Kenyaâ€™s micro-finance institutions are set to access core banking software without the need for huge financial investments following launch of a model where clients can access the software on a pay-per-use basis.
The launch of the cloud-based platform by Swiss-based firm Sofgen would allow micro-finance institutions – including non-bank financial institutions, credit unions, co-operative banks, building societies and smaller banks â€“ the ability to utilise a secure core banking system on a shared model accessed on a pay-per-use basis.
The cloud-based software â€“ Temenos T24, which runs on Microsoftâ€™s cloud platform, Windows Azure) â€“ has been built to enable client financial institutions run the technologies they choose while only paying for what they consume and further does away with the need for an operating system.
Tunde Oladele, Sofgen Africa chief executive officer told BiztechAfrica that micro-finance institutions are faced with increased cases of fraud due to non-robust IT systems and infrastructure due to high acquisition and deployment costs involved, adding cloud-based services and solutions are more cost-effective and allows clients to benefit from the consumption-based pricing model.
â€œSofgenâ€™s cloud platform offers SME banks and microfinance institutions a secure system that can be shared and paid for on a pay-per-use basis. Because they focus on a specific market segment, microfinance institutions have special needs and therefore require customized core banking systems,â€ said Oladele.
Oladele said Sofgen has partnerships with firms that provide instruments that enable banks and other microfinance providers manage risk more effectively, with a client portfolio of over 30 financial institutions from 12 countries in Africa. In Kenya, the firmâ€™s clients include among others KCB, CBA, K-Rep Bank and Kenya Women Finance Trust.
The Temenos T24 cloud-based banking software solution, added Oladele, is comparatively cheaper as no operational expenditure and annual license fees to maintain and support continuous investment are required from the client, with the only charges being the annual subscription and on-boarding fees.
The launch of the Temenos T24 cloud-based software for MFIs by Sofgen comes when the industry is faced with rising cases of online fraud, with a recent research byÂ Deloitte East Africa indicating that East African banks lost Sh4.05 billion to fraud in the last 18 months, up to June 2012. The East Africa region recorded a 25% rise in fraud incidences, compared to a similar period up to 2010.