Mobile phones help Kenyans receive micro loans

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Micro Loan Lending & Interest Rates

The business of microlending – or lending small amounts to residents of developing countries – began in the 1980s with the Grameen Bank. Non profits have continued to expand this service by offering payments with low interest rates to help those in need of only a small loan expand or start a business. But even though this has been around for decades, there are still new developments. Technology, such as application processing software, has helped bring down interest rates even more. Additionally, as one micro loan recipient found, cell phones have made their way into the industry as well. 

A story in Dawn News, a Pakistani news source, described the story of Kenyan Adhiambo Achieng. After being turned down by a bank for a loan, she applied through an application on her phone called M-Shwari. Those who use the country's biggest telephone service provider, Safaricom, can deposit funds, earn interest and borrow money through their phones. 

"With a minimum transfer of cash set at five shillings – around USD 5 cents  – the application revolutionized day to day banking for millions left out of the formal system, and is used for transactions ranging from sending money to far-away relatives to paying utility bills or even school fees," the news source explained. 

Achieng was applying for the funds to expand her fruit and vegetable stand, but had been turned down because her income is too low. With her new loan, though, she has an interest rate of 7.5 percent – much smaller than other banks. The loan is required to be paid back in one month. 

The service began in 2007, and since then, more than 70 percent of Kenyans have a mobile phone in the rural community. That helps this application reach significantly more people than a traditional bank, and consequently, bring loans to more people.

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The business of microlending – or lending small amounts to residents of developing countries – began in the 1980s with the Grameen Bank. Non profits have continued to expand this service by offering payments with low interest rates to help those in need of only a small loan expand or start a business. But even though this has been around for decades, there are still new developments. Technology, such as application processing software, has helped bring down interest rates even more. Additionally, as one micro loan recipient found, cell phones have made their way into the industry as well. 

A story in Dawn News, a Pakistani news source, described the story of Kenyan Adhiambo Achieng. After being turned down by a bank for a loan, she applied through an application on her phone called M-Shwari. Those who use the country's biggest telephone service provider, Safaricom, can deposit funds, earn interest and borrow money through their phones. 

"With a minimum transfer of cash set at five shillings – around USD 5 cents  – the application revolutionized day to day banking for millions left out of the formal system, and is used for transactions ranging from sending money to far-away relatives to paying utility bills or even school fees," the news source explained. 

Achieng was applying for the funds to expand her fruit and vegetable stand, but had been turned down because her income is too low. With her new loan, though, she has an interest rate of 7.5 percent – much smaller than other banks. The loan is required to be paid back in one month. 

The service began in 2007, and since then, more than 70 percent of Kenyans have a mobile phone in the rural community. That helps this application reach significantly more people than a traditional bank, and consequently, bring loans to more people.

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The business of microlending – or lending small amounts to residents of developing countries – began in the 1980s with the Grameen Bank. Non profits have continued to expand this service by offering payments with low interest rates to help those in need of only a small loan expand or start a business. But even though this has been around for decades, there are still new developments. Technology, such as application processing software, has helped bring down interest rates even more. Additionally, as one micro loan recipient found, cell phones have made their way into the industry as well. 

A story in Dawn News, a Pakistani news source, described the story of Kenyan Adhiambo Achieng. After being turned down by a bank for a loan, she applied through an application on her phone called M-Shwari. Those who use the country's biggest telephone service provider, Safaricom, can deposit funds, earn interest and borrow money through their phones. 

"With a minimum transfer of cash set at five shillings – around USD 5 cents  – the application revolutionized day to day banking for millions left out of the formal system, and is used for transactions ranging from sending money to far-away relatives to paying utility bills or even school fees," the news source explained. 

Achieng was applying for the funds to expand her fruit and vegetable stand, but had been turned down because her income is too low. With her new loan, though, she has an interest rate of 7.5 percent – much smaller than other banks. The loan is required to be paid back in one month. 

The service began in 2007, and since then, more than 70 percent of Kenyans have a mobile phone in the rural community. That helps this application reach significantly more people than a traditional bank, and consequently, bring loans to more people.

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The business of microlending – or lending small amounts to residents of developing countries – began in the 1980s with the Grameen Bank. Non profits have continued to expand this service by offering payments with low interest rates to help those in need of only a small loan expand or start a business. But even though this has been around for decades, there are still new developments. Technology, such as application processing software, has helped bring down interest rates even more. Additionally, as one micro loan recipient found, cell phones have made their way into the industry as well. 

A story in Dawn News, a Pakistani news source, described the story of Kenyan Adhiambo Achieng. After being turned down by a bank for a loan, she applied through an application on her phone called M-Shwari. Those who use the country's biggest telephone service provider, Safaricom, can deposit funds, earn interest and borrow money through their phones. 

"With a minimum transfer of cash set at five shillings – around USD 5 cents  – the application revolutionized day to day banking for millions left out of the formal system, and is used for transactions ranging from sending money to far-away relatives to paying utility bills or even school fees," the news source explained. 

Achieng was applying for the funds to expand her fruit and vegetable stand, but had been turned down because her income is too low. With her new loan, though, she has an interest rate of 7.5 percent – much smaller than other banks. The loan is required to be paid back in one month. 

The service began in 2007, and since then, more than 70 percent of Kenyans have a mobile phone in the rural community. That helps this application reach significantly more people than a traditional bank, and consequently, bring loans to more people.

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The business of microlending – or lending small amounts to residents of developing countries – began in the 1980s with the Grameen Bank. Non profits have continued to expand this service by offering payments with low interest rates to help those in need of only a small loan expand or start a business. But even though this has been around for decades, there are still new developments. Technology, such as application processing software, has helped bring down interest rates even more. Additionally, as one micro loan recipient found, cell phones have made their way into the industry as well. 

A story in Dawn News, a Pakistani news source, described the story of Kenyan Adhiambo Achieng. After being turned down by a bank for a loan, she applied through an application on her phone called M-Shwari. Those who use the country's biggest telephone service provider, Safaricom, can deposit funds, earn interest and borrow money through their phones. 

"With a minimum transfer of cash set at five shillings – around USD 5 cents  – the application revolutionized day to day banking for millions left out of the formal system, and is used for transactions ranging from sending money to far-away relatives to paying utility bills or even school fees," the news source explained. 

Achieng was applying for the funds to expand her fruit and vegetable stand, but had been turned down because her income is too low. With her new loan, though, she has an interest rate of 7.5 percent – much smalle
r than other banks. The loan is required to be paid back in one month. 

The service began in 2007, and since then, more than 70 percent of Kenyans have a mobile phone in the rural community. That helps this application reach significantly more people than a traditional bank, and consequently, bring loans to more people.

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