Customers of mobile banking product M-Shwari have saved Sh135 billion since it was launched two years ago. M-Shwari, which is a partnership product between Safaricom and Commercial Bank of Africa, has attracted 9 million customers, making it the biggest virtual bank in Kenya.
According to Jeremy Igunze, CBA CEO, M-Shwari has been a major contributor to financial inclusion in Kenya by making it convenient for mobile money customers to save and get loans.
“We have so far disbursed loans amounting to Sh24 billion, while maintaining a repayment rate of 97 percent which is by far more impressive than the repayment rates for loans advanced by commercial banks,” said Igunze.
A 2014 survey revealed 72 percent of M-Shwari users deposited money in their virtual accounts compared to 45 percent who withdrew money. The survey also revealed customers are using M-Shwari for short term future expenditure or for emergencies.
This may have prompted Safaricom and CBA to introduce ‘Smart Loan’, a product that enables Safaricom subscribers to purchase smart phone and tablets through monthly installments. Under this M-Shwari scheme, customers will pay for 30 percent of the cost of the device, and pay for the difference in installments of up to six months.
“Kenya’s smartphone penetration has been growing phenomenally over the past five years, but there are still many customers who are not able to afford a device. We believe that by coming up with this proposition we make it possible for customers to access the wealth of knowledge available on the internet,” said Safaricom’s CEO, Bob Collymore, at the launch of Smart Loan.
Safaricom has so far sold over 6,500 devices using the service since the trial launch a month ago.