The rapid penetration of the mobile phone has fueled the emergence of mobile money transfer services offered by the various mobile phones service providers . This has been seen as boon for Micro finance Institutions (MFI’s) as the businesses expands.
With African continent being the global leader in mobile banking, MFI’s are recording success stories as they reach the rural and pre-urban folks to spur development.
After rolling out a pilot project of the mobile banking service , Kenya Women Finance Trust(KWFT) an MFI service operator since 1981, partnered with GSM company in 2008 to introduce savings and remittance using mobile money transfer services to serve women and families in remote areas.
According to the KWFT’s Managing Director, Mwangi Githaiga, it was due to the need for convenience, low cash risks while reducing traveling costs, time wastage due to traveling long distances, that led to the venture in a bid to reach the low income women, households its target market.
“There was a need for a delivery channel that will save the time to travel from town to the village, improve the convenience where there are limited banking services and other risks such as money insecurities, the channel now provides women an ample time to operate their premises as they spend a little time with the family,” said Githaiga.
“Banks are a step in the urban areas while in the villages and remote areas customers will spend a whole day traveling to reach the nearest bank, we needed to reduce this time,” added Githaiga.
KWFT’s mobile banking channel supports the deposit mobilisation strategy as opposed to branch roll out which proved to be a gradual process and establishment of outlets in every village was not feasible. The channel enables clients to deposit money for free and withdraw at minimal cost from the comfort of their businesses.
With the official launch of Mobile Banking system scheduled within the next two months the women serving MFI has planned a campaign aimed at penetrating deeper to reach the Northern part of the country. Despite the insecurity levels in North Eastern, Githaiga said the channel will boost security level in the regon.
“Currently we have reached Maralal, Samburu and Garissa, however women in Lodwar have been traveling to Kitale for the banking services, the mobile banking system will improve security of funds especially where women get robbed off their money before reaching their ‘chama’ meetings.”said Githaiga.
“With the introduction of the money transfer system the client sends money to the chama ahead of the meeting and then travels safely with a slip, this reduces theft cases,” explained Githaiga.
After receiving a license for deposit taking business from the Central Bank of Kenya (CBK) early last year, KWFT’s operations have been complemented through the 10 deposit taking branches in Kakamega, Eldoret,Nyeri, Mombasa,River Road (Nairobi), Malindi, Kericho, Kisii, Embu and Migori which have been further necessitated by provision of Motorcycles to reach the deepest parts in rural areas.
“ To supplement the extensive geographical presence of offices and deposit taking branches, we use motorcycles to penetrate even deeper into the rural areas where women meet in social halls and barazas,” said Githaiga.
The MFI has been relying on funds from commercial banks, grants and social lenders, however the banks have been unable to offer credit facilities and with the growing mistrust of commercial banks made the microfinance Institution embrace the business.
“After the enaction of the law on credit facilities and our will to work with the poor,who have gained mistrust in commercial banks we have been able to adopt the system to mobilize resources,” said Githaiga.
“The system creates room for rotation of funds, we give the client the credit, give them time to repay at affordable cost while they experience fund guarantee and enhanced credibility,” explained Githaiga.
The deposit taking branches are designed to ensure a feminine touch as women gets the experience of friendly offices. The offices have mothers room for changing and breastfeeding babies, wall mirrors and fast lanes for elderly and expectant women and also provides an avenue for dissemination of information on maternal health .
Currently KWFT has 13 deposit taking branches and is expecting to open more to reach 20 by the end of the year. These with a network of 215 offices worldwide have been able to serve over 450,000 clients. Of these 90 per cent are servicing loans and operates at least two accounts.
The Woman MFI is certified on Kenswitch ATM network, enabling clients to transact through automated teller machines (ATM) and has partnered with the Cooperative bank of Kenya and Equity bank as financial partners.
Despite the success the reach for remote clients is faced by poor infrastructure; poor network connectivity, security,slow financial education and lack of electricity.
However, KWFT has braced the challenge of electricity as it has resorted to clean and affordable energy solution. with the Angazia Maisha loan clients are able to acquire Angazia Maisha Portable lamp that uses solar energy for lighting household and business premises apart from charging mobile phones.