From this article from Kenya's Business Daily, Kevin Mwanza writes about how banks and microcredit lenders have used mobile banking.
Worldwide, it is estimated that $20-30 billion is currently on loan to more than 50 million microfinance borrowers.
Here in Kenya, a massive 62 per cent of the population has no access to conventional banking services, leading to the enthusiastic market response to the nascent mobile banking and money transfer services.
“Mobile banking has fast become an important part of financial services in Kenya and microfinance institutions are not lagging behind on this,” said PesaPot CEO Michael Asola, whose firm provides mobile loan technology to MFIs and the Sacco industry in Kenya.
PesaPot recently joined forces with RedCloud Technologies, an international developer of cloud computing financial services platform, to help it come up with mobile solutions that will enable its clients gain real-time insight into their loan portfolios as well as dramatically reduce their costs.
Some of the MFI and Sacco’s that have partnered with PesaPot include RiverBank Credit, Wasili Sacco and Umande Trust.
Other applications include end-to-end transaction features that connect the borrower directly to his bank account over the phone, using any mobile service provider that has a money transfer service, and a feature for loan officers to vet and get loanees directly into the organization’s system while in the field, cutting on unnecessary paper work.
Microfinance’ institutions that have taken advantage of these technological advancements have been able to reach the mass market after vetting borrowers, which enables them to reduce their portfolio-at-risk levels.
Other services that are being provided using these latest technological advancements include micro-insurance, characterized by low premium and low coverage limits, designed to service low-income people and businesses in developing countries.