Case Study - Premier Credit

The company:

Premier Credit Limited is a microfinance company established in 2013 to provide credit only financial solutions to small and microfinance entrepreneurs in East Africa. Established by industry veterans with over fifteen years’ experience, Premier launched initially in Kenya. The company’s successful growth is now seeing it expand operations into Uganda and Tanzania and Premier Credit now encompasses three different entities

Challenges:

Within the first year of its existence, Premier Credit gained over 17,000 clients in Kenya alone. It services them with 350 staff spread across twenty-two branches. With each client making a payment on average three times a month, today Premier is processing about 50,000 monthly receipts, and that number continues to grow. Around 80% of all payments by customers, today come in via mobile money through Safaricom’s M-PESA platform, with the remainder being more traditional bank deposits.

Daily reconciliation activities for Premier Kenya alone already amount to 1,200 mobile money payments per day, a proportion of which don’t get to their destination properly and need to be researched. Having experienced the effects of trying to do this manually in the past, Premier’s executive team recognised the need to put in place early on an automated platform. This would ensure the early detection of errors in posting receipts, and that all payments made by clients have been credited correctly.

Solution:

Knowing exactly what was needed to introduce a sound reconciliation platform upfront, the leadership team was introduced to ReconArt’s fully automated reconciliation solution. It quickly realised that the ReconArt™ Total Reconciliation Lifecycle™ delivers all of the capabilities required to address all the problems they had been fighting with for years in prior companies. Furthermore, by implementing the solution early in the company’s development, and confident in the ReconArt™ solution’s ability to scale significantly, Premier was able to avoid bringing on additional headcount to manage manual reconciliations.

The cloud-delivered ReconArt.net™ software-as-a-service solution was deployed to manage all Premier Kenya’s transactional reconciliations. As part of the daily matching of data, ReconArt™ pulls data from Premier’s cloud banking platform – Mambu, with externally sourced data feeds from Safaricom’s M-PESA platform for mobile money, Co-operative Bank of Kenya for receipts and Commercial Bank of Africa for disbursements. The matching process is extremely automated, as is the immediate identification of situations of operational risk, freeing users to investigate and resolve any exceptions quickly and efficiently.

Benefits of ReconArt ™:

By introducing ReconArt™ into its technology mix early on, Premier Kenya has already seen multiple benefits and returns that are only set to grow as its business expands within Kenya and across Tanzania and Uganda. These include:

• Automation and significant speed up of the process of matching
• Ensured accuracy of client payment allocations
• Reduced operational risk through the elimination of fictitious payments that could otherwise allow higher or additional loans to be issue
• Enhanced customer satisfaction through error reduction and the prompt resolution of the few that do occur
• Significant ROI. Based upon historical experience, Premier Kenya estimates that, to date, without ReconArt ™ this size operation would require 5-6 full-time equivalent employees just for doing reconciliations. Instead, the company achieves a better and faster process with just two employees who also have other functions and are not dedicated to reconciliations.

Summary:

The deployment of ReconArt™ for Premier’s Kenya operations has aligned completely with the company’s expectations. After an initial brief learning curve moving from a manual Excel-based environment, users today find ReconArt™ easy to operate. As a result, ReconArt™ will be next rolled out to Uganda and Tanzania companies.

Tim Carson, CEO of Premier Credit best summarises the overall advantages:

ReconArt™ gives us faith in the financial numbers we report by delivering accuracy, reduced operational risk and a fully auditable environment. An important added value is that it paid for itself almost immediately through significant cost savings of tasks that would otherwise have had to have been done manually.

Tim Carson