The impact of pure mobile micro-financing on the poor: Kenya's Musoni experience

Abstract

Almost all the micro-finance institutions (MFls) in Kenya have introduced mobile money to increase convenience, speed of transaction and lower cost of transferring funds. Since most MFls had already established their brick-and-mortar operations, mobile money only complements their traditional approaches to serving their clients. Musoni, a relatively new MFI provides micro-finance purely through mobile. This cashless model eliminates some administrative costs and makes transactions efficient for both the customers and the MFI. The uptake has been impressive and the model is believed to help reduce client groups' meeting frequency, increase time for clients and customer loyalty. Customers also have more time for their business. The researchers proposed to establish preliminary evidence of the impact of pure mobile money on the consumers of Musoni services. The qualitative data was collected through focus group discussions and in-depth interviews while quantitative data was collected via structured questionnaires. From the study, it was observed that mobile money, when bundled with other products, became more valuable and made the other products be more appreciated. There was an element of increased savings as a result of use of mobile money. In addition, there was an apparent shift to mobile money for other transactions.