Home Business & Finance Banking & Loans Mobile-based M-Shwari lends Sh430 billion in seven years

Mobile-based M-Shwari lends Sh430 billion in seven years

Safaricom Chief Customer Officer Sylvia Mulinge with NCBA designate Chairman Isaac Owundo at a past media briefing in Nairobi. PHOTO | SALATON NJAU

Source: Business Daily

NCBA Group  -owned lending platform M-Shwari has disbursed a cumulative Sh430 billion in loans to 31 million customers in seven years since the launch of the mobile-based service.

Sponsored HTML tutorial

Chief Executive John Gachora said the platform, launched in November 2012, has become a convenient source of short-term credit for Kenyan households and businesses.

He said 42 percent of the total loans had been invested in businesses, highlighting that M-Shwari has been an option for small-scale businesses that have struggled to get credit from other sources.

The product, built on Safaricom’s  mobile money service M-Pesa, was created by the former CBA Group, which recently concluded its reverse takeover of NIC Group to form NCBA Group.

The merged entity reported a 17.3 percent net earnings growth to Sh7.7 billion in the nine months ended September, performance analysts say was largely driven by M-Shwari and Fuliza (another micro-lending platform backed by the lender).

“The service (M-Shwari) has provided a convenient and secure solution to many, contributing to the economy by promoting inclusion planning and empowering our customers to effectively manage their cash flow,” Mr Gachora said.

M-Shwari savings platform dubbed M-Shwari Lock currently has slightly more than 450,000 customers.

The average savings on the platform is Sh8,981 for an average of seven-and-half months, proving an alternative savings solution for M-Pesa customers.

The customer deposits on M-Shwari currently stand at Sh18.7 billion.

Some of the top users of M-Shwari were rewarded with free deposits of Sh1,000 each as NCBA marked the product’s seventh anniversary.

Customers with outstanding loans between one to two months were also offered a chance to repay within seven days and get a credit of Sh700 into their M-Shwari accounts between November 28 and December 4 when the promotion ended.

M-Shwari charges charges a “facilitation fee” of 7.5 percent of the loans, which are repaid in one month, taking the annualised cost of borrowing from the platform to a rate of 90 percent.

Last month, Safaricom acting Chief Executive Michael Joseph said the telco is considering reducing its customer charges on M-Shwari and the M-Pesa overdraft facility Fuliza.

“I would like the cost of this lending to come down and Safaricom is working to that end.

“It’s a regulated activity, certainly we will push to find ways to make it cheaper,” said Mr Joseph said without giving details on the anticipated cuts.


Please enter your comment!
Please enter your name here