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NCBA mobile loans surge to Sh729 billion


NCBA chief executive John Gachora. FILE PHOTO | LUCY WANJIRU | NMG

NCBA Group lent Sh729 billion in digital loans last year, underlining the strong demand for mobile-based credit facilities.

The bank’s disclosures for the 2022 financial year show that this was an additional Sh145 billion from the Sh584 billion disbursed in digital loans the previous year in the six countries where the bank operates.

The billions issued through the M-Shwari and Fuliza platforms underline the bank's dominance in the local digital market— amid a surge in popularity for the loans.

NCBA’s digital loan book has been on steady growth from Sh434 billion in 2020. The lender had more than 60 million digital customers in 2021.

Fuliza, the biggest credit service for NCBA, charges a fee of one percent of the amount disbursed and an additional charge of up to Sh36 per day the loan remains unpaid depending on the amount.

Read: NCBA plans new M-Shwari company from banking unit

The bank did not disclose the income from the digital loans but they are estimated to run into billions of shillings, supplementing revenue from ordinary credit facilities.

The jump in digital credit was part of an overall increase in lending that raised NCBA's total loan book from Sh244 billion to Sh278.9 billion. Net interest income rose from Sh27.04 billion to Sh30.68 billion, helped by increased customer borrowings.

NCBA has been growing digital loans in other markets, partnering with telcos as it did with Safaricom.

The lender has partnered with MTN to offer similar mobile-based credit facilities in multiple markets, which are expected to grow significantly over the years including MoKash Uganda, MoKash Rwanda and MoMokash Ivory Coast.

The bank is also eyeing to introduce the M-Shwari platform in Ghana, Ethiopia and the Democratic Republic of the Congo.

NCBA teamed up with Safaricom to form M-Shwari in 2012, becoming a pioneer bank in digital lending.

Seven years later, the lender partnered with Safaricom and KCB to launch Fuliza.

Fuliza and M-Shwari, offered via M-Pesa service are two of the leading digital credit platforms amid a spike in demand for short-term loans from consumers seeking quick unsecured overdrafts to buy goods and foot daily bills.

Six markets

The bank last year disclosed plans to spin out its financial technology business which includes M-Shwari into a standalone company in a bid to offer more personalised and feature-rich digital banking amid the surge in mobile loans.

Read: Safaricom, NCBA, KCB mint billions as Fuliza loan sizes fall

NCBA Group chief executive John Gachora in October last year said the bank was working on a separate fintech company to host its digital loan platforms in the six markets where it operates.

The subsidiary will be led by a CEO and will also have a separate board.

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