USSD Loan System
Mobile lending platform accessible from any phone, enabling loan applications, instant approvals, and M-Pesa disbursements without internet.
Problem
Digital lending apps only work for people with smartphones and data. That excludes a huge portion of the population—especially in rural areas where feature phones are still common.
These people need access to credit too. They have businesses, emergencies, and opportunities. They just can’t download an app.
Solution
We built a lending platform that works on any phone through USSD menus—the same technology as M-Pesa.
Loan Application
- Dial a short code to start
- Answer simple questions step by step
- Enter your ID number for verification
- Choose your loan amount and term
Instant Decisions
- Automatic credit check in the background
- Approval or rejection within seconds
- No waiting for callbacks or manual review
- Clear explanation if declined
Fast Disbursement
- Approved? Money hits your M-Pesa immediately
- SMS confirmation with loan details
- No paperwork, no branch visit
Easy Repayment
- Pay via M-Pesa paybill
- Check your balance anytime via USSD
- SMS reminders before due date
- Partial payments accepted
Process
We designed the flow for people who might be using USSD for the first time. Menus are short. Language is simple. Each step confirms before moving forward.
The credit scoring happens in the background while the user answers questions. By the time they confirm, we already know if they qualify. No awkward waiting screens.
M-Pesa integration handles both sides: sending money out (disbursement) and receiving payments back (collections). Both needed to be bulletproof—money can’t disappear.
We built in safeguards against fraud: rate limiting by phone number, ID verification, and unusual activity detection. The system protects both borrowers and the lender.
Results
Financial Inclusion
- People with only feature phones can now access credit
- No smartphone or internet required
- Works anywhere with cell signal
Speed
- Application to disbursement in under 2 minutes
- Money arrives on M-Pesa instantly
- No branch visits, no paperwork
Scale
- Handles thousands of concurrent sessions
- Processes applications around the clock
- Automatic collections reduce manual work
Repayment Rates
- Clear terms upfront reduce disputes
- Reminders keep borrowers on track
- Easy payment process encourages on-time repayment
Team: 2 engineers · Timeline: 4 months
Stack: Rails, PostgreSQL, Redis · Integrations: M-Pesa, Credit Bureau, SMS