution (DTMFI) licence in Zimbabwe. This important achievement enables Mukuru to expand on its mission of driving financial inclusion in the country, especially among underserved groups such as SMEs, people with disabilities, women, youth and rural communities.

Mukuru’s Group CEO Andy Jury says being awarded the DTMFI licence is a significant milestone for Mukuru because its mission aligns perfectly with Zimbabwe’s National Financial Inclusion Strategy, which is spearheaded by the Reserve Bank of Zimbabwe. “We are excited to leverage our extensive network and digital capabilities to further empower underserved communities – particularly SMEs, women, youth, people with disabilities and rural populations – and drive greater financial inclusion across the country.”

Jury says Mukuru is uniquely positioned to bridge the gaps between formal and informal financial services in Zimbabwe by unlocking new economic opportunities through the provision of innovative financial products that enable people to send, store, spend and potentially borrow with ease. “Relevant financial inclusion depends on the uptake of products and services. To this end, Mukuru’strusted brand and reputation as a reliable financial services provider is expected to support the building of customer trust and drive the adoption of digital offerings,” explains Jury.

Financial inclusion in Zimbabwe is at its lowest in rural areas, where 63% of the population lives.Mukuru, which has been part of Zimbabwe’s financial services landscape for the past 20 years, serves over three million loyal customers. Its trusted and extensive network, with digital capabilities, has 250 owned access points, with 40% of these in rural areas. In addition to this, it has more than 500 partner access points available across the country.

Mukuru Zimbabwe Financial Services CEO Doug Tait-Knight says meaningful financial inclusion uplifts communities by enabling them to access financial services and enter the mainstream economy.

“DTMFI service offerings cut out travel costs and enhance secure and inclusive practices as money does not need to be collected. Currently, more than 90% of people who receive remittances cash them out and so we are well-positioned now to help them along their digital financial inclusion journeys. Our DTMFI licence will enable us to deliver innovative digital solutions that address the specific needs of our customers, from those in wheelchairs who struggle to access cash from ATMS, to small business owners seeking to grow their enterprises. We are delighted that our strategy aligns with the national financial inclusion strategy,” he says.