A customer pays bills through M-Pesa on February 11, 2015. PHOTO | DIANA NGILA
What you need to know:
Kenya Power consumers will get credit to settle power bills of between Sh100 and Sh2,000, which will be repaid at an upfront flat rate of 10 per cent of the borrowed amount.
The Okoa Stima advances will be deposited into a user’s M-Pesa account, for onward transfer to their Kenya Power accounts, less the facilitation charge.
This is the same concept that Safaricom uses in its Okoa Jahazi facility where it charges a fee of five per cent for any airtime loaded on credit.
Safaricom and Kenya Power have jointly launched a mobile phone-based soft loan facility for electricity consumers which will see customers get advance credit to settle their energy bills and repay the debt within seven days.
Electricity consumers will get credit to settle power bills of between Sh100 and Sh2,000, which will be repaid at an upfront flat rate of 10 per cent of the borrowed amount.
Defaulters will be charged a penalty of 10 per cent on the advance.
“The product will empower Kenya Power customers to access emergency power loans as well as query and view bills on their mobiles,” reads part of an internal communication sent to Kenya Power staff. The service is planned for launch in coming weeks.
This is Safaricom’s latest foray into financial services as part of the company’s diversification strategy which has helped it minimise over-reliance on revenue from voice calls.
At the moment Kenya Power subscribers can only use M-Pesa to buy electricity tokens or pay their bills.
Kenya Power customers will be entitled to maximum advances of Sh1,000 and Sh2,000.
The Okoa Stima advances will be deposited into a user’s M-Pesa account, for onward transfer to their Kenya Power accounts, less the facilitation charge.
This is the same concept that Safaricom uses in its Okoa Jahazi facility where it charges a fee of five per cent for any airtime loaded on credit.
Safaricom has also sent some of its customers an alert informing them of the new service.
Gained traction
“Dear customers, you can now get electricity tokens of up to Sh1,000 and pay within 7 days,” reads the message.
Kenya Power becomes the latest firm to leverage on this concept which has gained traction among financial institutions such as Commercial Bank of Africa (CBA) and KCB, which have also partnered with Safaricom, to advance mobile phone-based loans to their clients repayable at a fixed interest rate.
To access the service, Safaricom subscribers who want to register for Okoa Stima will be required to dial *885#, enter the PIN and follow instructions.
The partnership with Kenya Power is different from that signed with banks in that it has a uniform maximum cap for all customers.
For bank loans a customer’s credit limit is calculated based on their M-Pesa transaction history and their savings, in the event that they are account holders.
Mobile banking has become a competitive edge for Kenyan lenders, giving them easier and broader access to customers.
CBA said M-Shwari, which recently signed up its 10th million customer, processes approximately 50,000 loans every day — an uptake that has grown its savings and loans accounts to Sh153 billion and Sh29 billion respectively.
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