MICROCAPITAL BRIEF: MasterCard Pilots Kionect Digital Platform with Microbusinesses in Nairobi, Kenya, in Partnership with Microfinance Institution Musoni, Distributor Kaskazi, Diamond Trust Bank

US-based financial technology firm MasterCard recently began pilot testing a platform called Kionect, which allows kiosk owners in Kenya to use short message service (SMS), also known as text messaging, to buy products from the Kaskazi Network, a Kenyan wholesaler. The test customers include 1,000 microenterprises in three of Nairobi’s informal settlements, Kariobangi, Kawangware and Kibera. The system allows the traders to build a digital history of product orders, which the microfinance institution Musoni Kenya will consider in the microloan application process. Kenya’s Diamond Trust Bank (DTB) is facilitating Kionext payments.

Mastercard, founded in 1966 and headquartered in the city of Purchase, New York, operates in 210 countries.

Musoni Kenya is a subsidiary of Musoni, a software and technology provider based in the Netherlands that creates “mobile money transfer systems” software. Its Kenyan unit aims to “expand financial outreach in rural areas,” via “cashless, paperless and data-driven” services. As of 2016, Musoni Kenya had 20,500 active borrowers and depositors, a gross loan portfolio of USD 7.9 million and USD 2.9 million in deposits.

DTB Group, founded in 1946, has operations in Burundi, Kenya, Tanzania and Uganda and is headquartered in Nairobi, Kenya. As of 2017, DTB has total assets of USD 3.4 billion, customer deposits of USD 2.5 billion and net loans to customers of USD 1.9 billion.

The Kaskazi Network is a wholesaler in Kenya that specializes in last-mile distribution and delivery. Additional details on the firm are not available.

By Ryan Gauthier, Research Associate