Making microcredit mobile: DFID and Vodafone in Kenya and
Tanzania
Related pages: Kenya
country profile | Tanzania
country profile | MDG 8: Aid, trade,
growth and global partnership
Image courtesy of textually.org
Businesses in tiny villages throughout Kenya and Tanzania may soon be able to settle their bills by text
message through a  Vodafone project backed with almost £1m from DFID's Financial
Deepening Challenge Fund (FDCF).
FDCF
is a cost-sharing grants scheme which encourages the private sector to
contribute to the achievement of poverty eradication.
Vodafone applied to FDCF with an idea to pilot a mobile microfinance project
in Kenya in 2005, with a view to expanding it to cover other African countries
if it takes off.
What it hopes to do, in collaboration with Safaricom, Vodacom (the network
operators) and financial institutions, is to make it much easier for micro-finance customers in rural
areas to manage their accounts when it suits them.
Initial progress has been promising since the project started in December
2003 - the pilot should enter the Kenyan market in mid 2005.
Key facts
- £910,000 was provided by DFID for the mobile microfinance project, with
£990,000 from Vodafone
- Vodafone and Safaricom will test their text message system on 1,000 Kenyan
customers from June 2005 - and then extend this to other areas soon after
- According to the UN, only 3 per cent of people who could benefit from
small-scale lending are able to do so despite micro-credit being widely
regarded as a key contributor to economic activity
- More details can be obtained from Nick
Hughes, Head of Social Products and Enterprise
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