At Kiva, we value being in tune with the latest news and research about microfinance and poverty alleviation. This Kiva Scholar blog series is designed to share what we've learned with you! In this edition, we take a closer look at mobile banking's potential to change microfinance.

In many microfinance markets around the world, it is becoming increasingly common for clients to have access to mobile banking and other financial services directly on their cell phones. More and more people are able to conduct transactions simply via text message. M-Pesa, a mobile finance provider in Kenya, is a good example of this.

On the ground, this means that a microcredit client can receive a loan almost immediately through a text. She can then take the phone to a participating retail outlet that gives her cash for the credit on her phone. When it is time to make a payment, she is able to use the same method. This secure system reduces travel time, increases productivity and efficiency for both the bank and the client, and cuts costs on both sides.

The bridge between lending institutions and mobile service providers means more choice and the opportunity to reach people in less accessible communities. Innovation and accelerating financial inclusion raises interesting questions like how will this process unfold in different countries and unique markets? And, how will the regulatory approach taken by various governments affect the process?

We're excited to see how mobile banking will change the microfinance landscape and empower even more Kiva borrowers to build businesses and improve their lives.

Want to learn more about mobile banking? Check out these articles on the CGAP Microfinance Blog:

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