Monday, July 20, 2009

Mobile Banking

Traveling with a microfinance institution in rural Tanzania, I once spent 45 minutes in an SUV getting to their "closest" rural client. Rural Africa can get pretty sparsely populated making it difficult for loan officers to access clients or for clients to access an MFI office without incurring significant costs. Higher costs make it harder for microfinance institutions to serve the rural poor or drive up interest rates to keep institutions sustainable.

What if clients could make payments on loans through their phones? That's what two Kiva partners, Tujijenge in Tanzania and the Small and Micro Enterprise Program (SMEP) in Kenya, are experimenting with. These mobile banking projects are being supported by Triple Jump Advisory Services, a technical assistance provider based in the Netherlands, and discussed here.

Cell phones are ubiquitous throughout Africa and present a unique opportunity to leverage technology to improve services to microfinance clients. Let's hope that Tujijenge and SMEP prove successful with these projects and that the continue to spread!