M-Shwari: New Kenyan mobile application – a banking game changer

Transactions on Kenya’s latest mobile banking innovation, M-Shwari, crossed the KSh1 billion (US$11.6 million) mark at the close of 2012 in an overwhelming uptake that could force the country’s banks back to the drawing board.

The M-Shwari application (app) was launched in November 2012, and by December 27 2012, M-Shwari users had borrowed over KSh123 million (US$1.43 million) and deposited in excess of KSh976 million (US$11.35 million) in savings. The most frequent users of M-Shwari are aged between 25 and 30.

The application and its use are clearly a game changer in Kenya and by extension Africa’s financial services sector. These sentiments were also echoed by Jeremy Ngunze, the Chief Executive Officer of Commercial Bank of Africa.

The Commercial Bank of Africa is the custodian of the funds deposited on the platform which is run by Safaricom, Kenya’s largest telecommunications firm and which also hosts the globally-recognized M-Pesa money-transfer service.

M-Shwari allows users to borrow and money using their mobile devices while also earning interest. Eligible users can also qualify for emergency loans.

The almost viral growth of M-Shwari is causing jitters in the banking industry since it offers similar products as commercial banks, but with extra convenience because users do not have to stand in line in a banking hall.

Plans are currently underway to roll out the product in neighboring Tanzania.

Source: Africa Review