In a case study of Kenya’s relatively new “Musoni” service for IMTFI’s Working Paper Series, Tonny Omwansa and Timothy Waema investigate how micro-finance institutions (MFIs) are increasingly turning to cashless approaches such as mobile money to better serve BoP (bottom of the pyramid) clients. Musoni exclusively uses mobile money in provisioning micro-finance, thereby eliminating some administrative costs and making transactions more efficient for its clients. [image_with_animation animation=”Fade In” image_url=”https://musonisystem.com/wp-content/uploads/2015/06/Musoni.jpg” delay=””] [/image_with_animation]Omwansa and Waema find that Musoni’s clients come to appreciate the range of financial products that the MFI offers more when they are bundled with mobile money, and furthermore that mobile money helps demonstrate the value of using the electronic channel for their financial activities. Moreover, they observe that Musoni clients increase their savings activities as a result of using mobile money.
Despite these promising developments for financial inclusion, the authors conclude that mobile money can never fully replace cash, and that Kenya’s poor need some combination of the two because they each fulfill different, important roles in their financial lives.