IMTFI Research 2012
The Impact of Pure Mobile
Micro-financing on the Poor
Tonny Omwansa & Tim Waema
University of California, Irvine
5-7 December, 2012
Agenda
•
•
•
•
•
•
MUSONI
Objectives
Approach
Preliminary findings
Preliminary conclusions
Way forward
MUSONI
• Musoni (‘M’ for Mobile and ‘Usoni’ for future
or Mobile Future), see
http://www.musoni.eu/index.php/media/vid
eos
• The first MFI in the world to go 100% mobile
• Cash-lite operations, but not branchless
• Customers loans guaranteed within 72 hours
• Benefits: lower risks, less paper work, better
customer service, easier and more accurate
transaction tracking
• 2.5 years old, over 18,000 loans issued, 8,000
clients
Objectives
• To establish how the clients gauge the
socio-economic impact of utilizing
technology-based financial services and
if it drives them to consider using less
cash in other transactions
• To establish and quantify the impact of
cashless mobile micro financing on the
lives of the poor clients, including the
apparent shift from cash to e-money
Approach
• Component of the capability approach
(conceptual framework):
• Quant: Obtained 245 acceptable questionnaires
back
• Qual: Will be doing FGDs and IDIs
Aug 2012
Oct 2012
Dec/Jan
Design &
Piloting
Quant
Data
Qual
Data
Progress
Report
Feb 2013
Final
Report
Demographics
• Total of 245 respondents from 34 groups
• Age
• Min age – 21
• Max age - 63;
• Education
• High school - 45%
• Primary school - 27%
• Marital staus
• Married – 78%
• Single – 21%
• Gender
• Male – 45%
• Female – 55%
Preliminary findings
Source of loans
206
84
81
42
ASCA/ROSCA
MFI
Friends and
Family
Bank
33
Never
Borrowed
Membership of MFI
• Member of more than one MFI before
joining Musoni? 44%
• Member of other MFI after joining
Musoni? 18%
Drop possibly attributed to
Musoni’s motto:
“Musoni is best”,
“I don’t need another MFI”
Why choose Musoni?
159
135
20
It’s the one that
uses Mpesa
Family member,
friend
recommended it
No other MFI
around
Other common reasons for choice
•
•
•
•
•
•
•
•
Cheap/affordable
Easy to access credit
The loan interest is low
Good Service
Very efficient
Convenient
Faster to get credit
Quick response
Musoni
Mpesa
Using M-Pesa for loans is better
than cash because:
80.40%
77.50%
Time saving Convenient
That they see it
as “Money
Saving” is
significant
76.70%
34.30%
Safer
Saves
Money
What makes you prefer Musoni
over other MFIs?
I get my money
faster
85.30%
Services are more
Convenient
Receiving loan in MPesa is safer
Helps avoid handling
too much cash
72.60%
58.70%
36.70%
Being a
cash
society, this
is
substantial
Which statements are true
about using M-Pesa for loan
Value for mobile money
is well appreciated
71%
67%
66%
Tracking loan and
Repaying loan using Receiving loan using
repayments is better M-Pesa is better than M-Pesa is better than
and easier with Mcash
by cash or cheque or
Pesa:
bank deposit
I keep money in M-Pesa for other
uses besides loan repayment
30%
29%
30%
79% kept
extra
money as
‘idle’
electronic
money
7%
4%
No not at all
A little
amount
A reasonable A substantial Choose not to
amount
amount
answer
How much money do you keep in
Mpesa?
23%
22%
18%
11%
7%
7%
6%
6%
To many,
M-Pesa
serves to
store small
amounts of
money
Avg: $40
Which of these services do you use?
Buy airtime using M-Pesa
88%
Pay bills using M-Pesa
56%
Use okoa jahazi
51%
Save money using M-Pesa
47%
Pay for goods using M-Pesa
47%
Pay school fees using M-Pesa
22%
Pay loan for some other person
Only Musoni Loans
12%
2%
MM has multiple
usage, beyond
loan repayments
If I it was possible, I would do all
transactions in:
Not very sure
13%
Cash
19%
M-Pesa
68%
The desire to go
cash-less is clear
What do you do when you receive your
loan money through M-Pesa?
Use of Mpesa to save
1%
2%
27%
Withdraw it all at once
Keep it in all M-Pesa
Withdraw what I need and
keep the rest in M-Pesa
10%
60%
Choose not to answer
Other
Do you send some of the loan to the
bank via Mpesa?
YES
26%
NO
74%
The 26% are
interested in
credit history
offered by bank or
lower ATM
withdrawals
(compared to MPesa)
Why do you change Mpesa back to
cash?
Most people I send money
to would rather use cash
44%
It’s expensive to transact
using M-Pesa
40%
Rarely convert back to cash
18%
Don’t trust keeping money
in M-Pesa
Other
11%
6%
The two
main
barriers
Since I began using Musoni services:
2%
13%
I do more
transactions using MPesa
4%
I do less transactions
using M-Pesa
81%
Confirms impact of
cashless mobile micro
financing
There is no difference
I am not sure
Why do you retain money in Mpesa?
it acts as a savings account
1%
5%
I don’t keep money M-Pesa
18%
49%
It’s expensive to change back to
cash
27%
I will need to transact in M-Pesa
after all
It is safer remaining in M-Pesa
Confirms need for services beyond money
transfer, safety of Mpesa, …?
I will not change to any other MFI if it
does not use mobile phones
Yes
9%
46%
45%
No
Not Sure
Implication?
Key conclusions
• There is evidence of appreciation of the
impact of cash-lite
• There is desire to shift to cash-lite
• There are barriers for BoP to make the
shift
– Notably societal dependence on cash
– Transaction cost for electronic money
• Pegging mobile money to a product
used by BoP makes it easier for them to
appreciate cash-lite!
– They need to experience MM over time to
appreciate
– Is that why Safaricom launched m-shwari?
Going forward…
• Several focus group discussions with
clients
• In-depth interviews with loan officers
• In-depth interviews with management
• Comparison with a few non-Musoni
clients