Growth & Technology in Kenya
July 2014

- KIVA FELLOWS BLOG - 

On a recent trip out of Nairobi, we arrived in Eldama Ravine, a small town of around 15,000 people in Kenya's Rift Valley Province. On our arrival we were greeted by Benson, the local loan officer for SMEP Microfinance Bank, who proudly walked us down Eldama Ravine's main street, into a building containing a general store and an education centre, and up two flights of stairs to a small office overlooking the busy local market.
That morning Benson was just beginning his second day in SMEP's newest branch, and despite a lack of electricity and furniture, he was proud to finally have a place to call his office. Over the previous twelve months Benson had been working without an office, and yet had successfully grown SMEP's regional presence to encompass 36 groups of borrowers ranging in size from 8 to 30 members and covering an area of over one thousand square kilometres. While Benson’s success had undoubtedly been a consequence of his strong work ethic, it’s worth noting that it wouldn’t have been possible without access to modern technology. Throughout the previous year, Benson was reliant on a local internet cafe to access his emails, and coordinated day to day operations from his mobile phone. His story is by no means unique, with technological access in Kenya growing at a significant rate. Internet use in Kenya over the past decade has grown from 3% in 2004 to just over 43% in 20141. The number of people with mobile phone subscriptions has also increased more than tenfold over the same period, rising from 7% to 73% today.
This explosion in mobile phone ownership, and increasingly in smartphone ownership has been driven simultaneously by a growing middle class and the falling cost of handsets. The implications for Kenya’s people are significant, but arguably of equal significance are the new opportunities opening up for Kenya’s growing businesses. SMEP Microfinance Bank is particularly aware of this opportunity, and in recent months has issued customised handsets to all its loan officers across the country. The handsets allow them to take client photos, report repayments directly from the field to head office in Nairobi, and even to print receipts for borrowers via small handheld wireless printers; work which previously required time, significant travel and multiple devices. For SMEP, these efficiency savings are crucial in freeing up resources to reach more communities and help more people, as well as improving the consistency and quality of existing operations.
In Eldama Ravine, later that day, Benson took us to meet a client who had received a loan through SMEP, financed by Kiva through the Kiva.org website. Divinah lives on the outskirts of Eldama Ravine, has four children ranging in age from 10 to 22, and runs a small tailoring business, making and mending clothes. She is part of a group of borrowers called Ravine Umoja, "Ravine As One”, and is currently repaying her third loan. I had brought with me a paper printout of Divinah's profile from Kiva.org, and she listened with interest as I explained that the small thumbnail images at the bottom of the page were pictures of the people who had read her story and had wanted to fund her loan. For Divinah, access to affordable credit has allowed her business to grow and enabled her children to attend school, and again this is due in part to the connection and facilitation offered by technology.
As we sat down in Benson's office, he took his seat behind a desk he'd borrowed from a neighbour, retrieved his mobile phone, loan officer handset and wireless printer from his bag and got to work. The opening of the office in Eldama Ravine represents the latest step in SMEP's continued expansion across the country, extending its reach further into rural Kenya and improving financial access for Kenya's hardest-to-reach citizens. In the country that brought the world M-Pesa, a mobile banking system whose transactions now account for over 40% of Kenya's economy2, it's great to see technological innovation continuing to increase access and opportunity for everyone.
[1] The World Bank: World DataBank | World Development Indicators —databank.worldbank.org
[2] The Economist: ‘The end of a monopoly’ — http://www.economist.com/news/special-report/21601624-and-no-end-new-ways-pay-your-bills-end-monopoly
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