Capital Markets
Banks take mobile loans model to regional market
Friday August 19 2022
Customers being served at Family Bank Tower branch in Nairobi. PHOTO | SALATON NJAU | NMG
Kenyan banking multinationals are increasingly targeting the regional market with mobile short-term credit facilities loans in a bid to grow fees and interest income from consumer loans.
I&M Group’s Tanzanian subsidiary has partnered with Airtel Tanzania to launch an overdraft mobile money service that enables customers to complete transactions without sufficient funds in their mobile money wallets.
The facility dubbed Kamilisha, is similar to Safaricom’s M-Pesa overdraft service launched in partnership with NCBA and KCB Bank.
Kamilisha allows Airtel Money customers to complete transactions such as person-to-person (P2P) transfers, purchase of airtime, data bundles, and bill payments.
The facility follows a race by most local banks going big in lending small loans as low as Sh500 and minting revenues through fees and interest running into billions of shillings.
NCBA Group has been ahead of the pack in the digital lending business with seven products in five countries.
Commercial Bank of Africa, which merged with NIC to form NCBA, teamed up with Safaricom in November 2012 to launch the mobile-based loans and savings platform M-Shwari.
The service has grown to more than 31.9 million customers and disbursed over Sh698.78 billion as of December 2021 since its inception.
The lender has expanded the mobile-based microloans facilities in partnership with telcos in other countries.
It expanded to Tanzania with M-Pawa, launched in 2014 in partnership with Vodacom, and has 11.9 million customers. It had disbursed Sh13.8 billion as of December 2021.
In Uganda, it launched MoKash in 2016 in partnership with MTN Uganda and has signed up over 10.9 million customers and disbursed Sh39.1 billion.
NCBA has partnered with MTN in Rwanda to launch MoKash with 2.9 million customers.
It also partnered with MTN in Ivory Coast and Bridge Bank to grow in the West African market, launching MoMokash with 5.8 million customers respectively.
Equity Group, Kenya’s largest bank in terms of assets, is also offering short-term loans on mobile phones using Equitel lines running on Airtel Kenya’s network and Equity mobile app, Eazzy, in Uganda Tanzania, Rwanda, South Sudan, and DRC.
KCB Group introduced M-Benki in Uganda, Tanzania, South Sudan, and Rwanda and Mobi Bank in Burundi for customers to make small deposits, access quick loans, send cash and pay bills on their mobile phones.
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