Making New Markets for Financial Services Possible

KCB’s Experience with Data

Financial service providers are becoming increasingly aware of the value of data for financial inclusion. Utilising data and drawing on the power of analytics enables financial service providers to better understand consumers, and thus create products that are more affordable, accessible and appropriate to the needs of the underserved. At KCB we are no exception to this trend. 

In March 2015, KCB Bank Kenya Limited (KCB), the largest indigenous bank in the East African region by assets and profitability, teamed up with the telecommunications giant Safaricom to launch KCB M-Pesa. KCB M-Pesa is a savings account that allows customers to access loans up to the value of US$ 9 864 instantaneously using their cell phones. Two things differentiate KCB M-Pesa from similar services: its flexible repayment periods and the ability to access the loan through a KCB branch or agent. One and a half years after its launch, there are over 7 million KCB M-Pesa accounts.

As part of The MasterCard Foundation’s Symposium on Financial Inclusion, taking place in Kigali, Rwanda from 19 - 21 October 2016, I will represent KCB in a panel discussion on deploying data to understand clients better. The session, which will take place on Thursday 20 October, will look at how new data sources can be used by financial service providers to better understand customers’ financial behaviour, needs and preferences. We will share the experience of KCB M-Pesa and how we use data to better understand who our customers are, how often they use our services and for what purpose. I will also share new insights from our latest initiative, KCB MobiGro, which uses internal account information with new data from farmer cooperatives to understand the financial behaviour, habits and needs of smallholder farmers.

While KCB-Pesa is quite a well-known initiative, KCB MobiGro is a new programme funded through a US$ 30 million partnership with the MasterCard Foundation to extend financial services to two million smallholder farmers in Kenya and Rwanda. Under the programme we plan to disburse US$ 200 million in credit to farmers. KCB MobiGro will enable small-scale farmers to access financial services, such insurance, credit and savings through the mobile phone via our M-Kulima platform. The M-Kulimaplatform will allow farmers to share and access information on crop and livestock management, pricing, produce markets, production improvement and agricultural and entrepreneurship training sessions.

To help us make the most of the data we have available to expand the reach of the KCB MobiGro product, we signed an MoU for technical assistance with the insight2impact (i2i) data facility. Under the MoU, i2i is working with Pula Advisors, a data analytics provider in Kenya, to segment a list of farmers from our current database of accounts and transactions, which will allow us to use client data in order to grow the existing coverage of this product.

Although this project is still in its infancy, there are already some exciting findings we can share. Where we had previously identified just 187 agribusinesses within our existing data, for example, we have now classified over 6 000, following just one week of data mining. These preliminary findings already illustrate the power of data and analytics. With these findings, KCB is looking at scaling up the agribusiness function and reach out to a wider audience of farmers.

Paul is a Senior Strategy Manager at KCB Bank Kenya