NAIROBI, Kenya, Feb 23 – Following the launch back in March 2015, KCB Group and Safaricom’s mobile banking product (KCB MPESA) has so far issued loans worth Sh7billion to about five million customers.
KCB Group Chief Executive Joshua Oigara says this indicates the demand for credit in the country.
Oigara says 98 percent of the loans are repaid, with 50 percent of the borrowers coming back to borrow more.
“The trend we have seen is that most customers borrow in the morning and return the money in the evening same day despite the loans being offered with a repayment period ranging from one month to six months,” Oigara said citing that a majority of the lending ranges at Sh3,000.
The loans are at an interest rate of 2 percent per month with credit facilities ranging from Sh50 to Sh1 million instantly on their mobile phones.
The customer’s loan limit is determined by a number of factors including but not limited to, the amount of savings that the customer has, the customer’s usage of M-PESA, and their savings on other KCB platforms.
The customer can also save, place standing orders or make fixed deposits on their phones.
This service is especially useful to young customers who make up the majority of the service’s customers.
For instance, 24 percent of them are aged between 26 to 30 years while 21 percent of them are between the ages of 18 and 25 years.
Oigara was speaking during the third regional credit information sharing conference on Tuesday held in Nairobi.
According to the 2016 FinAccess household survey released last week, about 75.5 percent of Kenyans hold formal accounts up from 26.7 percent in the year 2006.
The report states that 32 percent of Kenyans prefer digital banking services as their most important financial instrument.