MoKash a replicate of the successful M-Shwari service which has been operational in Kenya since 2012, has registered over 600,000 users less than two months into launching.
MoKash which joins M-Shwari and Tanzania’s M-Pawa launched in May 2014 is a product of Commercial Bank of Africa (CBA), Kenya’s biggest privately owned lender. The products which operate through mobile money platforms, provide customers full benefits of a bank without the hassle of going to one.
Mokash exclusive to MTN subscribers allows users to borrow from as low as Ush 3,000 (Kshs. 90) to a maximum of Ush 1,000,000 (Kshs. 29900) depending on their credit history at a facility fee of 9%. The loans are payable within 30days.
Subscribers can also save on the service, earning interest rates of up 5% on their deposits. Minimum deposit is Ush 50 and the maximum is Ush 10,000,000.
To access the services, MTN subscribers dial *165*#, select MoKash, loans and choose the option “request a loan”.
According to the CBA Group managing director Isaac Awuondo, MoKash is currently processing an average of 2,000 loans per day; with average the loan size being USh18,000 (Sh538).
“Customers so far say that the product is very convenient, they like the fact that they can earn interest on their savings and access instant loans when they need to borrow,” said Awuondo.
MoKash has already mobilized about Ush3.3 billion (Sh99 million) in cheap deposits, CBA disclosed.
M-Shwari which operates through M-Pesa, lauded a global success, receives over 400,000 loan applications in a day and disburse about 70,000. The platform that has over 6 million also records over 200 million in deposits daily.
The success of MoKash in just 2 months is reflective of the role that mobile networks are playing in driving financial inclusion especially in developing economies. Millions of previously unbanked users now have access to loans which they would not have had in the past.
Mobile money has been one of East Africa’s success stories, with about 58% of the population making use of the services. Just like a majority of African countries, countries it in the region lack or have poorly developed infrastructure. The platforms are convenient, reliable and cost-effective, hence such a success.
A significant number of users of M-Shwari are low-income earners, relying on the product to make economic gains. M-Shwari reported that most loan applications are received between 3am and 4am, this is the time most traders go to markets to source goods.
Access to easy and affordable loans through Mshwari has led to growth of a number of small businesses in Kenya and maybe will be the case in Uganda that has embraced the same model.
Other than providing affordable loans the platforms also encourages a saving culture which in the long run is beneficial to users as credit scores are based on savings.