KCB's phone-based loans hit Sh7.8bn

Loans borrowed through KCB Group’s mobile banking service have hit Sh7.8 billion one year after its launch reflecting the rising significance of the product in creating assets for banks.

The service dubbed KCB-M-Pesa marks its first anniversary this month with 5.2 million customer accounts and disbursing an average of Sh660 million loans monthly.

KCB chief executive Joshua Oigara said in a statement that the platform has eased lending and borrowing by offering loans of between Sh50 and Sh1 million payable over a period of one to six months.

“Accessing affordable credit has never been easier and faster than it is today because of this mobile phone technology allowing customers to borrow instantly. A year after we launched this product, we firmly stand at the epicentre of transforming the financial services sector in East Africa and beyond,” said Mr Oigara.

However the proportion of loans disbursed through mobile banking remain a far cry from the total loans disbursed by the individual banks.

Mobile banking has raised the number of KCB customers tremendously as KCB Mobi boasts of 1.5 million customers beside those of KCB M-Pesa.

The mobile banking arena now occupied by KCB’s M-Pesa, M-Shwari and Equitel offers competitive edge for Kenyan lenders, giving easier and broader access to customers.

Equitel

Equitel for instance had over 1.7 million subscribers by December, actively using the mobile banking service.

“We receive about 80,000 applications for loans on a daily basis out of which only 1,000 comes through the branches. The average monthly loan is Sh7,000 while customers applying for one-year loans take up to Sh120,000,” said Equity Bank CEO James Mwangi on the sidelines of an event to announce the bank’s performance early this month.

Commercial Bank of Africa (CBA) which partnered with Safaricom to pioneer the first mobile banking platform M-Shwari had disbursed loans worth Sh24 billion by early last year. The platform has over 9 million customers since inception in 2013.

According to Financial Sector Deepening Report (FSD Kenya) 2016, 18 per cent of the population now use mobile banking platforms to access their bank accounts.