MFIs tap technology as the bridge to reach unbanked millions

Kenyan microfinance institutions have for a long time served the unbanked segments of the population despite several obstacles in their quest to access this niche.

It is estimated that micro-enterprises contribute about 18 per cent of Kenya’s gross domestic product and 25 per cent of non-agricultural GDP.

It is thus not surprising that many MFI’s have taken to using technology, especially mobile phone platforms, to cut on high operational costs and reliance on commercial banks while increasing focus on core functions.

Early this year, during the opening of the Africa-Middle East Regional Micro-Credit Summit in Nairobi, President Mwai Kibaki affirmed the central role micro-finance plays in national development by striving to address the challenge of providing financial services. Read more

KWFT licensing boon for small scale borrowers

Feature: Kenya Women Finance Trust (KWFT)is a member of INAFI Africa

By GEOFFREY IRUNGU

Small scale borrowers are likely to get cheaper credit following the licensing of the second deposit-taking microfinance (DTM) institution — the Kenya Women Finance Trust.

The trust — which will assume the name Kenya Women Finance Trust Deposit Taking Microfinance Limited (KWFT DTM), joins Faulu Kenya which was licensed a year ago.

Another eight firms are waiting for similar licences.

The two institutions can leverage on the cheaper deposits from their customers, a development that should also lead to cheaper credit for the same customers.

KWFT DTM had to raise its borrowings by a massive 49 per cent or Sh1.1 billion to Sh3.3 billion in 2008 in order to continue giving out loans. Read more