Banks adopt mobile lending model in regional market
Friday, August 19, 2022
Kenyan multinational banking corporations are increasingly targeting the regional market with mobile short-term loans in a bid to increase fees and interest income from consumer loans.
The Tanzanian subsidiary of the I&M Group has partnered with Airtel Tanzania to launch an overdraft mobile money service that allows customers to transact without having sufficient funds in their mobile money wallets.
The facility, dubbed Kamilisha, is similar to Safaricom’s M-Pesa overdraft service launched in partnership with NCBA and KCB Bank.
Kamilisha enables Airtel Money customers to make transactions such as person-to-person (P2P) transfers, purchase of airtime, data plans and bill payments.
The facility follows a run by most local banks which provide large loans from 500 shillings and generate revenue from fees and interest amounting to billions of shillings.
NCBA Group leads the pack in digital lending with seven products in five countries.
Commercial Bank of Africa, which merged with NIC to form NCBA, partnered with Safaricom in November 2012 to launch the mobile loans and savings platform M-Shwari.
The service has grown to over 31.9 million customers and disbursed over 698.78 billion shillings as of December 2021 since its inception.
The lender has extended mobile microloan facilities in partnership with telecommunications operators in other countries.
It expanded to Tanzania with M-Pawa, launched in 2014 in partnership with Vodacom, and has 11.9 million customers. It had disbursed 13.8 billion shillings in December 2021.
In Uganda, he launched MoKash in 2016 in partnership with MTN Uganda and signed up over 10.9 million customers and paid out 39.1 billion shillings.
NCBA partnered with MTN in Rwanda to launch MoKash with 2.9 million customers.
It has also partnered with MTN in Ivory Coast and Bridge Bank to expand into the West African market, launching MoMokash with 5.8 million customers respectively.
Equity Group, Kenya’s largest bank by assets, also offers short term loans on mobile phones using Equitel lines running on Airtel Kenya’s network and the Equity mobile app, Eazzy, in Uganda , Tanzania, Rwanda, South Sudan and DRC.
KCB Group introduced M-Benki in Uganda, Tanzania, South Sudan and Rwanda and Mobi Bank in Burundi for customers to make small deposits, access fast loans, send money and pay bills on their mobile phone.