NCBA Group #ticker:NIC -owned lending platform M-Shwari has disbursed a cumulative Sh430 billion in loans to 31 million customers in seven years since the launch of the mobile-based service.
Chief Executive John Gachora said the platform, launched in November 2012, has become a convenient source of short-term credit for Kenyan households and businesses.
He said 42 percent of the total loans had been invested in businesses, highlighting that M-Shwari has been an option for small-scale businesses that have struggled to get credit from other sources.
The product, built on Safaricom’s #ticker:SCOM mobile money service M-Pesa, was created by the former CBA Group, which recently concluded its reverse takeover of NIC Group to form NCBA Group.
The merged entity reported a 17.3 percent net earnings growth to Sh7.7 billion in the nine months ended September, performance analysts say was largely driven by M-Shwari and Fuliza (another micro-lending platform backed by the lender).
“The service (M-Shwari) has provided a convenient and secure solution to many, contributing to the economy by promoting inclusion planning and empowering our customers to effectively manage their cash flow,” Mr Gachora said.
M-Shwari savings platform dubbed M-Shwari Lock currently has slightly more than 450,000 customers.
The average savings on the platform is Sh8,981 for an average of seven-and-half months, proving an alternative savings solution for M-Pesa customers.
The customer deposits on M-Shwari currently stand at Sh18.7 billion.
Some of the top users of M-Shwari were rewarded with free deposits of Sh1,000 each as NCBA marked the product’s seventh anniversary.
Customers with outstanding loans between one to two months were also offered a chance to repay within seven days and get a credit of Sh700 into their M-Shwari accounts between November 28 and December 4 when the promotion ended.
M-Shwari charges charges a "facilitation fee" of 7.5 percent of the loans, which are repaid in one month, taking the annualised cost of borrowing from the platform to a rate of 90 percent.
Last month, Safaricom acting Chief Executive Michael Joseph said the telco is considering reducing its customer charges on M-Shwari and the M-Pesa overdraft facility Fuliza.
“I would like the cost of this lending to come down and Safaricom is working to that end.
“It’s a regulated activity, certainly we will push to find ways to make it cheaper,” said Mr Joseph said without giving details on the anticipated cuts.