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CBA now biggest retail bank with 10 million customers

 Latest Central Bank data shows rapid uptake of M-Shwari, the mobile-phone based account operated by Safaricom and CBA has boosted borrowing. Photo/Diana Ngila
Latest Central Bank data shows rapid uptake of M-Shwari, the mobile-phone based account operated by Safaricom and CBA has boosted borrowing. PHOTO | DIANA NGILA 

Commercial Bank of Africa (CBA) has signed up its tenth million customer, making it Kenya’s biggest bank by customer numbers.

The milestone is boosted by Safaricom’s mobile banking savings and loans account, M-Shwari. This puts it ahead of Equity Bank’s customer count of 9.2 million as at September last year.

KCB, with a customer base of 4.1 million as at end of December, is Kenya’s third-largest lender by number of clients.

“We are delighted to announce that we signed on our 10 millionth customer this week, and this cements CBA’s credentials as the category leader in this space,” said CBA group managing director Isaac Awuondo Thursday in a statement. 

M-Shwari offers customers a platform to save money on their mobile phones and later borrow loans that are repayable within a month.

Loan disbursements jumped by over four times in the past year, underlining the vast potential of mobile banking.

CBA, which runs the M-Shwari platform in partnership with Safaricom, said loans amounting to Sh29 billion had been advanced, up from Sh7 billion in February last year.

“M-Shwari is leading the revolution towards a cash-light economy in East Africa, and today it ranks as one of the world’s most successful full-service mobile banking deployment that has managed to reach scale in just over two years,” said Mr Awuondo. M-Shwari’s deposits stand at an excess of Sh153 billion, placing it in the category of large banks.

Its loan book of Sh29 billion is equivalent to that of a medium-sized lender.

CBA, one of Kenya’s biggest privately-owned bank, is majority held by the Kenyatta family. Backed by mobile phone-based credit scoring system, CBA processes an average of 50,000 loans per day.

Analysis of its customer base indicates that 59 per cent of M-Shwari customers are male while women account for 41 per cent of the clients. The 24-35 years age group are its highest users. Women tend to save more than men on the platform, while men over of 40 years save at a higher rate than their younger counterparts.

M-Shwari loans are offered at a flat rate of 7.5 per cent repayable within a month. The maximum amount offered through the phone was initially capped at Sh5,000; but CBA has since said it has allowed customers with good repayment histories to borrow in excess of Sh8,000. The minimum amount one can borrow is Sh1,000.

To enforce repayment, the bank has been forwarding names of defaulters to credit reference bureaus. CBA also said that it was using historical behaviour of users to sift out bad borrowers and improve the quality of its loans book.

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