On an otherwise reasonable evening, more than 1,000 people packed an auditorium in Boulder, Colorado, for the culmination of the 2012 Unreasonable Institute. They came to see 23 ventures present their solutions to some of the world’s greatest challenges.
Cameron Goldie-Scot, CEO of Musoni BV, shares how his venture is revolutionizing the financial sector in the developing world through mobile technology.
Musoni is a social enterprise that establishes best-practice microfinance institutions and uses technology to lower costs, reduce risk and improve efficiency. In 2009, Musoni set up the first cashless Microfinance Institution (MFI) in the world, using mobile payments for all transactions. Since then, Musoni has disbursed over 10,000 loans to Kenyan micro entrepreneurs. In the year 2011 Musoni lent more than $2m and won the award for ‘most innovative use of technology’ at the 2011 Global Microfinance Achievement Awards. Musoni BV is now looking to expand its operations into multiple countries, to continue developing its innovative IT platform and to also make its functionalities and services available to third parties.
What is the urgent social or environmental need you’re addressing?
Microfinance has grown to an industry of an estimated 10,000 Microfinance Institutions (MFIs) with €35 billion of outstanding loans. It plays a key role in expanding access to financial services, yet all too often is limited in outreach, expensive, inefficient and bureaucratic. Many microfinance institutions still rely upon outdated and time-consuming processes (such as manually entering repayment slips) and almost all struggle to manage and develop their IT systems. This results in poor products and services for clients, with large amounts of time spend travelling and queuing (both an inconvenience and a security risk), servicing loans that are expensive and non-transparent.
What is your solution to this need? Describe your business strategy.
The use of mobile payments enables seamless and efficient data handling, translating into significant savings in back-office operations. There is less room for errors and fraud and data is available on a near real-time basis. In addition it reduces the time consuming process of loan disbursements and loan repayments and eliminates the inherent risks of cash handling.
Musoni uses technology to lower costs, reduce risk and improve efficiency. We are the first MFI in the world to use mobile payments for all transactions, reducing back-office costs and improving security and flexibility for our clients. Our IT system is easy to use and provides up-to-date information to field staff in real time. Automated SMSs assist in managing portfolio quality. We pass on these cost savings to our clients, resulting in lower interest rates.