Kenyans turn to phones for cheaper credit

By Standard Reporter

More Kenyans are increasingly using the advantages of technology to access financial services.

While banks are the preferred source of loans in most developed countries, high poverty rates have meant that the majority of Kenyans do not have accessing to credit.  But that is changing with the country witnessing growing innovations aimed at enabling more mobile phone users access affordable credit with ease.

Joyce Wangui is one such innovator who has developed a technology that allows the low-income segment of the population to access small loans through mobile phones.

The product targets those that do not qualify for loans under normal banking situations.  She is the chief executive officer of Pata Pesa, a firm that leverages on faith and trust to circumvent the bureaucratic challenges associated with normal bank loans.

“Through Pata Pesa, one can access short terms loans from their local shopkeepers without any collateral as long as they own a mobile phone,” Wangui said. 

According to the Communication Commission of Kenya statistics,  there were 29.2 million subscribers as of March. This outstrips the 12 million of the 38 million people with bank accounts.  As a result, more people are accessing credit through technology-supported facilities than from normal banks.