In Saudi Arabia, a fintech company has come up with the idea to boost financial inclusion in the Kingdom and modernize Jamiya, one of the world's oldest saving methods.
This app is called Hakbah.
Launched in late 2018 by Naif AbuSaida, Hakbah is an alternative savings platform with its first product being a mobile app for savings groups, known as Jamiya in the MENA region.
The mobile app has a customer base of over 500,000 users, with 70% of them being between 21 and 35 years old. It allows people to initiate, manage, join, and pay for savings groups, which are also known as money circles and Rotating Credit and Savings Associations (ROSCA) internationally, and Jamiya in Saudi Arabia and across the Arab world.
How Does Jamiya Work?
Jamiya refers to a rotating savings and credit association commonly found in various communities, especially in Muslim-majority countries.
These associations involve members contributing money into a common pool on a regular basis, with each member taking turns receiving a lump sum from the pool. Hakbah has digitized this traditional savings system.
More than 3,300 savings groups have been created on the Hakbah platform. Hakbah's model tackles the savings crisis in the Middle East, as 70% of Saudi citizens lack emergency savings, and the country's household savings rate averages just 1.6%.
The platform has helped 18,000 customers save more than $35 million combined.
All users on the platform are verified using their Saudi National ID or Iqama, and they must have a valid bank account within the Kingdom.
Hakbah's business model changed from a $6 monthly subscription fee to a one-time charge for users to join the platform. Users can pay their installments using their (Mada) debit card on the app and withdraw the money to their bank account when it's their turn to receive the pool.
There is also a discount on fees for new Jamiya participants.
Partnership with Visa and Low-Cost Airlines
Hakbah has signed a multi-year partnership with Visa that will allow it to issue Visa prepaid cards to its customers.
The partnership is expected to enable users to transfer their savings group earnings to the prepaid cards and use them online or withdraw cash from ATMs.
Recently, the company has also formed several important partnerships with blue-chip companies, including low-cost airlines in the Middle East and Saudi Arabia.
All Eyes on Open Banking
In December 2023, Hakbah announced a strategic collaboration with Tarabut, MENA's leading open banking platform and a key player in the region's digital transformation. This partnership aims to streamline onboarding processes, enhance data processing efficiency, reduce service costs, and decrease data processing time.
It is also expected to expand Hakbah's customer offerings by 20%.
What's Next?
Last winter, Hakbah announced its $5.1 million Series A funding to accelerate growth and product development. The funding round was led by VentureSouq, a MENA-based venture capital firm, with new investors M-Capital and Bunat Ventures joining in, along with existing investors Global Ventures and Aditum Investment Management.
The funds raised will be utilized for improving product development, with a specific focus on Machine Learning and further improving the company's integrable savings engine. The capital will also be used to attract and support talents in the region and reinforce Hakbah's platform.
Additionally, the company is planning to enter two regional markets shortly, either through a partnership or a strategic alliance.
