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M-Pesa customers to now receive loans through phones

It will now be possible to get a loan of up to Sh1 million through your phone thanks to a deal signed between Safaricom and Kenya Commercial Bank Group on Tuesday.

The bank will extend loans of between Sh50 and Sh1 million to Safaricom customers registered on M-Pesa.

The advances will be charged an interest from two per cent per month, depending on the repayment period and a customer’s credit rating.

MIRRORS M-SHWARI

The deal mirrors a similar deal between Safaricom and Commercial Bank of Africa, M-Shwari which hit 10 million customers last week.

“This product is a crucial answer to our country’s effort to empower millions of Kenyans by availing credit conveniently through their mobile phones,” KCB group chief executive officer Joshua Oigara said.

M-shwari lends a minimum of Sh100 with the maximum dependent on each customer’s loan limit. Loans on M-shwari attract an interest of 7.5 per cent.

Safaricom chief executive Bob Collymore said the partnership is part of the company’s plans to increase the impact of M-Pesa on the lives of Kenyans.

CLICK OF A BUTTON

“Mobile technology has greatly transformed our lifestyles. It is increasingly making it more convenient for customers to pay utility bills, withdraw or deposit money in their bank accounts as well as borrow by the click of a button,” Mr Collymore said.

The new deal is an extension to a partnership launched by the two companies last year to ease access to financial services.

Last year, Kenyans paid bills worth Sh1 billion through M-Pesa to KCB, deposited Sh59 billion and withdrew a total of Sh66 billion.

“The volume of transactions has grown from 10,000 a day to 100,000.  With a dedicated product, the partnership will widen the possibilities of what customers can do using their phones,” said Mr Oigara.