Can you provide people with possibilities?
For the majority of unbanked individuals, the only source of credit is in many cases predatory loans that come with exorbitant interest rates and can be hard to get, even with expensive terms and conditions. Rural customers often have no access to credit at all, despite real need for it due to household needs, variable incomes or other factors.
Mobile money providers in Kenya are in a unique position. The need for their services is great and growing, but so is the competition. How then to distinguish themselves from others?
The answer is mobile lending: fully automated loans that a customer can apply for receive instant approval for and access through his or her mobile money account within minutes.
Whether a customer needs a loan to buy a new product such as a home appliance, pay school fees or take a payday loan, whether they are looking for a duration of one month or six, mobile money providers are already trusted financial services providers and are therefore a logical place to look for that credit. For people who are already using their mobile wallet to pay bills or transfer funds to family members, the ability to take a loan from that same mobile money operator is a factor that can incentivize them to use a given mobile money provider over others.
What is the competitive edge for mobile lending providers?
- creating value for and enabling growth of current accounts
- increasing profitability when done properly
- providing a unique opportunity to engage potential customers
Mobile money providers have the opportunity to be the market leader in many places, providing real value to customers in the form of readily available credit. In return, they create loyal customers who borrow and repay loans regularly, providing a mobile money provider with a product which is cost-effective to operate and profitable in both short- and long-terms.
The question as a financial institution still begs, can you provide people with possibilities?