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Optimising Micro-Finance Operations with Sikoba

Many MFIs are burdened by high administrative and operational costs. Record-keeping is often at least partly paper-based, which is inefficient and also risky: there have been instances of MFIs losing most of their loan records because of flooding. The distribution and collection of money, often made in person by an MFI agent, adds significantly to operational overhead. As a result, interest rates offered to lenders tend to be very high, which directly impacts the profitability and indeed viability of the businesses that are financed by these micro-loans.

Sikoba is a blockchain-based IOU system to register, track and clear debt. It can help MFIs reduce money-handling costs and admin overhead, thus resulting in higher profitability and lower interest rates for lenders.

Below are listed several ways in which Sikoba can benefit a Micro-Finance Institution:

  • Less money transfers and cash handling: by onboarding local stores, cash loans can also be partially replaced by credits on the SikobaPay app, further reducing operational costs. Loan recipients will be incentivised to use such credits as much as possible, as this will avoid cash handling and mobile money transfer fees. Participating stores can also be used to handle reimbursements.
  • Option to grant credit lines instead of outright loans: micro-credits are normally given out as loans for a fixed amount, with a fixed repayment schedule. With Sikoba, it will also be possible to grant credit lines that recipients can draw on as needed. One could also give lenders the choice between multiple repayment options. This will give borrowers the ability to manage both the amounts borrowed as well as the repayment schedule according to the specific needs of their business.
  • No software to install/manage: all interfaces, including administrative interfaces, are available via the Sikoba web app. There is no software to install or maintain, and no data backups to manage.
  • Built-in IOU features: recipients of micro-loans will have access to Sikoba’s IOU features, which may allow them to increase their local business even when they have little money.

We have already signed our first MOU for optimising operations of a Microfinance Institute in Kisii County, Kenya. You can read more about this partnership in Sikoba’s August Update.

If you would like to understand how Sikoba can benefit your Micro-Finance Organisation sent us an email at



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Sikoba Network

Sikoba — #Defi for the real world. Our goal is to #reduceMoneyDependency for communities worldwide!