Card Pesa
Card Pesa
Covid 19 has presented challenges for our platform unlike anything we could have envisioned or prepared for.

We have therefore waited for guidance from our regulator on how to deal with these challenges that have resulted from the lockdown in terms of how it has affected clients and how it has affected our ability to provide the same level of service we had set out to provide for all clients on the platform.

Please see the guidance provided by UMRA below

Based on the above guidance and the need to be sure that we do not adversely affect the livihood of our clients at a point when many are not involved in economic activity we will be getting in touch with each client on the platform to determine how the lockdown has affected them before we advance credit.

Our role here would be to confirm that the details provided on the platform pre-lockdown are the same as post lockdown and that we are able to ensure that clients still have the capacity to meet their obligations on the platform as predetermined.

We are also not going to charge late fees for the period of the lockdown. We however will change our interest rates for all future advances so that the fund from which we advance credit is not too adversely affected by the loss as a result of this action.

We are aware that many would like to get advances during the lockdown. Our belief is that as soon as the lockdown is over and each client can assess what their working capital needs would be would be the best time to access credit and restart automated lending.

That is what we are preparing for and we pledge to fund recovery as soon as the lockdown is lifted.

Stay Home and Stay Safe
Card Pesa
Card Pesa
Its during times like these that we focus on why organisations like ours have to survive and thrive.

As a result of the current worldwide pandemic what is clear is that the movement towards digital banking and transactions in an era where a virus can be spread through use of cash is ever so crucial

We at Card Pesa will continue to service all clients who are on our platform and will grow it to meet the challenge the current situation presents for us and our clients.

Stay safe. Wash your hands
Card Pesa
Card Pesa
The value in Credit Automation

Card Pesa is a platform that is built on the idea that as more and more individuals get access to online platforms and get the ability to trade or carry on transactions on digital platforms then the greater the need to automate credit to facilitate those transactions.

The need for credit stems from the notion that any person or business that is involved in a growing enterprise needs to be able to produce more products and/or services in the future to meet its market than it does today.

Businesses therefore need to find the funds that they utilise to produce more tomorrow so that they earn more than they did today. Which is the quintessential definition of growth.

Credit is the secret that makes that possible.

The question therefore becomes what type of credit should an enterprise take and what should it cost as compared to what the enterprise is going to earn.

The answer to that question then informs and enterprise or individual involved in economic activity whether they are taking good credit or bad credit.

At Card Pesa it is our role as a credit provider to help clients understand how credit can be used to enhance their livelihood and as much as possible use our systems to get clients to take good credit.

Simply stated good credit is credit whereby the returns from the earnings from the use outways the cost of the advance which means the client makes a profit from the utilisation of the credit.

With the point that credit should be used to enhance earnings it therefore follows that the access to credit should be timely and efficient so that the client who needs the credit gets it when they need it in time to take advantage of the opportunity for which the credit is needed.

One of the most painful parts of accessing credit from a traditional financial institition is the time it takes from the point you request for a facility to the point you receive the funds.

It is not uncommon for funds to take upwards of 2 to 3 months to receive a facility which although cheaper in terms of interest rates paid may be more expensive in terms of time taken and costs of processing.

We at Card Pesa see the flaw in that model and appreciate that in the digital economy where enterprises operate 24 hours a day or emergencies dont only arise during working hours, our clients need to be serviced in real time and that is why we have built an automated platform that provides credit at whatever time it is need for our enrolled clients.

We therefore charge a subscription fee for our service under the premise that once you are our client and have subscribed for the year then whatever level of credit you qualify for should be availed to you automatically in less than 30 seconds from the time you request it day or night to ensure you can meet that obligation at the most opportune moment in order for you a maximise return on credit taken.

Though our credit lines may be seamingly small in comparison to scale of some businesses what our platform is designed to look out for is the monthly disposable income of the individual and business that they will have after transacting from which they pay for the amounts advanced.

