Ghana’s Sikasem Africa Banks on Financial Inclusion for MSMEs in Rural Africa

GHANA – While working in the banking industry, Charles Mensah who worked as a customer support personnel and Kojo Nkrumah Quainoo, a retail banking professional, witnessed the problem of financial illiteracy in Ghana’s informal sector from different perspectives. Charles noticed that most of the customers especially those in the informal sector struggled to understand basic finance like interest rates, savings account and other banking information. On the other hand, Kojo saw how small business owners struggled to access loans and other credit facilities because of inadequate and unsuitable documentation to support their loan requests.

In their quest to create a platform that will allow communities of informal workers make informed financial decisions, in 2016, Charles and Kojo created Sikasem Africa, a social enterprise that is committed to providing a complete financial services value chain for micro-businesses in Ghana. Sikasem is a Ghanaian word, meaning “financial matters”.

Sikasem Africa services over 400 small business owners in Ghana, using mobile technology to educate them in different local languages. Photo Credit: Sikasem Africa.

“We do this by first interacting with these businesses through financial literacy outreach programs and providing a platform for them to access loans for their businesses,” says Charles.

The duo also realised a need for a more structured approach that moved away from one-off outreach programs to a fluid relationship with participants, hence the decision to employ mobile technology in dissipating relevant and tailored financial information. In addition, they have set out to use alternative credit scoring to complement the traditional credit appraisal process and eventually help micro-businesses to secure affordable loans from the financial institutions.

“Having interacted with them (business owners) through our financial literacy outreach programs on a regular basis, we are convinced that an enabling business environment will go a long way to help the nation’s pursuit of all-inclusive growth,” Charles explains, adding that easy access to affordable micro-credit is a great starting point for every country that desires to use micro-businesses as a poverty-eradicating vehicle.

Potential Growth

Sikasem Africa was launched with the founder’s personal savings and a $5000 from the Tony Elumelu Entrepreneurship Foundation.  Its services are directed at micro, small and medium enterprises (MSMEs) and financial institutions.

In the beginning, the challenge was getting people to believe in the project. “Getting micro-businesses was also a challenge because most of them are not formally educated and are yet to fully understand what we have to offer,” Charles says.

“It demoralised us at some point but we were determined to push on and kept the vision in mind. We now leverage on local government authorities to provide our service to them.”

So far, Sikasem Africa services over 400 small business owners in Ghana. These business owners are undergoing financial literacy through the SikasemMMS product, where it uses mobile technology to educate them in different local languages.

“Our short to medium term goals is to take Sikasem’s financial literacy program to other regions in Ghana and to reach 2000 beneficiaries by the end of the year,” Charles reveals. “We are also working towards being the prime financial education facilitator in Ghana.”

Sikasem Africa team and participants after a financial literacy workshop in Ashaiman, Ghana. Photo Credit: Sikasem Africa.

“We are proud of our identity. We feel good about defying the norm and choosing a local name that resonates with a lot of our target customers. Sikasem is a word almost everybody in Ghana understands. We are also super proud to be Africans, especially at this time where Africa is on the brink of achieving her full potential. Our problems only mean innumerable opportunities for growth, and as contributors of Africa’s development there are not a lot of things we’ll trade this feeling for.”

Financial Inclusion

To Sikasem Africa, financial inclusion means using financial services to solve social problems. It is from this standpoint that it developed its core mandate of facilitating a complete financial services value chain for micro-businesses. This value chain hinges on knowledge, access and usage.

“We use our outreach programs to improve financial literacy and connect beneficiaries with financial service providers via MMS and CreditLocus, products we like to refer to as the UBER for financial services in Ghana,” Charles elaborates.

So, how does Sikasem Africa see financial inclusion achievable in rural Africa in the future? Charles replies, “Rural Africa need solutions that do not require internet and as such mobile-phone-enabled offline services will be of tremendous help to them. With some funding, the proverbial light at the end of the tunnel will definitely get brighter.”