Empowering the informal sector: Zaka's revolutionary solution at the MTN MoMo API Hackathon

MTNSA Chief Financial Services Officer Bradwin Roper with the winners of the MTN MoMo API Hackathon. Picture: Supplied

MTNSA Chief Financial Services Officer Bradwin Roper with the winners of the MTN MoMo API Hackathon. Picture: Supplied

Published Dec 13, 2023


In a momentous event that celebrated innovation and the future of mobile money, Zaka emerged as the triumphant winner of the MTN MoMo API Hackathon, securing a prize of US$5,000.

The essence of Zaka's victory lies in their groundbreaking solution that transcends traditional payment processing, offering a transformative approach to cashflow financing in the informal sector.

Siya Ntutela, Zaka's Chief Commercial Officer, shed light on the revolutionary nature of their winning app, emphasising its role as a digital lending platform for merchants operating predominantly in the informal sector.

By leveraging MoMo as a bridge, Zaka aims to replace traditional banking methods for merchants.

One of the app's standout features addresses a common pain point for merchants with Point of Sale (POS) machines. Traditionally, settlements from banks or service providers take 24 to 48 hours and don't occur on weekends.

Ntutela explained, "We are alleviating exactly that problem where we are taking that away and paying you in real time, instantly. No questions asked."

Zaka's solution empowers merchants by allowing them to access their POS revenue instantly, enabling them to use their funds without any delays.

Beyond instant payments, Zaka's vision extends to providing credit for the informal sector.

Ntutela explained, "We also underwrite the client. Basically, you trade with us for three months, and after three months, we can say hey, you qualify for a small loan."

This innovative approach to credit extension is poised to make a significant impact in the informal sector, where access to credit is often limited.

Ntutela emphasised Zaka's commitment to grassroots inclusion, targeting entrepreneurs such as those running Shisanyama’s in open velds.

He stated, "We are really talking about inclusion and including these entrepreneurs which the large banks will not finance."

Zaka's unique advantage lies in their deep understanding of the informal market, derived from prior experience operating in this sector.

The inspiration behind Zaka Money stems from the challenges faced by informal merchants, especially during the pandemic.

Ntutela shared, "What inspires Zaka money is the fact that every time I visit home, or visit the rural areas and townships, I have to carry cash around. For me, that is problematic."

Zaka envisions a future where digital cash mirrors real cash, providing efficiency and empowerment to merchants.

The partnership with MTN proved instrumental in Zaka's journey. Ntutela expressed gratitude for the support and described the experience as incredible. He highlighted the importance of financial literacy and how Zaka's app facilitates an easy process for users, gradually educating them on the consequences of their transactions.

Despite challenges in winning the trust of merchants, Zaka's focus on credibility and problem-solving prevailed. Ntutela acknowledged the financial pressures faced by traders in townships and rural areas, emphasising Zaka's commitment to being part of their journey towards prosperity.

With the winning prize, Zaka plans to conduct a proof of concept, marking the beginning of a promising partnership with MTN.

Zaka's victory at the MTN MoMo API Hackathon not only signifies their innovative prowess but also serves as a beacon of hope for the future of financial services in the informal sector, where empowerment and efficiency intersect to create lasting impact.