The giant telecommunications company Safaricom in partnership with M-shwari has announced that they have raised the minimum loan limit to Ksh2,000 up from the previous Ksh500 to its customers and users.
The M Shwari mobile loan platform is owned by Safaricom and NCBA Bank and in a statement they have indicated that borrowers seeking for loans below Ksh2,000 will now have to use the Fuliza overdraft service.
M-Shwari charges a facility fee of 7.5 per cent, amounting to an annualised interest rate of 90 per cent while Fuliza charges 1.083 per cent per day or 395.2 per cent per year.
“M-Shwari serves the critical need for planned credit and the demand for lower ad hoc (impromptu) credit is now better served with Fuliza,” NCBA Group managing director John Gachora told the press.
According to Gachora, this move of increasing the loan limit will bring product differentiation for the borrowers who are seeking digital loans through Fuliza, M-Shwari or Stawi, in which the bank is a player.
“We are at the centre of these three products and so we analyse data every day and track behaviours. This is what we are trying to address.
“Customer qualification for M-Shwari, Stawi and Fuliza will depend on the individual performance on mobile money, saving and on the observed repayment behaviour on all digital loans that they use,” he added.
“Since launching M-Shwari, we have rolled out Fuliza with Safaricom. Fuliza is the one to address this ad hoc immediate credit. So we see the new proposition of M-Shwari being planned short-term credit.”
M-Shwari had by mid-December last year disbursed a cumulative Kshh430 billion in loans to 31 million customers, seven years since it was launched.
Fuliza services on the other hand had lent an estimated Ksh81 billion in the six months to June last year since its launch in January 2019.