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A few comments from the workshop participants

"I found the workshop very informative and useful to my work."

"It would be good to obtain data from the housing sector using the same approaches."

"The tools would be useful in measuring SME segments behaviour and usage
of financial services."

"Using the diaries approaches, it would be useful to make comparisons between bank transactionaldata and e-transactions from the same groups."

"Further research needed using the diaries approach to establish implications on consumer
protection issues."


Financial Diaries Executive Workshop

Nairobi, Kenya (18th May 2011)

On May 18th, FSD together with Microfinance Opportunities, jointly hosted the Kenya Financial Diaries Workshop at the Fairview Hotel. The invitation-only event was very well attended by senior management from over 10 major banks and microfinance organisations (including Equity, Safaricom, Orange, Postbank, KCB, Faulu, KWFT, Coop Bank, K-REP, CBK.). The workshop was expertly facilitated by Guy Stuart (lecturer in public policy, Harvard University) and Monique Cohen (CEO Microfinance Opportunities). It involved a number of interactive sessions in which the audience participated with plenty of enthusiasm and debate!

One of the workshop facilitators Monique Cohen (right), in discussions with participants during an interactive group session.

The workshop had two main purposes. Firstly, it was geared to familiarising the banking and microfinance industry in Kenya with the Financial Diaries tool. The financial diaries research approach is based on collecting detailed data on how households manage their financial flows. Financial diaries can give us data on constraints to usage including how transaction fees shape the pattern of deposits, withdrawals and remittances; weaknesses in existing product offers, whether products are meeting the real needs of the market and a better understanding of the competitive landscape by showing what financial services customers actually use to cover their needs. Given that market penetration for BOP segments is still well below par, this kind of research methodology is invaluable. The facilitators were at pains to impress on the participants the potential value their own transactional data in enabling them to better identify market opportunities and tailor products to better serve the needs of existing customers and increase market share.

Secondly, the facilitators presented initial high level findings from a Microfinance Opportunities Financial Diaries research exercise on a mixed population of M-PESA and non-MPESA users in Western Kenya:

  • Cash is King: 95% of transactions are still in cash (only 5% go through M-PESA).
  • Low income households handle a lot of cash: median handled per week is Ksh 4,230 (median net income is Ksh 1,372 per week).
  • 80% of e-money flows are within families or between friends: One implication of this scenario is that products and services need to be designed for social networks not just for individuals.
  • The e-money loop is short: 75% of M-PESA remittances are cashed out, mostly within a day (median daily balance is KSh 173); but business remittances are more likely to be ‘on-sent’.
  • M-PESA users are less vulnerable to health shocks: there is some evidence that households with M-PESA are less vulnerable to risk, due to the fact that they can quickly mobilise funds and pay hospital bills through M-PESA mitigating potentially life-threatening delays.
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