Once that amount is determined then the platform adjusts accordingly to provide our members with automated affordable credit that allows them to grow which is our ultimate goal and why we believe that the future need for our service can only grow with the growth of technology and information age.
Card Pesa
Card Pesa
A system that keeps The Rich Rich can only be changed if more ordinary people are provided access to credit.

We have noticed articles in the newspapers that say the Central Bank is not happy that Commerial Banks have not reduced their lending rates even with the lowering of the CBR. (Central Bank Rate)

We wont claim to be Economics Czars but from our laymens view the problem of interest rates is not around what the CBR is but rotates around the fact the fewer and fewer individuals have the basic requirements that banks will ask for to provide one with a loan.

This means that because of the rules, only a small portion of the populace can take bank credit and so for the banks to break even they have to keep their interest rates high.

Basically in Uganda to get a loan from a commercial bank you will have to have either collateral or hold a contract/lpo that gives the bank comfort that they will be able to recover their money come- what-may.

Now even if you have the highest value collateral, a bank will not give you a loan if they cant calculate with a high level of certainty that from the economic activity you do, you will earn enough gross profit to cover the monthly repayments of their loans.

This essentially means that only people who have already been in business for a while and amassed a level of collateral that outstripes the value of the financing they need can get more financing.

So if you are Rich now, and you have already been earning revenue, then you are the perfect person to walk into a commercial bank and pick up more money to do more business.

That is why a certain class of people who have held real estate and have enterprises which span generations keep getting rich in this country whilst the rest no matter how brainy or innovative will never have businesses that take flight.

That also means that the older you are, the more likely you will have access to financing, yet when older, you are more risk averse and do not have as much energy and cutting edge knowledge to bring new ideas to the market, test them fail and try again.

We therefore need to come out with ideas that change this system for many old wealthy men and women are dying with wealth which would have been better utilised or grown if it could find its way to the young capable hands of well educated and exposed youth to multiply it.

So our philosophy at Card Pesa is to strive to identify young budding entepreneurs and enterprises that we can fund through selection after funding as many individuals and businesses as we can so that we can find the diamonds in the rough.

To increase (democratise) credit we will start by cutting out the need to have collateral which makes the enterpreneurs work twice as hard to get credit by first amassing collateral then demonstrating cashflow and we make them focus on generating cashflow to meet the needs of the business as our focus.

When we have a critical mass the volume in our portfolio will then be the collateral that any financier will require to provide cheaper rates which we can then use to lower the rates we charge our clients and in so doing make it possible for people who were not born Rich to have a fighting chance of getting Rich.
Card Pesa
Card Pesa

After running the platform for 264 days and analysing the data about client performance we have come down to the notion that the most important aspect about determining credit limits/levels is to determine the Character of a borrower.

On our platform the indicators of what the character of a client is can be seen by who the client uses as a guarantor, next of kin and workmate as if any of those are on the platform their performance would reflect on the new client. Our belief that "birds of a feather flock together" still remains ever so true.

Other indicators about a clients Character is demonstrated by the ability to respond and communicate with us when there are changes in their ability to meet obligations. We have found that those who communicate when they will not be able to meet their payments on dates specified are clients with better character which we reflect with better terms.

Please note that though we say we provide working capital loans we are not saying we will fully capitalise a business. Our loans are not designed to buy stock for a big business as that would require a more detailed understanding of the cashflows of the business, clientele, business environment etc for which our current system is not designed to cater for.

So in simple terms the type of working capital we refer to is the small amounts that would cripple you as a worker or a business that come in handy at a point when you would suffer bigger loses if you couldnt raise.

One of our clients gave an example of running a construction company in which they do projects in hard to reach remote areas and from time to time they find challenges buying food for their contactors from the villages they operate in as well as provide small transport refunds or buy small tools or implements to complete small tasks. These relatively small amounts of money could be expensive in terms of time and effort to get and may be urgent and those are the kind of working capital requirements we would like to meet and help client sort out.

So when a client who understands the service says that whilst everyone is looking for the highest amount of credit they can get it is important to also understand that "Small Money Has a Lot of Power" and that is the space we would like to operate within.
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