Innovation That Matters

Short-term loans for Kenyan entrepreneurs through mobile banking


Greenshoe has developed an app for integrating short-term loans into a rapidly expanding mobile banking culture.

In Kenya, traditional banking methods are being superseded by mobile banking apps such as M-PESA, which allow users to pay bills, transfer and even withdraw money by simply using their smartphone. However, gaining a credit history can be problematic in countries where credit cards are not a part of everyday life. Saida is an app that integrates with M-PESA, and allows users access to short-term loans that are calculated based on their phone data.

Saida uses phone data as a proxy for credit suitability. Information such as how regularly a user tops up, data usage and phone model is used to calculate how much money a user can borrow. Greenshoe, the company founded by Kenyans Kyale Mwendwa and Kenneth Ngetha, has developed Saida with backing from Y Combinator. Ngetha explains: “The information that [users] are able to share is how they are using their cellphone plan. That tells us a lot about their income cycle and how much they earn.” Based on the user’s phone data, a maximum loan amount is then made available for the user to transfer into their M-PESA account, which they must pay back in four weeks. With many Kenyans living in rural villages, Saida offers a convenient alternative to travelling and queuing for banking services.


With mobile banking use continuing to expand in Kenya and other developing nations, Saida could become a valuable tool in supporting emerging entrepreneurs in rapidly expanding markets. Could this scheme work in developed nations, too?



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