Jamii Bora: Biometrics in Microfinance

As part of the Tech4Society conference on mobile technology held in Nairobi earlier this year, a group of us (Ashoka and Lemelson Staff, as well as Ashoka-Lemelson Fellows) were privileged to visit a branch of Jamii Bora, the largest and fastest growing microfinance institution in East Africa. "Jamii Bora" literally means “Good Families” in the language of Kiswahili, and was founded by Ashoka Senior Fellow, Ingrid Munro in 1999. We wanted to get an up close look at what made this organization successful, and we were not disappointed.

As we pulled into the parking lot, we were welcomed by a crowd of people including young men in dusty t-shirts, a beautiful and statuesque woman dressed in red, older women, and a short woman in a professional grey suit with a warm smile who led the group. It took a few minutes to realize they were dancing and clapping for our arrival and we stepped off the bus gingerly, not sure how to react. We shook hands, hugged, and let ourselves be swept inside.

The bank itself had the industrial, cavernous feel of an underfunded office building. Amongst the plastic white tables and folding chairs sat loan officers with their clients. Most conspicuous was the absence of computers; there were none that we could see. Yet, despite appearances, we were standing amidst one of the most sophisticated banking systems in the world.

Jamii Bora is a microfinance institution, comprehensive health and disaster insurance provider, business academy and real estate developer serving over 235,000 former beggars, prostitutes, thieves, and other extremely poor clients across Kenya. Everyone who works for Jamii Bora is a beneficiary of the institution -- they do not hire from outside. For example, the smartly-dressed woman who greeted us turned out to be the branch manager and former Jamii Bora client, and only had four years of formal primary schooling.

"This is the Point of Service (POS) machine," the manager said as she held up a key to Jamii Bora's business model. Armed with hand-held POS devices, Jamii Bora’s staff can connect clients to services at branch locations and in the field. Each member of Jamii Bora is issued an identity card embedded with a biometric reading of their fingerprint. To deposit or withdraw funds, Jamii Bora staff simply swipe the biometric card on the POS, open the member’s account and record the transaction. To confirm and authorize the transaction, the Jamii Bora member must press their thumb to the POS machine and a receipt is printed for the member’s records. All POS transactions are logged by a central server and reconciliation takes place at the close of each and every business day.

This system is more high-tech than that of many commercial banks around the world, and yet, it is brilliantly simple and perfectly suited to the needs of Jamii Bora and its members. There is no need to remember pin numbers or be fully literate. The POS model also allows for real-time transaction processing and overall cost-savings, both of which are pivitol to the organization achieving financial sustainability and growth.

The organization's high-tech approach to microfinance is only one part of the Jamii Bora story. As even the most “techy” of us realized in our visit, the power of technology pales in comparison to the power of dedication and compassion that we saw in Jamii Bora’s staff and members. In my next post, I hope to introduce you to some of these amazing people involved with Jamii Bora as clients and staff, sharing with you their stories of hope, determination, and triumph.