Musoni – a completely cashless microfinance institution

22 8 10 2 2

Musoni, a completely cashless microfinance institution, began in Netherlands by Musoni Investments 5 years ago, and is now one of the most rapidly growing microfinance institutions in the country. Musoni is completely mobile as all of the transactions are done using mobile money transactions. It is the first in the world to implement this kind of model. In this segment of the BRAC Frugal Innovation Forum at Dhaka, SocialStory talked to James Onyutta. James is the Chief Executive Officer of Musoni in Kenya.

James Onyutta

James Onyutta

James Onyutta explains the origin of the word Musoni – the ‘M’ stands for mobile and ‘usoni’ means future in Swahili, thus collectively meaning mobile future. He talks about Musoni’s unique cashless model, about the difficulty of business in Sub Saharan Africa and explains why earlier microfinance operations found it a challenge to expand to rural areas. Musoni was started in May 2010 in the outskirts of Nairobi, and worked to prove the Musoni model. Along the way, James talks about the learning experiences that they have had and how they had to acclimatise people to using mobiles for financial transactions.

Musoni now has ten offices with five branches. This progress, according to James, makes them look toward the future where they hope to scale up to much more rural areas. They have also not eliminated meetings, he adds, because Musoni understand and respects that microfinance is still a business that requires human contact. They have field officers but in case a customer finds a concern unaddressed by the field officer, they have the choice of going to a branch office. One of their greatest learnings that James discusses in this video is the important role that SMS or Short Message Service played as a communication channel. Musoni’s payment rates are over 99%, James says.

Musoni is proving that cashless money works and through that, changing the way the microfinance world works. The model creates financial inclusion and affordable microfinance services. They aim to breach the gap between rural people who are unbanked and microfinance services, James tells SocialStory as a last remark.

Watch the video to learn more about the cashless microfinancing done by Musoni.

This article is part of a series of interviews that were taken at the 2014 BRAC Frugal Innovation Forum: Scaling Digitally. Please visit here to find other articles in the series.