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Rapid changes in technology have greatly impacted the banking industry in Kenya. The evolving technology and specifically, mobile phones, have transformed provision of financial services and brought in new models of serving the underprivileged in Kenya.

Finserve Africa Limited, through one of its products - Equitel, is a mobile virtual network operator (MVNO). Finserve developed an innovative product, Equitel, the 0.1mm-thin SIM card that sits on top of a user’s existing SIM, allowing subscribers to access mobile-money services over and above the usual voice, data and SMS services that are accessible through an ordinary SIM card. The thin SIM cards have multi-wallet capabilities that accommodate money management prevalent in rural areas. Furthermore, it also enables access to instant loans, free balance enquiries; free money transfers; and free content made available on the mobile phone which is useful and relevant to different niches.

The project idea, Scaling Rural Financial Inclusion in Africa Using Equitel MVNO, came from the fact that brick-and-mortar type of banking is not working in Kenya and people are not willing to stand in long queues to make financial transactions. As a result, Finserve developed Equitel, a revolutionary, convenient, accessible platform that helps customers perform financial transactions as well as make calls, send SMSes and browse the internet, anywhere and anytime.

The project, Equitel MVNO, supported by the Mastercard Foundation Fund for Rural Prosperity aims to improve efficiency and accessibility for banking in rural areas for people who used to walk long distances to access financial services and ultimately improve the lives of smallholder farmers.

The Equitel project has made a significant contribution to people’s lives since inception in 2016. These include:

1. Beneficiaries have learnt the importance of saving and building a future.
2. The Eazzy loan product, which has enabled smallholder farmers and small business people to easily access loans and improve their businesses.

3. Women and youth have benefited significantly from the project. The Youth can apply and get loan facilities without contemporary collateral but simply through reliance on credit/account history. Consequently, the youth and women can gain access to banking facilities that can help them grow their businesses. Women on the other hand, are able to increase their savings through bank-linked accounts, grow their income levels through market linkages, price and best farming practices tips and increase their agricultural output.

   “Lives have been transformed by our project and the impact will live on for generations to come.” - Zipporah Njoroge, Project Manager, Equitel project.

4. The whole family and community at large have benefited as well. Children are able to access basic education and farmers have increased income to help them take care of their families.

The project implementation has not been without obstacles and lessons. Finserve Africa encountered obstacles including:

• Customer acquisition and on boarding: The presence of dominant competitive players in the mobile banking space and difficulties in communicating Equitel’s unique value proposition i.e. a full banking solution on a mobile phone, to small-scale farmers required dedicated face-to-face engagement at the onset. Fast-forward to date and Equitel has comfortably been able to claim a share of the competitive market and subscribers who are now product ambassadors.

• Low financial literacy levels among the rural population: Finserve set out to improve literacy levels through targeted financial literacy programs and agricultural trainings. The literacy programs curriculum included modules aimed at growing small-scale farmers’ understanding of mobile banking, importance of savings, and importance of taking loans for development of businesses and not for consumption purposes.

• Poor infrastructure: A lack of an omnipresent GSM network, slowed the product penetration and adoption. Lack of GSM network affected on boarding of customers while the lack of identification cards by some customers lengthened the verification process.

Ultimately, the Finserve project is on course to achieving its target objectives having reached 286,428 beneficiaries as at June 2018. The Fund’s support and contribution was timely because at the time Equitel thin SIMs were expensive compared to the cost of ordinary SIM cards. The support enabled no-cost distribution of the thin SIMs and Finserve was able to provide them free of cost to low-income customers. Through the Fund’s support, Finserve has subsequently initiated and completed technical development of the Eazzy application and financial literacy education for rural and farming population. Finserve has further developed a new insurance product, called Riziki Cover, based on the learnings derived from the Equitel project. The ongoing innovations could result in a disruptive boost to financial inclusion across Africa.

Article by Grace Oduor and Colin Azavedo, Communications, Mastercard Foundation Fund for Rural Prosperity.