Zoona: mobile money helping Zambia’s unbanked populace


What is Africa’s biggest problem when it comes to money and banks? Easy: in many parts of the continent there are large portions of the populace that are unbanked. The solution for this came a few years ago with M-Pesa, a mobile money solution that catered for Kenya’s unbanked population.

Fast forward a few years later and all across the continent similar solutions are popping up. One that has caught my attention is Zoona, a Zambian-based startup hoping to take the country cashless. At its core the service is a mobile money solution for both consumers and businesses.

It’s hard to ignore a company that has raised up to US$5-million in funding in the last year, with a big chunk of that coming from the Omidyar Network.

“We raised a $4m Series A round which included US$3.2-million from Omidyar Network and Accion Frontier Investments plus US$800 000 of converted debt from Sarona Asset Management and founder cash investment,” says Mike Quinn, Zoona CEO.

The majority of transactions in Africa are mostly on a cash basis. For Zambia it is even more so, with over 80% of its adult income-earning populace unbanked. And another 50% are not connected to modern communication technology, this for Zoona made the business important for the community.

According to Quinn, the startup offers “a range of products to move money electronically targeting Zambian individuals and organisations that move money and don’t like waste”.

“We work closely with both the development sector and private sector to build the Zambian economy and extend access to financial services to everyone,” says Quinn.

The company operates with several “agents” across the country where people can transact. All transactions are done via mobile and users receive confirmations with reference numbers via text message.

The company has also raised close on US$500 000 of debt finance from Grameen Foundation. And it has a US$600 000 facility with Kiva to provide financing for the services agents.

“We list our agents on Kiva, and then people from around the world can crowdfund them,” says Quinn.

A big problem with cash transactions the company reckons, is that transacting in cash can grind an economy to a standstill and that needs to be avoided in not just Zambia but Africa.

Zoona’s business model is threefold. One is developing a proprietary integrated switching technology, two building a distribution network on the ground, and three adding on consumer financial transaction products and services. The startup makes its money by charging a fee.

Integrated Switching Technology

Zoona has developed its own proprietary technology that enables its organisational customers to transact with their unbanked and unconnected customers. This technology provides two sources of value to our organisational customers says the startup:

Electronic Payment Solutions: Organisations across all sectors of the economy are able to make and receive large volume but low value electronic payments so that they don’t have to handle cash. This saves them money, reduces their working capital, reduces their risk, and provides them with much greater control over their operations.

Customer Data: Data from every transaction is captured in our system so that organisations can learn who their customers are and track their behaviour. This is currently impossible for even the largest corporations in Africa where cash and paper transactions still rule.

Zoona currently has 150 “Agents” in 57 towns in Zambia that provide transaction services for primarily unbanked consumers. These agents process over 150 000 cash in/out transactions per month (valued at US$7-million) for consumers sending and receiving domestic money transfers, purchasing direct top-up airtime, and receiving international remittances from Mukuru (one of Zoona’s partners).

In addition to that Quinn says Zoona also has “150 ‘Zoona Distributors’ which make mobile payments to Zambian Breweries for beverages (CocaCola and beer products). Current payment value is over $3m per month and growing quickly”.

The startup’s current main corporate customer is Zambian Breweries, a Subsidiary of SABMiller and the supplier of both CocaCola and beer products in Zambia.

“We also have a partnership with Mukuru.com for international remittances. We are in discussions with other corporates but nothing signed yet as we are focused on providing an awesome customer experience for our current customers before we scale more broadly,” says Quinn.

Though Quinn says the company is currently focussed on growing its Zambian market, there are possibilities of moving to other African countries. The mobile money game is highly contested in Africa with heavy players like MPESA and Nigeria’s Paga. Many startups wanting to play in this space are also cropping up.



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