Musoni’s Mobile Technology Driving Financial Inclusion to Kenya’s Smallholder Farmers

Stanley Munyao, CEO, Musoni Kenya

Musoni is an innovative, cashless, paperless and data driven microfinance institution that leverages on technology to bring financial inclusion to the underserved population.

The institution is globally recognized for key achievements such as being the first Microfinance Institution (MFI) in the world to go 100 per cent mobile, enabling clients to deposit their savings and repay their loans through their mobile wallets, the first MFI in East and Central Africa to receive an ISO certification popularly known as Smart Certification in recognition of the institution’s adherence and commitment to observing client protection principles and standards promoted by the Smart Campaign.  It was also the first MFI in Kenya to introduce Digital Field Applications (DFA) for client registration and credit underwriting.

Musoni’s mandate is derived from its social mission which is, “To promote financial inclusion through provision of financial products that support sustainable livelihood among the rural micro-entrepreneurs and smallholder farmers in Kenya.”

In the following interview with StartUp Magazine, Stanley Munyao, CEO of Musoni in Kenya muses about its aim is to empower women, the youth and smallholder farmers by offering products and services that meet their needs, and many more.

What was your mission at the onset?

Our Mission was and still remains to grow, build and maximize the potential of the business of the low income and the unbanked of Kenya through the provision of affordable, flexible and customer-oriented financial services.

This has been achieved through innovative approaches in product design and partnerships that have helped us reach out to the financially marginalized population with life changing financial solutions as a means of ensuring long-term relations with our clients, employees and stakeholders.

How can your solutions be accessed?

Our products can be accessed through our interactive digital platform that allows clients to register and apply for loans through our USSD code *646# and the Musoni App in Google Play Store. Our systems support client’s self-registration and by reason of leveraging on technology; turn- around time for loan processing is sometimes less than 24hrs and a maximum of 72hrs.

What areas of interest do you target with your financial solutions?

We target micro, small and medium enterprises as well as small holder farmers with solutions that meet their needs through a unique mix of products ranging from Group Lending, Individual Lending, Green Solutions and Education Loans among others.

Based on the strong focus on achieving a triple bottom line, Musoni has a keen focus on reaching out to women, youth and rural inhabitants. The green solutions are incorporated into our portfolio to ensure the institution is not left out in contributing towards environmental conservation too.

Why do you think you are the best to serve the regional market?

We have successfully  digitized traditional microfinance processes such as client registration, loan underwriting and processing, disbursement, repayment and management to enhance efficiency in delivery of services. For that reason, we have placed ourselves in a perfect position to reach out to the underserved in the region. This not only reduces operational costs but also enhances client experience and boosts business growth by tapping into the unreached markets in Sub-Saharan Africa.

What major milestones have you achieved so far?

As mentioned earlier, Musoni enjoys several global recognitions. The Smart Certification in particular, was no mean achievement since it involved major adjustments in terms of how the institution conducts business with its clients. This was informed by the board and management’s decision to move from working on an assumption that the interests of its clients were protected to putting structures and systems in place to ensure the interests of the clients are fully protected.

A small-holder farmer in Kenya

Musoni has 35 branches across the country, 49,000 clients with an average loan size of Ksh. 37,500.  Our breadth of outreach stands at 63 per cent of female, 50 per cent youth clients, and 48 per cent rural penetration, with 20 per cent clients living below the poverty line. Our products and services have positively impacted more than 470,000 lives as well as helped in environmental conservation.

Have you faced any unique challenges in the cause of your operation? If so, how have you mitigated them?

Challenges are not only part of life but part of business as well and Musoni is no exception. Like any institution that has a triple bottom focus, there must be a paradigm shift that calls for change in institutional culture. Changing the mindset of staff to embrace the social performance call as a lending institution has not been easy because it involves changing how they handle clients. More specifically, one of the Client Protection Principles calls for ‘Fair and Respectful Treatment of Clients’ especially in the event of default. For a sector that is largely known to use very harsh recovery measure; adopting a relatively lenient Standard Arrear Management system was misinterpreted as a frustrating business which has proven not to be the case.

In the same strength, having to turn down investors whose mission did not align to our social goals has not been easy either. This is majorly because promotion of social impact in financial institutions is a new concept in this market. It takes a unique balance between being profit driven without compromising the well-being of clients.

Having supportive stakeholders and board members who believe in the institution’s social mission and who understand that getting the balance right takes time, guarded us against mission drift. To ensure employees understand and embrace changes and new developments in the institution, we had to invest heavily on continuous training and development for all staff.

From your experience, what would you say are the key ingredients of running a successful fin-tech firm?

Like any business, Fin-techs must understand their mission, the needs of their clients, develop products that meet those needs, protect the interest of their clients, have the right team to drive their business and know their competitors very well to avoid being swallowed by the sharks.

What would you say has been the greatest impact by your financial solutions?

Musoni’s greatest impact has been trusting on the poor with our credits. Hearing clients share stories of how their lives have been transformed after receiving credit from Musoni to grow their businesses, take their children to school, pay hospital bills and how they spend less on money cooking and lighting because of green energy solutions, among others is very fulfilling and confirms that indeed our products and services have a social impact.

What are your plans in the foreseeable future?

I plan to make Musoni a regional household name and a one stop shop for all the financial needs of the underserved populations.

Other pertinent issue?

Sustainable Finance is only possible if institutions protect the interest of their clients, the communities they serve and the environments they operate in. As such, I urge every player in the micro lending sector, regulators, investors, microfinance institutions, Cooperatives, SACCOs and NGOs to make Client Protection and Social Performance a priority in their operations. Otherwise we will have no people to lend to because of dented sector image, lack of client confidence and destroyed environment.