Mobile Banking for Microfinance

FEBRUARY 2012 – Triple Jump successfully helps microfinance institutions enter the mobile banking market – including Small and Micro Enterprise Development (SMEP) DTM Ltd in Kenya.

SMEP is a licensed deposit-taking microfinance (DTM) institution in Kenya. The Central Bank of Kenya licensed SMEP as a DTM in December 2010, after it had operated as a credit-only MFI from April 1999. SMEP has grown to serve 52,000 borrowers and 125,000 depositors, with a gross loan portfolio of over EUR 11 million by the end of 2011.

SMEP recognises the critical role played by IT in building an efficient and sustainable microfinance business. In this regard, since 2009, SMEP has sought the support of Triple Jump Advisory Services (TJAS) to upgrade their core banking system, train their staff and develop a mobile banking channel leveraging Safaricom’s Mpesa money transfer platform. Advisory Services helped SMEP launch a mobile banking channel in 2009 that enables customers to make loan reimbursements via mobile phones and we continue to enhance the system. SMEP can now make loan disbursements, and customers can make savings deposits through their phones.

To solve the daily constraints and reporting issues of SMEP’s management information system (MIS) and ensure a stable environment to support mobile banking transactions, Jump Advisory Services consultants completed a full upgrade of the system and trained staff in error-free reporting. The support was instrumental to preparing SMEP to meet the strict reporting requirements of the Central Bank of Kenya, culminating in the licensing of SMEP as a DTM.

Mobile banking has already shown cost savings for SMEP (lower bank fees and less administration) as well as for customers (lower bank fees and time saving). Clients have been able to receive and repay their loans through Mpesa in a convenient and efficient way, which also helps reduce late payments.

“We believe the future is bright for this partnership as we continue to integrate other efficient and cost effective services for low-end clients in Kenyan society in the fight against poverty and elevation of our clients’ living standards”, says Phyllis Mbungu, CEO, SMEP DTM.