Zimbabwe’s PenFin offers financial services to the unbankable


Zimbabwean fintech startup PenFin is looking to do what larger financial service providers have failed to by providing insurance and remittances services to migrants and rural Africans.

Launched last year, PenFin looks to serve the unbankable through the use of mobile technology, allowing migrants to access a bank account, micro-insurance, loans and low-cost remittances.  

PenFin provides clients with a transactional account that they access through a prepaid debit card linked to an electronic wallet, which can be accessed through a mobile phone or via the internet.

The startup is also moving into funeral insurance, aimed at Zimbabwean migrants residing in South Africa, and providing them with funeral cover at a low cost.

“We sell funeral cover to migrants residing in South Africa, with a cash payment and repatriation benefit,” said PenFin founder Hillary Musarurwa. “We have partnerships with Zimbabwe-based service providers who take over the funeral within Zimbabwe to the place of interment. These partners provide comprehensive services that give our clients a dignified send off.”

PenFin is also in the process of launching loans and savings services, which will be made available for young Zimbabweans using a SACCO model.

“This enables youth to access a mobile-based account that enables them to save money as well as access small loans,” said Musarurwa. “The loans will mainly be short-term and will mainly be provided to those running small businesses. We will then introduce longer term loans as the business gains traction and these will cover the acquisition of assets such as land or machinery.”

Musarurwa is passionate about making financial services more readily available to migrants and rural populations.

“I was born into poverty, and have no regrets or excuses about that,” he said. “This lifetime exposure has made me vow to help others get out of it. I do not need anyone to try to define what poverty is to me, because I know it. I have lived poverty, I ate poverty, I wore poverty, I slept in poverty and I am still fighting poverty up to this day.”

He eventually found himself working in the banking sector, before losing his job after 15 years as the space started facing challenges.

“That is when it hit me that as long as I am working for someone I am just a disposable asset on his or her balance sheet,” Musarurwa said. “I then sought ways to put my skills to good use, and found myself revisiting the idea toyed around by my late friend, Regis Marawo.”

Marawo had challenged Musarurwa to stop furthering his studies unless he had plans to start his own bank.

“Was it plausible that something good could come from a poor young man who barely had anything in his account save for his retrenchment payout?” he said.

Not initially, no. Musarurwa spent more than three years trying to access a loan to start a designing company. It was these challenges that made his aware of the problems young people face when it comes to obtaining credit.

“I asked myself how many deserving youths were they out there who had also tried to access funding but failed. How many youth from rural Zimbabwe, who did not know the minister’s office, had fallen into the cracks? What hope could be given to the millions who do not have any jobs or access to capital?” he said.

Musarurwa launched the Practical Empowerment and Networking Youth Association (PENYA) with friends in 2008, which he said was more of a protest organisation against the failed government youth fund and a banking system that shut out young entrepreneurs.

Micro-financing was introduced into the PENYA project, eventually leading to the launch of PenFin as an independent microfinance institution. Initially, the business experimented with providing financial services to young people, but due to the lack of repayment of loans Musarurwa had to go back to the drawing board.

“It is at that juncture that I got a scholarship to study for an MPhil in Inclusive Innovations covering social entrepreneurship. I used that MPhil to develop PenFin’s social finance institution strategy for the next five or so years,” he said.

It has proven successful. PenFin has served more than 4,000 clients, with its agents registering an average of 400 clients per month.

“The rate of uptake can be increased if we can finance our community-based marketing exercises and reach out into more enclaves. Demand continues to increase as more Zimbabweans flock into South Africa in search for economic opportunities,” Musarurwa said.

There is certainly a market to be served. A 2014 study of Zimbabwean migrants residing in Cape Town found 82.7 per cent of them migrated to escape the economic situation in their home country, and 63.3 per cent of them do not have access to financial services.

Migrants in low paying jobs, meanwhile, fail to qualify for loans in the host country to secure housing, and fail to accumulate savings. PenFin is moving to address this, but the self-funded startup is looking for funding to speed its growth.

“We are actively looking for investors who can propel us further,” said Musarurwa. “Our next target is to raise a minimum of US$150 000 to fully commercialise our venture. The funding will be used to cover expansion costs and enable us to market our services to potential clients.”

He said PenFin was initially promoting its funeral cover product since it is less cumbersome in terms of legal requirements to launch.

“Whilst there are about 250,000 Zimbabwean immigrants who were documented under the Zimbabwe Dispensation Programme, there are a lot more undocumented migrants. It is estimated that there are more than 1.5 million Zimbabwean migrants residing in South Africa,” Musarurwa said.

“The number continues to rise as more people migrate in escape of the economic meltdown currently persisting in Zimbabwe. Soon we will be expanding to serve clients from Lesotho, Malawi, Mozambique and Swaziland.”


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Passionate about the vibrant tech startups scene in Africa, Tom can usually be found sniffing out the continent's most exciting new companies and entrepreneurs, funding rounds and any other developments within the growing ecosystem.

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