Making Money Mobile
Slowly Going Mobile
In our first month using M-PESA PayBill to receive loan payments, we got 1 test transaction, 4 loan payments, and 4 payments made in error by other M-PESA users. Not quite the mobile banking launch I was hoping for.
The adoption of mobile loan repayment through M-PESA’s PayBill service has been slow, which doesn’t entirely surprise me. Mobile money services like M-PESA are widely used in Kenya, but the transaction fees usually aren’t cost effective for small loan payments, especially when members attend weekly meetings anyway. But I think there will be a greater need as Nuru scales to areas that aren’t as close to our current office and as members graduate from group to individual services, which will require less meetings.
More urgently, I’ve spent the past several months working on the banking information systems that will be crucial to our microfinance operations as we grow. We’re finally wrapping up deployment of Mifos as our management information system (MIS), after months of work collecting member information from over 1,300 farmers, scrubbing 2 years’ worth of member and financial data, and stumbling through the Mifos learning curve. This is hard enough without the regular chaos that accompanies our work – a falling maize market, an infestation of weevils, internal staff issues, a cholera outbreak. The time spent will be worth it, though. A CGAP study describes mobile banking as “fundamentally a front end to a financial institution’s information technology system.” So as we move toward branchless banking we’ll need to strengthen our backend processes that much more. The team will spend the remainder of this season adjusting our operations around our new MIS solution and I am excited by the potential Mifos gives us to effectively scale, especially since the newest version that will be released in December will include mobile money support specifically for M-PESA.
This week I went with the agriculture team on farm visits in Ngochoni, one of our newest locations. We walked only on small goat paths and the farms are sprawled out; it took us most of the day to cover 1 group of farmers. But in the middle of a maize field, I get a text message from a member asking if I’d received his loan payment through M-PESA. It’s a slow start, but mobile looks promising.