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How fintech has increased financial inclusion in Kenya

kcb chama

KCB's Mobi Chama is a digital service for investment groups. PHOTO | KCB

The excitement around fintech is not without merit. Fintechs are innovating at every step of the financial services value chain, often through new value propositions, including flexible products and better ways to address the financial challenges faced by low-income customers. They are making financial services more affordable and accessible.

They are improving the customer experience of financial services and accelerating use and engagement. They are also building the groundwork, including easier digital identity verification, collaborative customer due diligence, data sharing, and payment schemes, that can catalyse a host of financial services

Over the past decade, increased adoption of financial technology has shown over and over that if well channelled, it has the unique capability to extend financial inclusion, simplify life and spur growth. Consequently, this would go a long way in transforming millions of lives and most importantly, bring the world closer together to enable seamless business transactions.

The digital revolution has allowed us to take banking from way beyond the bricks and mortar branches and way beyond the rich or capable right into the palms of customers from all walks of life, enhancing financial inclusion.

“Fintech is giving the choice to enable access to useful financial products such as credit to communities, individuals or businesses. There are some communities who are disenfranchised from mainstream financial services for one reason or the other, either because of the level of income they are making or because of their geographical location.

“Financial inclusion entails adding as many people as possible into the ecosystem so as to give them access to finance to grow and improve their lives and even their businesses. At KCB we have enabled financial inclusion by making financial services accessible through mobile, available, affordable so as to reach the disenfranchised, and we create awareness about our products and services so as to make sure everyone knows that they qualify,” said Angela Mwirigi, Director, Digital Financial Services.

KCB believes that digital innovation is transforming economies and if harnessed properly, will transform Africa too, helping our economy and the entire continent leapfrog the traditional development path.

“As a bank, we have been making strides in optimizing our digital propositions in order to deliver services to more and more communities. Under the banner of ‘digital first and fast’, we have accelerated our propositions bringing agility and efficacy in our financial offering to meet the quickly evolving set of customer expectations,” she said.

Today, we have platforms such as VOOMA (a digital platform for lending, savings and payments), MobiGrow (an agribusiness fintech platform), Mobi Chama (a digital service for investment groups) and Jaza Duka (a retailers’ cashless platform) among others. This is in addition to KCB Mobile banking which offers extensive digital services to our bank’s customer base across the region of Eastern Africa and KCB M-PESA.

We have also just revamped our internet banking by launching an iBank app which has a more user-friendly interface, availing more services and faster payment processing compared to the previous platform. The app which is available on both android and IOS will make the internet banking platform more convenient and easy to use as the customers will no longer have to search for the internet banking URL to access the service.

In 2015, the bank launched KCB-MPESA, a loans and savings mobile money product that empowered previously unbanked customers – the ones who could not afford to open and operate an account in the days we operated purely on the mortar and brick branches – to open accounts. When we debuted, KCB had garnered four million customers in its history spanning more than 100 years. In the last five years, we have been able to onboard another 16 million customers thanks to mobile digital technologies.

Transactional activities continue to shift away from branches, with tech-backed non-branch transactions— mobile, agency banking, point of sale terminals and ATMs, standing at 98% of total volumes, compared to 2% handled at the branches. These numbers signify the need and impact technology has on the communities we serve when incorporated effectively.

Fintechs drive digital financial inclusion which could significantly contribute to economic growth, reduce poverty and narrow income inequalities without necessarily causing adverse effects on financial stability given the appropriate regulatory framework.