Joshua Oigara, the KCB Group chief executive said the product is Kenya’s clearest path to a cash-lite economy and would help the partners drive their financial inclusion agenda in East Africa.
“The fact that one can borrow as low as Sh50 for bus fare says a lot. It is those little amounts that are making a difference in people’s lives,” he said.
By April 27, the number of accounts opened stood at over 1.3 million with an average loan size of Sh3,000.
The high number of enrolment is attributable to the aggressive mobilisation strategy employed by the two corporates and the fact that a majority of Kenyans who own mobile phones find it convenient to make payments via cellphones.
The availability of affordable smartphones has also enabled more people to own phones, increasing mobile money’s penetration.
The KCB-M-Pesa account offers customers a platform to borrow money based on their credit history, save money on their mobile phones and later borrow and pay within a maximum of six months.
Loans can be as small as Sh50 up to Sh1 million and are accessible at an interest rate of at least two per cent.
KCB-M-Pesa account holders are required to dial the USSD code *844# to see how much they can borrow and follow the prompts to secure a loan. The money is instantly sent to a customer’s KCB M-Pesa account.
The loan amount is determined by the savings that the customer has made on both Safaricom and KCB platforms and usage of their products.