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Implementing mobile money innovations to deepen financial inclusion: Lessons from successful innovations in Kenya

Implementing mobile money innovations to deepen financial inclusion: Lessons from successful innovations in Kenya

This is a guest post written by Tonny Omwansa, PhD, who lectures at the School of Computing and Informatics in the University of Nairobi. He specialises in low cost technologies for developing markets. He is the author of Money, Real Quick: Kenya’s Disruptive Mobile Money Innovation.

Since the advent of mobile money, there has been consistent focus on how this channel could be used to provide more sophisticated financial services such as savings, credit and insurance. To develop these services businesses must actively innovate on top of existing mobile money deployments. There are different models available thanks to the flexibility of mobile money. In the last three years, programs designed to meet certain needs in the market have been launched in Kenya. In this blog, I review some of the key lessons from four the most successful deployments.

First, a brief description of them:

KickStart’s Mobile Layaway

KickStart identifies profitable business opportunities for very poor, then designs, manufactures and mass markets simple tools that unlock these opportunities. One of the best selling products is a metal, pedal-powered irrigation water pump. KickStart leveraged on M-PESA and developed a mobile layaway program that enables farmers to save in small amounts (from as low as $1.25) towards purchasing a pump. The automated layaway program has reduced the payment period from twelve to three months and has had a payment completion rate of over 90%.


M-KOPA has creatively bundled an affordable solar home system with M-PESA. The system is aimed at individuals excluded from the formal electricity supply. After an initial deposit, clients make regular M-PESA payments for a period of at most one year towards the purchase of the system. Unlike KickStart, clients begin to use the system once they make the deposit. The system has a SIM card embedded to it, enabling M-Kopa to remotely monitor its physical location and control its functioning depending on whether customers make payments or not.


Musoni offers micro-loans and accepts repayments through mobile phones. Musoni is considered the first micro-finance institution to make all operations cash-less. Individual saving contributions and loan repayments are done on a weekly basis.


Safaricom teamed up with Commercial Bank of Africa to offer M-PESA customers a savings and credit facility managed by the bank. With no paperwork, no queuing at a bank, M-Shwari has had an impressive uptake and is considered a very convenient approach to accessing basic banking services. M-Shwari is not bundled with any product, making it flexible for users to save for a goal of their own choice.

What makes these innovations succeed? Correctly building on the positive traits of the underlying mobile money service, as the next section explores.

M-PESA – a basis for the Innovation

All these programs inherit some of the attributes of M-PESA, most notably: Trust, Convenience, Simplicity and Availability.

Trust: Customers need to be sure that they will not be taken advantage of or suffer financial loss. M-PESA is a trusted brand in Kenya. These programs have extended the trust as they either reliably bundle new products onto the channel or sophisticate mobile money to achieve new possibilities.

Convenience: By bundling mobile money with another product that these consumers require, the users are conveniently met at their point of need. In many cases, these clients have wanted to purchase the particular product, but either lacked the discipline or an appropriate channel to facilitate savings.

Simplicity: This has remained a backbone for technologies designed for BoP. In most cases, these consumers are characterised by low literacy and income levels, so information and products need to be simple, clear and transparent.

Availability: The spread of consumer confidence in the product via word of mouth communications is a direct result of the high system/platform availability.

Building Strong Relationships

A mobile money product only takes you so far. Certain aspects have to be developed by the partnering company. One of these aspects is building a strong relationship with the client base.

Using field officers, Musoni strives to interact with the clients on a weekly basis. The officers chair group meetings advising the clients on how to effectively manage their money to guarantee maximum benefit from Musoni services. To encourage continuous payment, KickStart and M-Kopa use sales reps, agents, retailers and regional managers to keep a close contact with the clients.

For KickStart, sales reps are at the heart of the business model. Research has proven that SMS alerts are good blanket reminders but consistent face-to-face interactions have even better results. Data shows that there is a significant increase in deposit frequency and amount by farmers who interacted face-to-face with sales reps, as a follow-up on the SMS reminders.

Even with the automation that enables M-Kopa to remotely disconnect a solar system, experience has shown that gentle proactive follow-ups through phone calls and visits have a greater effect in keeping the payments going.


Besides relationships, each product team has invested heavily in educating the consumers about the value of their products. When clients can make sense out of the economics of a water pump or solar panel coupled by the convenience and affordability of using mobile money as a payment means the take-up of the product really occurs. For instance, the advantage of solar over paraffin may be obvious to a reader of this blog, but not to a BoP customer.

Musoni explains to customers the benefit of going cash-light. One study I conducted showed that recipients do not spend all their loans at once; rather most of them keep some money in electronic form until they actually need to spend it. They appreciate that mobile money is safer and more reliable than cash. For M-Shwari, the partners have focused their message on educating customers on the benefits of savings. This has been effective, especially for the BoP customers. This effort has surely paid off, with 1.6 million customers signing up and savings reported to have reached KShs. 3 Billion since its launch in November 2012.

Though these products are relatively new in the market and providers are consistently refining their strategies, they are very promising and have a lot of valuable lessons for others who are looking to innovate around mobile money.


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