The GSMA MMU blog posted an interesting article about how a microfinance institution (MFI) can make effective use of mobile money to facilitate loan disbursements and payments. Musoni is the first the MFI to offer mobile money transfer services for all loan repayments and disbursements. With over 45,000 M-PESA agents and 70+% of the adult population using this mobile money service in Kenya, this is much easier to do there than anywhere else in the world now.
There are some important lessons here for other MFIs looking at utilizing mobile money services.
Cash-lite but not Branchless
Musoni, like others who have invested in “branchless banking services” does realize that it still needs branches to have face-to-face interactions between clients and staff. MFIs cannot go completely branchless but mobile money can make it easier to reach more areas and clients, especially in a place like Kenya.
Challenges to Mobile Money Payments
While it can be easier, faster, and safer to disburse loans and accept payments via mobile money, there still are challenges. Because of the limitations of many basic mobile money platforms, clients sometimes make mistakes by entering the wrong information including sending money to the wrong number. We often had this problem as well in the Philippines but newer developments and better menus help to address many of these errors but they do still happen. To address this, not only does the back-end system (or staff at the MFI) need to catch these mistakes, but you also need timely customer service.
It will be interesting to track the progress of MFIs like Musoni and learn from them.
To read the full article, click on the link below:
Photo Credit: GSMA MMU Blog Kenya_microfinancePt1.png