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