Shared Services

We support our partners in the development of shared IT services or other shared services like audit and recruitment.

Eastern Africa

To increase financial inclusion in particular of the rural population in Eastern Africa, the range of services offered by Microfinance Institutions (MFIs) and Savings and Credit Cooperatives (SACCOs) which are organized in umbrella organisations which act as German Sparkassenstiftung’s project partners has to expand. For this purpose, it is necessary to develop financial products and services adapted to the needs of rural target groups. Additionally, it is relevant to review the needs and possibilities for the setup of protection funds e.g. a deposit protection fund for microfinance clients and credit rotation funds. DSIK supports partners in the development of digital financial services and shared services, for example:

Shared IT Services (like server hosting, website development, shared software, and hardware support),
External Auditing of annual reports of SACCOs and MFIs to fulfill the legal requirements,
Human Resource activities (candidate selection and contracting) and
Data Management services.

Burundi

German Sparkassenstiftung Eastern Africa (DSIK) in Burundi together with its partner Réseau des Institutions de Microfinance du Burundi (RIM) the umbrella organization of the microfinance institutions in Burundi identified the development and implementation of shared services as one of their key cooperation areas. Offering shared services to the member MFIs has various advantages for them, in particular the possibility to afford high quality, but often-costly external services that they could otherwise not make use of, by pooling their resources.

Improved business performance with Shared Audit

The most successful shared service implemented in Burundi has been the Shared Audit. In 2018, 16 MFIs participated in the first Shared Audit for which a renowned local audit firm could be engaged that otherwise would be out of the financial scope of the institutions. For the MFIs being audited by a trusted and well-known auditing company has yielded valuable information on their status quo and recommendations on measures for the improvement of their operations. Moreover, it improves their reputation and adds to their credibility in the financial community. By 2020, even more MFIs were enrolled in the service, further enhancing the collective benefit and ensuring consistent quality and transparency across the sector.

Additionally, another shared service for the development of audit charters was acquired by 9 MFIs in 2020. This service aimed to help the MFIs comply with regulatory requirements and improve their internal control systems, thus enhancing the governance quality of the institutions.

Shared services to comply with central bank requirements

Another shared service that was implemented with the support of a specialized consultancy firm was the conception of Business Continuity Plans. These are documents outlining systems of prevention and recovery to deal with potential threats such as natural disasters or the disruption of IT structures to a business’s operations. The possession of such plans enabled the MFIs to comply with regulations of the Banque de la République du Burundi (the central bank of Burundi), which requires all financial institutions to put in place such provisions. It started with 5 institutions taking part in this service.

Development of a manual on anti-money laundering and the financing of terrorism

A shared service on the development of a comprehensive manual on anti-money laundering and the financing of terrorism was also acquired. This manual provided MFIs with standardized procedures and protocols to detect, prevent, and report suspicious activities, ensuring compliance with international standards as well as the regulations of the central bank of Burundi, and enhancing the integrity of the institutions. This service was initially adopted by 11 MFIs.

Kenya

Together with our partner African Confederation of Co-operative Savings and Credit Associations (ACCOSCA) we intend to introduce shared services on Big Data, Data Management Software, Core Banking Software and Shared Branching in the SACCOs sector. While, with the Association of Microfinance Institutions in Kenya (AMFI-K) we plan to introduce digitalization and shared IT services in the microfinance sector.

Rwanda

The term shared services refers to the consolidation and centralization of service processes of an organization. This procedure is particularly suitable for umbrella organizations and their affiliated members. In Rwanda, the Association of Microfinance Institutions in Rwanda (AMIR) acts as an apex organization for a large number of MFIs. These, in turn, are very similar in terms of their structure and have almost identical processes in their day-to-day business since they serve the same clientele.

DSIK in Rwanda supported its former partner AMIR to build a shared IT platform for the MFI sector. The central product the platform was a core banking software adapted to the needs of the MFIs. Many other aspects were considered like the integration of a data warehouse, e.g. for the creation of management reports or the integration of different services like mobile money, online banking, or the use of ATMs. Above all, hosting and IT support was implemented to be carried out from a central location, so that MFIs could focus on their current business and their customers.

Additionally, AMIR developed with the support of DSIK various other shared services to best serve the member MFIs. These included: Shared Audit Services, where AMIR negotiated a framework contract with an auditing firm. The representation of almost the entire microfinance sector enabled AMIR to have greater negotiating power and thus, more favourable individual prices for annual audits of individual MFIs. More than that, AMIR offered Shared Recruitment Services where individual microfinance institutions without capacity to carry out an assessment center or interviews, AMIR took over this role for a corresponding fee. In some cases, the MFI wanted to ensure transparency in the selection process and therefore engaged the umbrella organization as an independent third party.

Tanzania

DSIK has supported its current partner the Savings and Credit Cooperative Union League of Tanzania (SCCULT) in the following shared services that have significantly contributed to facilitating SACCOS to receive affordable, reliable and appropriate services. These services include:

Digitalization Services: These include Assessment of ICT needs, identification of appropriate systems after developing Systems Requirements Specifications, and currently and the most important one, development of the shared Core SACCOS System (CSS).
Internal Auditing: DSIK supported SCCULT in establishing an Internal Audit Department, that plays a role in supporting internal auditing for SACCOS at an affordable cost, allowing those unable to employ a full-time internal auditor to still benefit from these essential services.
Other Shared Services: DSIK is collaborating with SCCULT to provide additional shared services for SACCOS, including Legal and Insurance among others, ensuring that such services are available to its members at an affordable cost.

DSIK also supported its former partners, Tanzania Cooperative Development Commission (TCDC) and SELF Microfinance Fund (SELF MF) on different IT shared services.

Uganda

Together with our partner Uganda Cooperative Savings and Credit Union (UCSCU), we have actively facilitated the establishment and implementation of efficient shared service model which is the UCSCU Core Banking System providing a centralized platform that benefits numerous SACCOs through enhanced operational efficiency and cost management optimization. Additionally, we developed an ICT Governance shared services platform where SACCOs can benefit from the expertise of our partner UCSCU to develop and establish ICT policy manuals and strategies.

Together with our former partner the Association of Microfinance Institutions of Uganda (AMFIU), we also implemented a Shared Services Center (SSC). The SSC is a consolidation of people, processes and technologies structured in a centralized point of service optimized to deliver cost‐effective, flexible, and reliable services to all AMFIU members. Services available and accessible through the SSC are Digitalization, Mobile Financial Services, Core Banking System, Debt Collection, Audit, Risk Management, Legal and Compliance.