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Sunday 8 February 2015

Microfinance institution to expand beyond tea sector


Greenland Fedha Limited (GFL), a microfinance institution for small-scale tea farmers in Kenya, has implemented a new software solution to improve its efficiency and remain competitive in the market. According to the institution, it had chosen the Microsoft Dynamics NAV platform.


Greenland Fedha Limited (GFL), a microfinance institution for small-scale tea farmers in Kenya, has implemented a new software solution to improve its efficiency and remain competitive in the market. According to the institution, it had chosen the Microsoft Dynamics NAV platform.

GFL is wholly owned by the Kenya Tea De v e l o p m e n t Agency (KTDA) Holdings and provides financial services to the tea sub sector in the country. According to GFL, the institution is unique in that it offers its loan recipients the option to apply for and repay their loans using green leaf as collateral, with specific formulas in place to work out the interest and repayment rate. The manual system it had in place, prior to the installation of the new system, was cumbersome to log loans, work out interest rates, manage inventory and run the business effectively. This made it challenging to compete with commercial banks and other microfinance lenders.

Most notably, GFL was able to build a mobile payment solution with the help of the latest system. “This has changed the way we operate because we are now able to get money to farmers regardless of whether they have a bank account or how remote their farms are – by simply paying the money directly into their mobile phones. It’s also now possible for our customers to access the system on the go and work out their qualifying loan amount and repayment installment,” explains Waiharo. The mobile solution has been such a success that GFL has developed a separate mobile sales unit. Kunle Awosika, Country Manager, Microsoft Kenya says, “A recent study from the Boston Consulting Group states that SMEs that embrace technology can increase revenues 15 percentage points faster and create jobs almost twice as fast. SMEs like GFL are contributing to a growing economy across the world and especially an economy like Kenya, where their contribution adds about 40% to the GDP”.

According to Waiharo, “Thanks to GFL’s implementation of the latest system, the MFI sales volume has increased and its business processes have become more streamlined, flexible and efficient. The software’s scalability also means that GFL can progress with its future plans to build its versatile mobile banking platform that is can expand beyond the tea sector.

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