Issuing loans through mobile phones will ease processing as well as repayment with the default rate increasing, says Women Enterprise Fund’s chief executive Samuel Wainaina.
According to Wainaina, the applying and processing period currently takes 90 days, a period that could be easily cut using mobile technology.
“The time taken to apply and process a loan takes three months. But if mobile phone technology is adopted, it will shorten the period,” he said.
Women Enterprise Fund, a state-run women-focused financial institutionthat was allocated KSh440 million (approx. $5.08 million) in the current financial year, has come under fire from women who claim they are yet to benefit from the funds.
There has also been dispute over the chosen beneficiaries of the fund, including the Family Bank, Co-operative Bank and Kenya Industrial Estate, with members of the public preferring savings and credit cooperative societies (SACCOs).
The increased use of mobile money in Kenya, which has over 15 million customers with seven out of 10 adults using the service, is attributed to causes such as difficulties in using the formal banking system.
The use of phones to issue loans, it is hoped, will benefit more women, with Kenya’s mobile phone penetration having surpassed 30 million as of December 2012, according to the Ministry of Information and Communications.
The new strategy comes as Wainaina urged women to seek expert advice before taking loans for agribusiness.
“Let farming not be the farming you have been doing in the past, technology and agribusiness ought to be embraced to practice lucrative business,” he said.