Home Entrepreneurship Mobile based loyalty scheme plans to revolutionalise loyalty business in Kenya

Mobile based loyalty scheme plans to revolutionalise loyalty business in Kenya

by Wanjiku Mbugua

After years of chunky and bulky card based loyalty systems that have inconvenienced customers with wallets full of cards, M-Zawadi now gives a sigh of relief to customers who no longer need to carry any card while shopping.

By Bonface Otieno Kanyamwaya

Irish playwright George Bernard Shaw once said that some men dream things that never were and ask ‘why not’. These are the words that best describes Naftal Nyabuto Obwoni, Chief Executive Officer, M-Zawadi Holdings Limited.

He says that in 2015, armed with Ksh. 2 million from his savings, he  co- founded M-Zawadi Holdings- a company which deals with cardless mobile based loyalty solution (M-zawadi) that enables service providers especially Small& Medium Enterprises or retailers to acquire, interact, reward and retain customers.

“This has been made possible by the adoption of the Unstructured Supplementary Service Data (USSD) a technology that does not depend on internet but uses simple SMS push similar to the M-pesa technology,” he says.

Unlike other card based loyalty platforms, Obwoni says that  this platform enables customers with any  mobile phone to receive and redeem loyalty from any M-Zawadi registered merchant with only a mobile phone number as a card.

The platform also gives one the ability as a retail or as a service provider to interact and attract a wide spectrum of clients since the platform engages customers who are either using smart phones or feature phones.

“What we are offering is a solution which looks at how SMEs can reduce the cost of introducing loyalty programs. This includes the cost of buying cards, the machines for printing cards, the infrustures of card readers and the over heads for administering them. It costs about Ksh. 500 to print one loyalty card meaning that a business targeting a million customers under the card scheme is likely to spend over Ksh. 500 million,” says Obwoni.

M-Zawadi also provides users with a back-end, accessible via web. The back-end provides the merchant with business intelligence modules where they can map consumer purchasing behaviour. They can also generate specific insight on specific customers such as the number of visits and which products were purchased the most. Importantly, the business intelligence modules can allow a small business with multiple branches view the performance of each branch.

Consequently, it allows a registered user to transfer points to other users but within the same brand/merchant. This helps merchants to retain their loyal customer base and at the same time introduces new customers to their brand.

Furthermore, it allows merchants to advertise deals and promotions through a unique M-zawadi app portal with instant messaging ability to communicate with customers who like or follow their promotions.  The platform also allows merchants to form a coalition with non competitors in order to allow customers to redeem points at various partner outlets thus giving more value to loyalty.

So how does it work?

The CEO says that for one to use the platform as a customer, first they need to register on the platform which can be done via USSD or an android app. He notes that users with feature phones or who prefer to use the USSD module dial *415*100# from their mobile devices, which then ushers in an option to register.

After following the prompts, the user can then begin earning points. The users can also download the app from Google play store. Upon registration, he can then start earning points every time they shop at an outlet registered with M-Zawadi.

“Assume that you visit your barber and your cut is Ksh. 300. The barber simply asks you for your number and having registered, they award you with points based on their pre-determined reward system.”

He notes that the solution is especially effective for merchants and is available via web, POS and App adding that for users with a physical POS but lack the internet, the M-Zawadi API allows for the storage of the data locally to be assessed when the internet becomes available.

For the merchant, he says that a customer’s number become their unique identifier, through which they can reward the user with points for transactions.

The awarding of the loyalty points takes place via a smart phone where as a merchant you ask for the customer’s number, enter the amount they purchased before they can receive their points.


In a bid to ensure that one can use the solution even when he is not in Kenya, the firm has partnered with a number of international gateway platforms for payment such E-Gift Africa, a subsidiary of eGiift.com that has 4500 brands across the globe that offer loyalty scheme to member partners.

Through this partnership, M-Zawadi users are able to trade the value of their loyalty programme with any of the affiliate partners.

For instance, an M-Zawadi customer can purchase an item at a particular shop, earn some points but redeem the value from any coffee shop or through any other organisation that is also in the partnership.


One of the biggest facing Obwoni’s business at the moment is inadequate finance. He says that the situation has even been made worse as banks have denied them credit to be able to upscale their operations.

“A number of banks do not want to support start-ups because they want to reduce risks,” he says.

Secondly, he says that a number of Universities in Kenya are still producing half graduates without the required skills set in the market.

Going forward, he believes that in the next five years to come, M-zawadi is going to be a house hold name not only in Kenya but across the globe.

“The uptake is going to be very high because Kenyans have appreciated the solution we have created,” he concludes.




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