Markets

CBA to roll out M-Shwari across E. Africa region

Commercial Bank of Africa Group managing director Isaac Awuondo. PHOTO | FILE
Commercial Bank of Africa Group managing director Isaac Awuondo. PHOTO | FILE |  NATION MEDIA GROUP

Commercial Bank of Africa (CBA) plans to roll out its M-Shwari product in regional markets by the end of the year.

Group chief executive Isaac Awuondo said the launch of the product, which allows users to save and borrow small amounts through mobile phones, is one of the bank’s key focus in the second half of the year.

“We are partnering with another telecom company to try and replicate the success of M-Shwari,” said Mr Awuondo at a briefing. He declined to name the mobile phone operator or the specific market.

The bank has so far advanced loans worth Sh10 billion through M-Shwari which works with Safaricom’s mobile money transfer service M-Pesa.

Uganda and Tanzania are the only other markets where CBA operates.

Mr Awuondo also said the bank would only go to the market to raise additional cash through a bond on a need basis due to the rising interest rates raising the cost of borrowing.

CBA started a Sh10 billion medium term programme in late 2014 where it was to raise the cash in two tranches of Sh5 billion each but an oversubscription in the first offer saw the bank take up Sh7 billion.

The balance was to be raised in the first half of this year. The Central Bank of Kenya has raised the base rate to 11.5 per cent from 8.5 per cent to help the shilling.