VisionFund is the latest microfinance organisation to join the cashless banking market. Its clients in Arusha, Tanzania can now receive and pay loans direct from their mobile phones through a the recently developed programme known locally as VFT chap chap (meaning quick quick).
Indeed, the aim of the initiative is to ‘speed up’ loan applications, open up banking to more people in rural areas, and double the ratio of clients per loan officer once the full project has been rolled out.
According to Women’s World Banking, 3 billion people in the world do not have access to affordable, reliable financial products, but 1.7 billion have mobile phones. By allowing clients to access their M-wallet – the use of mobile phones to send and receive money - VFT chap chap means clients no longer have to travel to a branch to receive or pay back a loan, saving them both the time and money.
VisionFund Tanzania is currently rolling out the first of three phases of its mobile banking programme in Arusha, before initiating it in other branches. And a loan officer software app is currently being developed for phase two of the project. When complete, a loan officer will be able to use his or her iPad and ‘app’ to process new loan and savings applications from start to finish. Fingerprinting technology will be used to access and recall client data on existing loans. This will save the MFI costs by increasing productivity of a loan officer and reducing costs in branch.
The third and final stage will allow the MFI to collate and analyse data around its clients and loans, to better understand its microfinance market, and the social impact it is having in rural areas of the country. This data will be used to develop new products according to market needs.
Three quarters of the Tanzanian population live in rural areas, but only 8% have access to financial services. VFT chap chap will give more people access to essential banking needs, allowing them to grow businesses and livelihoods to support their family.