Safaricom partnered with Commercial Bank of Africa (CBA) in November to come up with the service that helps mobile users to save and apply for loans through their M-Pesa mobile money accounts.
Safaricom boss Bob Collymore told the Daily Nation their loan portfolio had peaked at KSh378 million (US$4.3 million) as of February 7.
“Trends show that it has become more of a savings service than a lending service. This is what we intended since the beginning,” he said.
Mobile microfinance is becoming one of the biggest tributaries of mobile money. Just last week, Kenyan firm Mo De, having serviced more than 200 million transactions across Africa, won the IBM Smartcamp award for its innovative microfinance product on loaning airtime.
Such initiatives help to bring to the fold the number of unbanked African mostly in rural areas using universal devices such as the mobile phone.
CBA has also indicated an increase in its portfolio thanks to the number of Kenyans who have opened bank accounts through the M-Shwari product.
Airtel Kenya also conceived of a similar initiative in conjunction with microfinance company Faulu Kenya. Since the launch of M-Shwari, Faulu Kenya has gone to court to complain about the alleged infringement of its idea by Safaricom. The matter is still in the court.
According to financial experts, following these new developments, other banks will have to resort to technology to enhance their portfolios just as CBA has done if they are to remain competitive.