Renaissance Credit, a new microfinance institution in Lagos, Nigeria, has launched providing personal loans, street-level microfinancing, retail deposits and Point-of-Sale (PoS) agreements whereby consumers can buy direct from retailers via loan arrangement. The new RenCredit service uses the Temenos T24 for microfinance and community banking (MCB) software module, installed by local partners Jethro, for its core banking processes.
The Software-as-a-Service (SaaS) offering is hosted in the cloud on the Microsoft Windows Azure platform and according to Temenos RenCredit is the first such cloud-hosted core banking system in West Africa. It went live this week just two months after the agreement between the microfinancier and the vendor was agreed, demonstrating the speed of the SaaS delivery model, which also provides flexibility to add new products quickly in the future. While the upfront capital expenditure cost is negligible, of course, the on-going fees payable for the service do also have to be taken into account.
Opting for a cloud-based core banking system does however enable RenCredit to operate on a pay-per-use model to test the market, meaning the bank can scale its IT infrastructure to fuel seamless expansion into other African regions, at low risk to the business. Temenos has created a model bank template and seamlessly integrated loan origination and biometric authentication bolt-ons into the system, it says, in addition to establishing connections to local electronic payments channels. This is a replicable model allowing RenCredit to access a pre-built infrastructure directly from the Internet - anywhere - and in turn, enabling the micofinancier to focus on its core competence of banking.
The provision of personal loans, street-level microfinancing, retail deposits and PoS agreements means RenCredit will need to compute large volumes of transactions through the credit scoring engine from Experian which it is using. This software works seamlessly with the Temenos core banking solution maintain the partners, enabling quick loan decisions to be made.
Commenting on the launch, George Taylor, chairman of the parent Renaissance Credit group in Nigeria, said: “Microfinance is serving a huge market need in Africa, bringing credit lines to the ‘unbanked’. We will benefit from high levels of security, reliability and availability from Temenos – and the latest functionality as the upgrades to the software are taken care of by Temenos and Microsoft Windows Azure. Renaissance Credit’s mission is to provide a unique microfinance service – T24 MCB in the cloud allows us to concentrate fully on that goal, with no distractions.”
According to Karen Cone, general manager, worldwide financial services at Microsoft, the technology giant is excited by its strategic partnership with Temenos and keen to support the banking industry’s transition towards core banking delivered via the cloud. “The Windows Azure platform and T24 offer a close fit and viable alternative to up-front capital heavy technology investments,” she said. “Not only will this provide a differentiating edge to banks looking to take their products to market rapidly, it helps offer microfinancing and banking services to people who haven’t had access to them before.”