©flickr / Erik Hersman

M-Shwari

The quicker and more reliably the money is paid back, the higher the credit limit for the next application.

In 2012 Safaricom Kenya introduced the now hugely popular M-Shwari Savings and Credit Account. Users are able to register via their M-Pesa connection, and it costs just a shilling (less than 0.01 euros) to activate. The principle is as simple as it is ingenious: based on the saving habits of the user, loans can be requested in various amounts.

The quicker and more reliably the money is paid back, the higher the credit limit for the next application. Those who save a lot in addition to this demonstrate responsible handling of their money. In this case as well, the limit goes up. However if one defaults on a payment, the credit limit is reduced for the next request.With the help of M-Shwari, the principle aim is to facilitate short and medium-term loans. For this reason, loans must usually be paid back within a maximum of 30 days. A fee of 7.5% is charged.The service is very popular, within the first 41 days after its introduction, a million M-Pesa customers had registered. Currently, a fifth of all Kenyans have an M-Shwari account, a third of all M-Pesa customers. Every day, the CBA (Central Bank of Africa), which runs the service together with Safaricom, pays out 50,000 loans. Since its introduction, the CBA has paid out 20 million loans at a grand total of 227 million US dollars. This was lent to 2.8 million people, each borrowing an average of 15 US-dollars.

Financial Inclusion

For more and more people, having a mobile phone means having access to financial services for the first time – without ever setting foot in a bank.

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