Time flies with great content! Renew in to keep enjoying all our premium content.
Prime
CBA eyes Uganda mobile users with M-Shwari replica MoKash
An M-Shwari branded bus termini in Nairobi. Commercial Bank of Africa (CBA) has launched an equivalent of its mobile banking product M-Shwari in Uganda. PHOTO | EMMA NZIOKA
Commercial Bank of Africa (CBA) has launched an equivalent of its mobile banking product M-Shwari in Uganda, seeking to replicate the success of the saving and credit service in Kenya.
CBA Uganda on Tuesday launched MoKash in collaboration with MTN Uganda, a service built on M-Shwari, which CBA Kenya operates with Safaricom.
The bank in May 2014 unveiled a similar product (M-Pawa) in Tanzania in partnership with Vodacom, meaning that the Uganda launch has now brought the service to all three countries where the private bank has a presence.
“We expect it (MoKash) to have the ability to drive Uganda into a cashless economy gradually as it also improves the livelihoods of the people,” said Mr Eric Muriuku, CBA’s general manager of new business ventures.
MTN Uganda customers who sign up to MoKash can deposit as much as they want into their savings wallets, funds which will attract an interest of between two and five per cent payable every quarter.
The maximum interest applies to deposits of over USh1.6 million or approximately KSh48,500.
MoKash clients, who have used MTN’s mobile money product users for at least six months, can also borrow between USh3,000 (KSh91) and (USh1 million (KSh30,300) for a period of 30 days at a one-off transaction charge of nine per cent payable in arrears.
Failure to pay the loan within the month will see it automatically rolled over for another 30 days at a similar charge, after which CBA Uganda will terminate the MoKash account and kick-off recovery efforts.
“After 63 days of the loan, the credit limit is reduced to 80 per cent of the current limit or the previous limit whichever is lower. When a MoKash loan is 90 days old, the customer loan limit is reduced to zero,” MTN Uganda says on its website.
MoKash’s functionalities are similar to that of M-Shwari which CBA launched in November 2012 in partnership with Kenya’s largest telecom operator Safaricom.
M-Shwari, which currently has more than 13 million customers, also disburses loans for a period of 30 days (with the rollover option) for a one-off interest rate of 7.5 per cent.
Innovative service
The maximum amount was initially capped at Sh20,000 but individuals with good repayment history can receive up to Sh50,000 disbursed into the mobile phones. The lowest amount one can borrow is Sh100.
CBA specialises in banking mainly corporate and high-end clients.
The introduction of M-Shwari, which processes an average of 70,000 loans daily, has helped it serve a wider population through partnering with mobile operators.
The service has since strengthened CBA’s position in the retail banking market.
“This innovative service (MoKash) has the power to unlock the economic opportunity that is held by cash transactions and informal savings and lending models,” said Mark Odeke, CBA Uganda’s chief executive.
More banks are increasingly adopting mobile-based banking products to attract and retain more customers while also reducing their operating costs.
