Mshwari Mobile Banking Service from Safaricom and CBA
Mpesa has been a great success story, at least if you live in Kenya; however, at some point we’ve been pessimistic on how the service could be broadened further to match current banking services from financial institutions like banks. What I mean is, why would someone even think of putting cash on a mobile phone while the same could reward his pocket with additional interest from banks. Both Safaricom and Commercial Bank of Africa have promised us this capability via a new mobile banking service dubbed Mshwari, the service is however hooked to Mpesa in various ways that non Mpesa subscribers won’t benefit from it. Users can save as little as Ksh.1 to a savings account accessible via the Mpesa menu and earn an interest at a standard rate depending on the total amount inside the account. Beyond the savings benefit, you’d now easily access a micro-credit service right on your phone without involving any collateral.
Now instead of filling those detailed bank documents and providing collateral to secure a loan, M-shwari is completely paperless and customers don’t have to wait longer as loans are given instantly via an Mpesa account. It’ll be immature to measure the success of M-shwari for at least several coming months starting from the launch date, as a handful of Mpesa users have the least knowledge of it, but it’s a good start considering we now have a reason to let our savings stay on a phone or borrow at a reasonable interest. To start using Mshwari, you’ll need to update your current Mpesa menu by selecting ‘Mpesa’ item, then ‘My account’ followed by ‘Update menu’ and lastly entering ‘Pin’, you’ll receive the updated Mpesa Menu after a while. After the Mshwari item appears alongside other Mpesa menus, you may opt in by selecting M-shwari and accepting the terms. It’s however not as easy as it looks to qualify, you must have had an active Mpesa account for at least 6months, furthermore, you need to save often on Mshwari while regularly using other Safaricom services such as data and Mpesa.
From outside, Mshwari looks like a killer deal; however, something you should note, 7.5% interest rate on loan repayment is actually monthly not yearly as most of us had anticipated. If you ask me, it’s a total rip-off compared to what banks are charging right now, I’d rather get a bank loan at 16%p.a interest rate than 7.5%p.m translating to more than 100%p.a, and it’s the plain truth. It has the convenience most of us are looking for, but it comes at a price you’d rather avoid if you ask me.
How to Request for a Loan from Mshwari
- On your Mpesa menu, navigate to ‘Mshwari’ menu and select ‘LOAN’
- Choose ‘Request Loan’ and enter the amount followed by your Mpesa Pin
- You’ll receive a confirmation message immediately followed by either successful or unsuccessful request.
How to check how much you can borrow
- Dial *234*6#, you’ll need to accept the terms after which a detailed report of how much you can borrow plus if you’re eligible will be sent on your handset.
How to save and withdraw from the M-shwari account
- On your Mpesa Menu, go to Mshwari
- Select ‘Send to bank’ to deposit and enter your Mpesa Pin
- You’ll receive confirmation message detailing the amount, date and balance
- Loan repayment interest is 7.5%p.m
- Competitive interest rates are calculated daily and paid quarterly on savings
- There are no charges on moving funds between Mpesa and M-shwari accounts