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[h=1]M-Shwari deposits hit Sh24bn in two years[/h]
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Safaricom CEO Bob Collymore (left), CBA chief executive Jeremy Ngunze and Safaricom Business general manager Betty Mwangi-Thuo during a media briefing in Nairobi Thursday on the state of M-Shwari. Photo/SALATON NJAU
By GEORGE NGIGI, gngigi@ke.nationmedia.com
Posted Thursday, February 6 2014 at 18:11
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M-Shwaris customer savings have hit over Sh24 billion in just over two years since the launch of the mobile phone based bank account, making it theoretically Kenyas 18th biggest bank based on client deposits.
Commercial Bank of Africa (CBA) said Thursday that it receives Sh200 million in deposits daily from over six million users of M-Shwari, launched jointly with telecommunications company Safaricom in November 2010.
The bank has loaned out Sh7.8 billion to M-Shwari users, disbursing over 30,000 loans each day.
The savings-and-loans account has however also recorded defaults of about Sh241 million, equivalent to 3.1 per cent of total credit to borrowers.
It is not a surprise because when we started we knew some people would think they could steal from us. Now we have them marked, said Safaricom CEO Bob Collymore at a press briefing Thursday.
CBA has submitted names of over 140,000 borrowers for blacklisting by the credit reference bureaus for failing to repay their debts within three months.
READ: CBA blacklists 140,000 Safaricom loans defaulters
The loans issued through mobile phones number over 1.5 million, equivalent to total loans disbursed by Kenyas six largest banks. The customer deposit base is equivalent to that of most medium sized banks.
Many may have thought they could dodge the M-Shwari system given its ease of application. The customers need not have a prior interaction with CBA as their qualification is pegged on the usage of their M-Pesa accounts and savings.
Safaricom said the M-Pesa balances of an M-Shwari defaulter cannot be used to settle their outstanding loans as one is a bank product while the other is a telco service.
This leaves CBA with little room for recourse apart from blacklisting the defaulters.
Listing with the CRB is the last resort, we usually have to go through other channels such as reminders and moral persuasion, said CBAs chief executive Jeremy Ngunze.
All banks have incorporated checks with the bureaus as part of appraising a customer before giving them a loan. Any listed customer is required to first clear the outstanding amount before being considered for a loan.
Research firm Financial Sector Deepening Kenya (FSD) has, however, questioned whether blacklisting of M-Shwari defaulters with the reference bureau will be cost effective, given the relatively small figures involved.
An M-Shwari loan is re-payable within 30 days at an interest rate of 7.5 per cent. The bank said interest charged is a one-off settlement meaning that the defaulted amount does not continue to accrue interest.
UKIKOSA KULIPA WANAKUREPORT KWA CREDIT BUREAU HUKOPESHWA NA SHIRIKA LINGINE KENYA FOR 5 YRS IJAYO ATA BAADA YA KULIPA!!!!!!
By GEORGE NGIGI, gngigi@ke.nationmedia.com
Posted Thursday, February 6 2014 at 18:11
In Summary
- M-Shwari, a product run by Commercial Bank of Africa (CBA) and Safaricom is now Kenyas 18th largest bank by deposits.
- CBA says it receives Sh200 million in deposits daily from over six million users of M-Shwari.
- The bank has loaned out Sh7.8 billion to M-Shwari users, disbursing over 30,000 loans each day.
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M-Shwaris customer savings have hit over Sh24 billion in just over two years since the launch of the mobile phone based bank account, making it theoretically Kenyas 18th biggest bank based on client deposits.
Commercial Bank of Africa (CBA) said Thursday that it receives Sh200 million in deposits daily from over six million users of M-Shwari, launched jointly with telecommunications company Safaricom in November 2010.
The bank has loaned out Sh7.8 billion to M-Shwari users, disbursing over 30,000 loans each day.
The savings-and-loans account has however also recorded defaults of about Sh241 million, equivalent to 3.1 per cent of total credit to borrowers.
It is not a surprise because when we started we knew some people would think they could steal from us. Now we have them marked, said Safaricom CEO Bob Collymore at a press briefing Thursday.
CBA has submitted names of over 140,000 borrowers for blacklisting by the credit reference bureaus for failing to repay their debts within three months.
READ: CBA blacklists 140,000 Safaricom loans defaulters
The loans issued through mobile phones number over 1.5 million, equivalent to total loans disbursed by Kenyas six largest banks. The customer deposit base is equivalent to that of most medium sized banks.
Many may have thought they could dodge the M-Shwari system given its ease of application. The customers need not have a prior interaction with CBA as their qualification is pegged on the usage of their M-Pesa accounts and savings.
Safaricom said the M-Pesa balances of an M-Shwari defaulter cannot be used to settle their outstanding loans as one is a bank product while the other is a telco service.
This leaves CBA with little room for recourse apart from blacklisting the defaulters.
Listing with the CRB is the last resort, we usually have to go through other channels such as reminders and moral persuasion, said CBAs chief executive Jeremy Ngunze.
All banks have incorporated checks with the bureaus as part of appraising a customer before giving them a loan. Any listed customer is required to first clear the outstanding amount before being considered for a loan.
Research firm Financial Sector Deepening Kenya (FSD) has, however, questioned whether blacklisting of M-Shwari defaulters with the reference bureau will be cost effective, given the relatively small figures involved.
An M-Shwari loan is re-payable within 30 days at an interest rate of 7.5 per cent. The bank said interest charged is a one-off settlement meaning that the defaulted amount does not continue to accrue interest.
UKIKOSA KULIPA WANAKUREPORT KWA CREDIT BUREAU HUKOPESHWA NA SHIRIKA LINGINE KENYA FOR 5 YRS IJAYO ATA BAADA YA KULIPA!!!!!!
