Safaricom and NCBA Differ on Lowering M-Shwari Interest Rates

Amid pressure to cub predatory mobile lending platforms from the regulator, Safaricom and its partner NCBA have differed on cutting M-Shwari interest rates.

In an interview with Business Daily, NCBA Group Managing Director John Gachora says they never announced cutting M-Shwari lending rates. He reveals that currently, the bank’s primary focus is to make the product competitive to its alternatives.

“We have never said that we are reducing the rate of M-Shwari,” NCBA group managing director John Gachora told the Business Daily.

Safaricom had previously announced plans to reduce M-Shwari costs. The announcement was part of the telco’s push to add more features to the product, including insurance and wealth management.

“We would like the cost of this lending to come down and Safaricom is working to that end. It’s a regulated activity, certainly we will push to find ways to make it cheaper,” the telco said before.

In contradiction to Safaricom’s earlier statement, Mr. Gachora said, “I think there have been comments about the rate that were made by our partner (Safaricom), not by NCBA. I do not think there have been any such plans.”

Gachora further said, “there is continuous discussions to ensure that M-Shwari meet the needs of our customers without being punitive or predatory.”

NCBA runs M-Shwari in conjunction with Safaricom’s M-Pesa. M-Shwari charges customers a flat 7.5 percent “facilitation fee.” M-Pesa customers get to borrow a minimum of KES 2,000 and a maximum of KES 50,000, which has to be repaid within 30 days.

M-Shwari has, for a long time, allowed customers to borrow a minimum of KES 500, but that changed in August. The product increased the minimum loan amount to KES 2,000 advising those who don’t meet the cut to use Safaricom’s Fuliza.

M-Shwari was launched in 2012 by the Commercial Bank of Africa, rebranded to NCBA after the NIC merger, and Safaricom.

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Alvin Wanjala

Alvin Wanjala has been writing about technology for over 2 years. He writes about different topics in the consumer tech space. He loves streaming music, programming, and gaming during downtimes.

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