By Gitahi Ngunyi
@gitahi_ngunyi
Financing acquisition of over 500,000 motorbikes, and tuk tuks within a period of nine years as digital asset firm Watu Credit has done since 2015 is an enviable achievement. This is translates to about 55,555 loans per year making it the biggest motorcycle financier in East Africa by volumes ahead.
However, this is not the bigger story because, with just one misstep, all that success can go down like a house of cards. The bigger story is how Watu Credit has built itself into a fighter brand that has a thick skin to stand in the face of the fiercest and virulent attacks.
The firm’s success in its line of business was always going to attract a war because it has disrupted the way of doing business and ran away with the prize.
But recent events in the company’s history show that the firm was prepared for the fight when and it came. From the onset, the firm built a robust system that entrenched the critical values of building trust and transparency such that it has turned out to be the firm’s strongest defence against attacks on its reputation.
The wisdom of the decision to build such a system has been severely tested since November last year when claims started circulating in online platforms to the effect that the firm was colluding with organised motorbike theft gangs to steal bikes it had financed.
A key component of the firm’s system the strong client protection system that has won the firm international recognition and wowed members of parliament.
Recognition
Earlier this year, the firm subjected its client protection system to certification evaluation by international microfinance rating agency, Microfinanza Rating (MFR). After a thorough inspection of the finance, MFR certification committee awarded the firm’s subsidiaries in Kenya and Uganda Bronze level Customer Protection Certification, becoming the first financial institution in Kenya and the third in Africa to achieve this recognition.
The certification means that Watu Credit’s business operations are compliant to regulations and standards outlined in the Cerise+SPTF Methodology and the Universal Standards for Social and Environmental Performance Management.
The MFR committee evaluated the firms key metrics such as Transparency, Appropriate Product Design and Delivery, Privacy of Client Data, Governance and Human Resources, Responsible Pricing, Prevention of Indebtedness, Fair and Respectful Treatment of Clients, and Mechanisms for Complaint Resolution
“With a compliance rate of 99 percent across indicators including transparency, fair and respectful treatment of clients, prevention of over-indebtedness, responsible pricing, appropriate product design, and privacy of customer data, we have solidified our position as a model of integrity within the asset financing sector, ” Watu Credit General Manager for East Africa Andrii Volokha, stated when he announced the certification.
When the firm was summoned for a second time by parliament over the online claims, it was data from the client protection system that Volokha, and country director for Kenya Erick Massawe fell back on to respond to questions that members of parliament raised on its operations.
In the summons by National Assembly committee on Finance and Economic Planning to the company through, Erick Massawe, the firm’s country director for Kenya sought answers to seven specific questions. The committee sought to know the regulatory regime company operates in and the regulatory authority responsible. The committee also sought to know the interest rate charged by the firm on boda boda lending and the basis of this rate. Other questions include the nature of other financial services offers and whether it has received and acted on complaints of malpractice in the company. Further the committee sought to know the insurance regime available to the borrowers in the firm.
Blow by blow
In a blow by blow response to the committee, the firm using data from its system demonstrated how its systems have supported the recovery of 96 motorbikes out of the 100 reported lost last year by its customers. The four that were not recovered were fully settled by insurance firms the company works with as underwriters for the risk of theft.
The firm said recovery was made possible by utilization of technology and the support from National Police Service.
“Using our fleet management and tracking solution, 96 bikes were successfully recovered with the support of the National Police Service. The missing bikes insured by several leading insurance providers have also been fully settled, allowing our clients to remain in business,” said firm adding that 100 bikes had been reported stolen out of the more than 400,000 bikes it has financed.
Watu Credit said in its response that it intensified close collaboration with security enforcement and sector stakeholders to stem the vice and growing risk of suspected organised crime elements perpetuating motorbike theft.
“Where reports are made, we cooperate with investigative and insurance companies to ensure speedy resolution,” the firm told the committee.
Complaints
The firm demonstrated the robustness of its complaints handling mechanism by providing a detailed breakdown of how it handled complaints last year. During the reported period, the firm 468 complaints received complaints in its physical locations ranging from fraud against the company, unethical conduct and malpractices against customers.
“Of the reported cases, 192 (41 percent) were substantiated, of which 181 cases (94 percent of all substantiated cases) have been closed with internal disciplinary actions taken against erring employees. The disciplinary actions range between formal warnings and terminations,” said the firm.
Through online platforms the firm received a total of 5,586 customer complaints over the past one year with 4,405 (79 percent) having been resolved, while the existing 1,181 (21 percent ) are ongoing.
“Quality assurance surveys are conducted for all resolved complaints, to ensure that our customers who had raised the complaints are satisfied by the outcomes and resolutions and that they received first rate quality of service during the dispute resolution period. For all open unresolved cases, our customers are given weekly updates via SMS on the status of the issue, until completely resolved. These include inbound telephone channels (59 percent being complaints), Email and Social Media Platforms (13 percent being complaints), physical footprint, physical support provided at the branches, retail outlets and at the storage locations (comprising 28 percent) amongst others,” the firm explained.
Insurance
The firm told the committee it facilitates the provision of comprehensive insurance policies to its customers, covering the financed assets, passengers and third parties against financial loss. The insurance policies are provided by licensed service providers regulated by The Insurance Regulatory Authority (IRA) in Kenya. Comprehensive insurance policy provides insurable coverage for a duration of one year for the motorbikes (2 wheelers) and for one year with automatic renewal for the second year for the Tuk Tuk (3 wheelers).
“In the unfortunate event that WATU’s customers are involved in an accident, once reported, WATU collaborates and provides support to the customer by initiating and processing the insurance claim. To this end, WATU has invested in a dedicated team of insurance professionals and technology necessary to support its customers in matters related to insurance,” the firm said.
Customer protection
The firm took the committee through the principles that inform its customer protection procedures which include engaging in ethical business practices and promoting customer confidence, empowerment and developing a culture of customer responsibility. Other principles include ensuring customer awareness and information and encouraging responsible and informed consumer choice, avoiding unconscionable, unfair, unreasonable, unjust and otherwise improper trade practices, avoiding deceptive, misleading and fraudulent conduct; and providing an accessible, consistent, effective and efficient system of redress for customers.
If the committee clears the firm from any wrong doings over the allegations, it will be the second time that the culture of trust building and transparency will be proven to be firm’s most valuable asset.
In December last year, Senate cleared the firm on any wrong doings in the allegations after the firm’s Chief Executive Officer Andris Kaneps appeared before the committee. But the claims resurfaced earlier this month in public prodding the National Assembly’s committee to carry out its own investigations on firms operating Buy Now, Pay Later business models.
