Using Credit to Grow Savings: Results from a Mobile Pilot in Kenya

Can financial services be sold with minimum human contact?
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This report reviews Jipange KuSave (JKS), an innovative savings product delivered through mobile channels in Kenya. CGAP and the Financial Sector Deepening Trust Kenya (FSD Kenya) provided grant funding to Mobile Ventures Kenya Limited (MVK) in November 2009 for the pilot of JKS. The report evaluates the hypothesis that financial services could be sold with little or no human contact. It also analyzes whether the project represented a good use of donor funding. Findings indicate that:

  • Mobile channel can be used for a combined savings and loan product for poor people;
  • Customer usage does not suffer from lack of face-to-face interaction;
  • JKS customers have benefited in terms of privacy, certainty of loan disbursement, and time savings;
  • Customers are willing to pay;
  • Budget constraints led to the product not achieving scale.

The report states that JKS reflects the way in which microfinance transactions are likely to evolve globally. It recommends the introduction of a robust scoring system and a follow-on product for users who have reached their savings targets.