Microfinance with Macro Potential

POSTED BY Damian Kennedy
While the mobile device in itself has provided huge gains and benefits towards financial inclusion for those in developing nations, there is considerably more that technology can do.

Particularly in the microloans space, one of the issues has been around the provision of loans without an adequate level of caution and assessment of the loan applicants themselves.


As a result, a number of providers have sought innovative ways, as well as third party help in how to assess loan applicants. These include analysis of social media accounts, as well as more basic methods such as the pooling of consumer loans to reduce risk. Yet it is not just the credit industry which is set to benefit.

More Sophisticated Products Set to Launch

Whilst MFS (Mobile financial Services) have become a staple in many sub-Saharan nations, more innovative and sophisticated finance products are seeing launch, driving further growth. One such example is M-Akiba, Swahili for ‘mobile savings’, which has launched in Kenya to provide customers with government bonds.

The move has already proved popular with consumers; over KES1 million ($10,000) worth of bonds were purchased within 3 hours of launch. The product prices bonds at a starting cost of KES3,000 ($30), far lower than the previous cost of KES50,000 ($500) for sovereign bonds, and offers interest rates of 10%. A move to drive savings seems a logical step, as Kenya is already a more mature market for other micro financial services.

For in-depth analysis and assesment of the MFS market, Juniper’s research: Mobile Financial Services in Emerging Markets: Money Transfer, Loans, Savings & Insurance 2017-2022 is available now.