In Kenya, microfinance is going mobile
IMTFI researcher Tonny Omwansa blogs about Musoni on the GSMA Mobile Money for the Unbanked Blog
A lot has been written on the opportunity of using mobile money to provide microcredit and on why Micro Finance Institutions (MFIs) should be using mobile money. Indeed, mobile money is a cheap and convenient channel that can be used for loan disbursement and repayment. It also reduces the risk of fraud as MFI officers often travel with cash from the place they collect it to the MFI branch office.
However, the number of MFIs substantially using mobile money is actually quite limited, and for good reason: typical mobile money services have not been designed with the vision of serving MFIs, but rather individuals, and using mobile money to supplement their operations presents a number of challenges for MFIs. In this blog post, we present how two organizations are trying to find solutions to these challenges in Kenya.