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8 Things You Didn’t Know About Mobile Banking Platform M-Shwari

8 Things You Didn’t Know About Mobile Banking Platform M-Shwari

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M-Shwari is a cashless credit and savings system that is offered through Safaricom’s M-pesa, a mobile money platform. Mshwari is a Kiswahili word that means, ‘calm’ or ‘all is good’. It was launched in November 2012 through a partnership between Safaricom and the Commercial Bank of Africa (CBA).

Below are eight things to know about M-Shwari;

Sources; Business Daily, CGAP, Safaricom, Next Billion

graphic.com
graphic.com

Its only accessible on a mobile phone

It is exclusively accessed through a mobile phone. The Mshwari account is not linked to any bank account. It is directly accessed through an updated M-pesa menu on the mobile phone.

Image: venturesafrica.com
Image: venturesafrica.com

Mshwari users must be Safaricom subscribers

Customers must be subscribed to Safaricom in order to access and use the service. It enables one to open and access a mobile bank account without the need of filling forms like in conventional banking.

Image: galleria.co.ke
Image: galleria.co.ke

CBA profiles loan requests and guarantees them

This is the banking institution that partnered with Safaricom to launch the service. It profiles information about any customer who applies for an Mshwari loan. It also takes risks for any loan defaulted.

Image: techmoran.com
Image: techmoran.com

Rival product have come up

In  March 2015, Safaricom and Kenya Commercial bank, one of the leading banks in the country, launched the KCB M-PESA account. This is a savings account that enables one to access loan services from the bank. Customers can choose loan repayment payments, ranging from one, two and six months. These attract different interests. Mshwari offers a 30-day loan repayment period.

Image: www.itwebafrica.com
Image: www.itwebafrica.com

Loan defaulters are blacklisted for five years

Customers are required to repay loans within 30 days on M-shwari. If they default on their payment this period is extended to 30 more days. After 3 months the defaulter is reported to Credit Reference Bureaus which bar them from accessing loans from any other banking institution in the country for five years. In 2014, CBA blacklisted more than 140,000 M-shwari customers who defaulted on their loans.

Image: thedailymail.co.ke
Image: thedailymail.co.ke

Mshwari accounts made CBA the biggest bank in Kenya

In 2015, Commercial Bank of Africa became Kenya’s biggest bank by customer numbers, with more than ten million clients — a quarter of the country’s population.  It had disbursed 29 billion shillings ($290 million) in loans by February 2015.

Image: businessdailyafrica.com
Image: businessdailyafrica.com

Mshwari is going regional

Mshwari services are only available in Kenya and Tanzania. In May 2014, it partnered with Vodacom, the leading telecommunications operator in Tanzania to launch M-Pawa. In January, CBA’s subsidiary in Uganda applied to the Bank of Uganda for a permit to launch an Mshwari equivalent in the country. This will be started in sometime in 2016. It will be a partnership with MTN.

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Mshwari offers loans to buy smartphones

In January 2015, Safaricom partnered with mobile phone manufacturers to enable its customers buy smartphones on credit. Mshwari customers can get upto 50,000 shillings ($500) on credit to buy these smartphones. A customer has to deposit 30 percent of the purchase price into the Mshwari account in order to qualify for the loan which is repayable within six months.