JALI Finance presents a very interesting case example of an entrepreneur that is keen on delivering value to its customers. Maybe more important is that JALI is focused on delivering value to a client segment that is often un/underserved. Not all entrepreneurs are the same and many people in Rwanda (and around the world) often feel compelled to start a business as a way to access cash for their family’s needs. In contrast, as the story below outlines, JALI is on a mission to innovate financial services for initially lower-income clients that want to buy a motorcycle as a way to generate income, but with an intension to widen it's product offerings for other low-income customer segments. From a market systems perspective, JALI provides an example of the type of entrepreneurs that market systems should be catalyzing in larger and larger numbers.
Driven by their mission to promote impact for consumption of Rwandese products through credit, JALI Finance is a local start-up financial institution that offers an innovative lease-to-own program for motorcycles. By employing an approach that focuses on alternative measures of loan approval (beyond credit and collateral), flexible funding options, and affordable repayment terms, JALI has been able to unlock a previously underserved client segment -- young jobseekers in Kigali, who often migrate to the city from rural areas in search of greater opportunity, but who most often lack the financial literacy & resources to access products from a standard financial institution. The moto-leasing program has a cross-sectoral impact on the Rwandan economy; through expanding the number of moto-taxi providers, JALI is enabling transporters across value chains greater means & opportunities to perform their business activities, contributing to the agribusiness sector & beyond.
When the first case of COVID-19 hit Rwanda in March of 2020, and the country entered a national lockdown to combat the virus, motorcyclists across the country lost their source of income. One of JALI’s swift responses to the pandemic was a pause they placed on their loan repayment programs, offering drivers a much-needed reprieve. As infection rates in the country continued to decrease, and the government began easing travel restrictions and re-opening the economy, JALI followed, and was able to manage the economic shock of the pandemic without losing much business.
With demand for motorcycle financing far outpacing what JALI Finance is able to supply currently, JALI continues to seek additional financing to both expand current and new client segments. For example, the moto-taxi industry in Rwanda is a heavily male-dominated profession, and JALI is looking to expand their product offerings to target women looking to enter the field. Additionally, JALI is partnering with Ampersand to offer made-in-Rwanda electronic bikes among their leasing products, which will contribute to reducing CO2 emissions. Furthermore, JALI is keen on creating more packages focused on other products, such as consumer loans to finance products such as insurance, fuel & electricity.
In addition to working toward expanding their product offerings and client segments, JALI is also focused on increasing the sophistication of their internal business practices. Most of their advertising and marketing measures are driven by existing customers, through word of mouth testimonials and personal referrals through friends and family networks. Given this, JALI is looking to build & employ a scientific way to track customer satisfaction. Such a tool is essential for growth-oriented businesses that are, in large part, defined by a commitment to deliver value back to their consumers.
JALI aims to grow through new product lines, accessing new client segments, and by leveraging current loyal customers. To help fuel these plans for growth, investment is needed. In 2019, through the USAID Rwanda Nguriza Nshore Project JALI began working with a transaction advisory firm with offices in Kigali, BiD Capital Partners. Although JALI had successfully received investment financing in the past on their own, through their partnership with BiD and other advisors, they have been pursuing more, and larger, offers for investment. As Felix Nkundimana, CEO of JALI says, “When you dream to build a financial institution, it’s really something big enough to always be in need of financing. I don’t see us ever in a situation where we say, ‘Oh, today we don’t need any investment.’ I used to tell people, ‘Even big banks are still always looking for investment.’ So, when we look at the investment, we look at almost everything. By ‘almost everything,’ I mean our business can work well with loans, grants, & equity.” This sentiment exemplifies JALI’s commitment to grow based on the value they deliver to their client segments that have been historically un/underserved. JALI’s openness to find the best type of investment for their company and their customers is critical to achieving their longer term growth objectives.
JALI’s vision for the future is inspiring -- through their continued commitment to reach and deliver value to underserved populations in Rwanda, as well as their hunger to expand their operations and product offerings through external investment, JALI recognizes their potential for growth. With sights set on transitioning to become a pan-African digital bank one day, nothing is out of reach.
Written by the Feed the Future Nguriza Nshore Team
By the Nguriza Nshore team
The financial systems change wheel was developed to help the Feed the Future Nguriza Nshore staff track a more comprehensive set of factors influencing how the financial service market systems functions. Through the use of the wheel, the Nguriza Nshore team has been able to see how the EDP’s implementation is more important for increasing the inclusive growth potential of entrepreneurship in Rwanda than having a perfect written policy that never gets implemented effectively. Further, the wheel is helping the Nguriza Nshore team see how changing the banking and microfinance services also entails other interconnected systems. The wheel is also helping the Nguriza Nshore team track its progress towards systemic change.
Feed the Future Rwanda Nguriza Nshore (Nguriza Nshore), a project funded by the United States Agency for International Development (USAID), has been grounded in systems thinking from the start. The three project components, for example, are also interconnected and interdependent. Credit based finance is important, but not sufficient to catalyze a growing inclusive economy, so mobilizing private capital is also essential. At the same time, bank finance and private capital cannot effectively allocate financial resources if the rule of law and policy environment remain uncertain or highly biased against clear, consistent, and transparent rules of the game.
The Nguriza Nshore team realized the importance of the interconnectedness but did not have a way to define and highlight interconnectedness. As a result, the team, in concert with EcoVentures International, developed a financial services system change wheel (finance wheel). Based on the agricultural market system change wheel published by USAID, the finance wheel provides a graphic representation of the system and its interconnectedness. The team is using the tool to track their activities against wider systemic forces and dynamics allowing the team to adapt more effectively to emergent threats and opportunities. The finance wheel also provides a normative pathway to self-reliance that the team can use to gauge where momentum is growing and where change has stalled or needs more support. The combination of defining interconnectedness and a normative pathway gives the team an important tool in managing how best to work in and across their components.
View a draft of the Financial Services Market Systems Change Wheel below.
The MSDHub Blog Series is authored by respected implementers and donors of market systems projects globally.