Does social fintech have a real impact?

The increasing utility of mobile money technology in every facet of our lives continues to grow, especially the role of the innovation in deepening social ties and breaking societal barriers.

Mobile money platforms, apart from their key role in facilitating payments and trade, play a big role in fostering emotional support and social relationships through transfers meant for household emergencies, school fees, medical bills and fundraisers towards various societal challenges.

Many of us have helped bail out family, friends or complete strangers via mobile money platforms.

School fees for scores of bright, but needy students have been raised through mobile cash: it simply takes an appeal on social media platforms such as WhatsApp, Facebook or Twitter, and a number to send the cash to.

The same applies to calls to raise cash to settle medical bills. Kenyans have even responded to a national disaster via mobile cash, raising Sh500 million in two weeks to support their fellow countrymen during the 2011 drought crisis.

This means that fintechs need to quickly embrace this new social reality in developing their products and solutions. Time is ripe to scale up fintech solutions to support philanthropy and address societal challenges.

Just the way telcos and fintechs have developed platforms to help pay for rent, shopping, electricity and water bills, receive and send remittances, there is need for dedicated solutions to help streamline social bailouts and mobile-powered philanthropy.

There a few players who begun working in this field, but there is need for more innovation. M-Changa, a silicon savannah-born online fundraising app which helps Kenyans raise cash to meet various causes. Funds are collected digitally via all mobile money platforms including M-Pesa, Airtel, Equitel, T-Kash as well as cards.

Wapi Capital has also partnered with F4E to help solve for payments towards school meals for leaners, mostly from disadvantaged backgrounds through a programme called Tap2eat which also interacts with mobile money.

There is also Kalamu Initiative, a community project which seeks to provide pens to learners from poor backgrounds. Well-wishers send cash to a paybill number linked to Kartasi Industries, which in turn supplies pens at a discounted price to the project. There is empirical evidence that digital money transfers strengthen emotional support and social relationships, according to a research paper by Sibel Kusimba of the American University.

Digital funds drive and mobile-powered philanthropy are also seen as dignified – contributors can send any amounts they affords without feeling intimidated if they were to publicly announce their giving at a ‘harambee’.

They are also cost-effective, as there is no need for a physical location and event – which comes with added costs. It is also seen as convenient, given that users can send cash from the comfort of their homes, offices or on the go.

The possibilities for digital/mobile cash to transform societal needs are endless.