M-Shwari, Kenya’s innovation that made life bearable for millions at the height of COVID-19 pandemic


At the height of the COVID-19 pandemic in Kenya that occurred between March and September 2020, several financial institutions and government agencies tried to implement measures meant to cushion Kenyans during the pandemic, but none of them was at Kenyans’ fingertips as the now renowned M-Shwari.

M-Shwari is an NCBA product, launched on the 27th November 2012 when the bank was still CBA. At the launch at even right now, the M-Shwari mobile financial solution was meant strictly for Safaricom’s MPESA customers; a scenario that has made many believe that M-Shwari is a Safaricom product. Yes, there is a deep partnership between Safaricom and NCBA, a partnership that allows NCBA to ride on Safaricom’s MPESA and text messaging platforms, but together with Safaricom’s provision for customer service services for M-Shwari, the product itself is one hundred per cent owned by NCBA.

Since its launch, M-Shwari has registered quite some milestones worth writing home about. These milestones include registering one million customers within 41 days after launch, reaching 13 million users within three years that allowed it to take home Kshs 1.6 billion profits before tax, and when M-Shwari turned 5, it had registered over 21 million customers.

It’s not just on customer numbers and profitability that M-Shwari has registered milestones, but on technology adoption too. For example before 2018 the time it took for M-Shwari to approve loan applications was roughly 3 minutes. In 2018 however, NCBA released new technology for processing technology that reduced the 3 minutes wait time to under 11 seconds. In 2020, the bank upgraded to a more robust platform targeted to ensuring improved service reliability and enhanced system capabilities.

Away from the milestones and achievements of M-Shwari to its role in cushioning the livelihoods of millions of Kenyans during the COVID-19 pandemic. As at the time COVID-19 hit very hard on Kenya’s economy, millions lost their sources of livelihood which included being laid off from work (mostly without pay) and shutting down their businesses. The millions that were in the hospitality industry, those that operated clubs, bars, and churches, those that ran salons, barbershops, and restaurants, and basically any business that thrived on travel and crowds, were shut down.

Without a source of income, these millions of Kenyans opted to drain their MPESA savings and after those savings had run out too, their last resort was to borrow from mobile money lenders, and the lender that was at their fingertip was M-Shwari.

Msh-Shwari was not only able to meet their increased demands for loans without raising their facility fees but was also kind enough to not penalize those who were not able to pay back the loans on time. Typically an M-Shwari loan is due in 30 days. Failure to pay back in 30 days M-Shwari usually adds a penalty to the loan that’s equivalent to the facility fees. If the loan is not paid back within 60 days, M-Shwari treats the loan as bad loans (Non-Performing Loans or NPL). During the height of the COVID-19 pandemic, however, loans were declared NPL only after they were not paid within 90 days. The extended period for loan repayment allowed the millions of Kenyans that did not have a reliable source of income to cushion their livelihoods by borrowing from M-Shwari.

M-Shwari says it has about 35 million customers. Of these customers, a significant 31 per cent have non-performing loans. That’s a huge default rate, largely because M-Shwari is a non-secured loan. Secondly, a number of those who borrow from M-Shwari aren’t people who borrow to finance their business operations, but people who borrow to spend on airtime, or food, or to take care of a family emergency majority of which belong to the medical category. Other than borrowing for emergency and business financing, the other reasons for borrowing aren’t good reasons. The first thing to avoid therefore is borrowing money for reasons other than financing a business or taking care of an emergency situation. I understand that right now we are all facing difficult times and M-Shwari is one of those partners that’s ready to take us out of an impossible situation, but there is a need of being extra careful before pressing that borrow button that M-Shwari and other lenders have made extremely easy, if not addictive. Learning not to be quick to borrow is as good as learning how to save.

Instead of using M-Shwari as a borrowing platform, why not try to use it as a saving platform? MShwari for example is one of the few saving partners that you’ve got that provides you with a direct-to-understand saving facility and pays you 6% annual interest on your savings. If you chose to lock your saving to M-Shwari, the loan product will give you interest at the rate of 70% of CBK’s base interest rate. Save long enough and you will find yourself accessing your interest to take care of those emergency situations, instead of borrowing.

Lastly, a few fun facts about M-Shwari:

  1. You can get instant help from Safaricom customer care social media platforms on matters related to it.
  2. M-Shwari is now available in 5 other African countries.


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