Simple MFI and M-Pesa: Mobile innovation at Juhudi

Juhudi staff show a client her repayments in Simple MFI

Originally published on the Acumen Fund blog on July, 2011.

One of our greatest challenges at Juhudi Kilimo is sheer distance. Our field offices serve wide regions and instead of requiring each client to come to us, our loan officers travel for hours a day to reach clients at their group meetings and farms. Loan officers generally wear through a pair of shoes every two to three months going by matatu (bus) to boda boda (motorbike) and then foot down a dirt road to make their way to clients in very rural areas. Juhudi loan group Treasurers likewise make a long monthly trek into town to deposit their group’s repayments and miss hours of time better spent on their businesses.

We’ve been lucky, however, to attract extraordinary talent to come from around the world to Kenya and help us design and implement innovative mobile solutions. Simple MFI and M-Pesa implementation are two of the projects we’re currently working on.

Simple MFI

Most microfinance loan officers maintain everything on paper, with a handwritten ledger. When it’s time to attend a meeting, the officer will go through the financial records of up to 30 clients to sum up their savings and calculate loan payments. Officers end up doing all of this paperwork by hand, even though the head office often has all of this information in a database. A typical loan officer attends 40 or more group meetings a month so this work really adds up.

Clients view in Simple MFI

Kevin Gibbs, a developer on sabbatical from Google who has spent the last few months volunteering at Juhudi, observed these processes after spending time in our field offices and created Simple MFI. This open source Android application holds all of the client information that a loan officer needs. Each day, it synchronizes automatically over the Internet with the database. It runs on any Android phone, but has been particularly designed to run well on a sub-$100 IDEOS phone. To save costs, the app can work completely offline, running off a database on the phone's local storage, so that no connectivity is needed to look up a client’s balance or a group’s repayment schedule. Ultimately, this will make it possible for a loan officer to no longer need to record anything on paper. The long-term goal is to make a loan officer’s job easier so they can focus on what really matters: working with clients.

Download Simple MFI: Simple MFI, and the related Manta Sync, are available free to download from Android Market.

M-PESA

Juhudi Kilimo is also beginning to offer mobile payments using Safaricom's M-PESA platform. M-PESA is the most widely used and accessible payment platform in Kenya, with over 14 million users, and 28,000 agent locations across Kenya. This makes it larger than all the commercial banks and money transfer agents combined. 

Thanks to the Acumen Fund, Ghalib Hafiz has joined Juhudi from McKinsey & Company to help us make some critical improvements to our operations in the coming months, including mobile payments. M-PESA will have a tremendous direct impact—reducing transportation costs and making payments truly convenient. Currently, clients must use Juhudi’s established banking channels in a major town. This often requires that the treasurer travel between two and four hours to make the group’s payments. For many of Juhudi’s clients, the savings in transportation costs alone will offset M-PESA small fees. Juhudi has also integrated with Safaricom's database so that any payments made through M-PESA feed directly and seemlessly into Juhudi's systems—and then to our loan officers via Simple MFI.