Unstructured supplementary service data (USSD) based prototype for credit unions’ loan request processes in Kenya

Abstract

The use of technology in credit unions‟ processes is inevitable for the sake of the unions performing optimally. The absence of readily available technology in processes such as loan acquisition has resulted into poor performance in service delivery for credit unions in Kenya. The phone based technology, Unstructured Supplementary Service Data (USSD), offers substantial communication capability that can be harnessed to perform some of the services the credit unions offer. In this thesis, the development of a USSD based prototype for the loan acquisition process of credit unions has been done as there lacks such a prototype. For credit unions to operate optimally, they have to implement current technology in their operations. Given the popularity of mobile phones in Kenya, it would be in order to base the technology of choice on mobile phones. One such technology is USSD, which can be used in such processes as loan application. The USSD based prototype has been designed such that it involves three key players; the loan applicant, the loan guarantor and the Sacco trustee. The loan applicant has to name potential guarantors and the guarantors then have to accent to guarantee the loan before the approval of the loan is done by the Sacco‟s trustee board members. Each of these players performs their respective tasks on their mobile phones. The prototype rides on the readily available GSM network to relay information between a user‟s mobile phone and the Sacco‟s servers, where then it is hosted. The prototype developed is able to validate users and ensure the loan application process meets all checks necessary before a loan is awarded. The use of the prototype in the application process costs much less in terms of money and time used as compared to a process that is not technologically endowed. The use of readily available technologies such as mobile phones and phone based USSD in offering credit union services like loan acquisition is thus a viable and recommendable undertaking. The adoption of these technologies in other credit union services like loan disbursement and repayment would further increase their optimization.