Musoni in Kenya: When microcredit goes mobile

How can people gain access to credit when they live in remote areas of the country where no microfinance institutions (MFI) wish to set up a branch because the costs are too high? And for those living in urban areas, how do they avoid the long queues in a bank, only to be told that they are not considered creditworthy or that they will need to come back with additional documents? Is there a way of facilitating access to credit for these people who need financial resources in order to build a better future for themselves?

Musoni, an MFI set up in Kenya in 2010, has the answer to all these questions. The MFI offers its clients mobile banking services. Clients can receive and reimburse their microcredit facilities via their mobile phones. “This system has numerous advantages”, explains MFI manager James Onyutta. “Thanks to mobile banking services, the administrative costs have been sharply reduced and it costs less to run the branch. We are also among the fastest to pay out and the transactions are more secure. It’s better for our credit managers, too, because they spend less time travelling and can spend more time with clients.” The system has many advantages for clients, as well. We met three of the MFI’s clients to find out about their experiences with the MFI and its innovative services. Alterfin has been financing Musoni since August 2014, together with Fefisol, through a joint loan of approximately EUR 500,000.

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