In 2012, Safaricom partnered with Commercial Bank of Africa and unveiled M-shwari a product that runs on M-Pesa and features in the menu. M-shwari allows customers to save money from M-Pesa to a bank account without actually going to the bank to open an account. Users are able to save money from as low as 1 shilling and credit of as low as 100 shillings.
There was talk that CBA was looking to replicate the success of M-Shwari with a similar product in Uganda. In January 2016, CBA announced it had applied for a license from the Central Bank of Uganda with the view of launching a savings and loans mobile service in collaboration with MTN.
The bank has now announced the launch of MoKash, a product that will be exclusive to registered MTN Subscribers. The solution allows users to borrow from as low as UGX 3,000 (Kshs. 90) to a maximum of UGX 1,000,000 (Kshs. 30000) at an interest rate of 9%. Subscribers can also save on the service, earning interest rates of between 2-5% on their deposits. The minimum amount one can deposit is UGX 50 (Kshs. 1).
Individuals who take loans using the service will have a loan repayment period is 30 days. Just like M-Shwari, defaulters will be blacklisted from taking up the service for a given period of time. To take the services, MTN Uganda subscribers will dial *165*# and then select MoKash. They will then select loans and choose the option to request a loan.
CBA also has a similar product in Tanzania called M-Pawa launched in collaboration with Vodacom. MTN Group on the other hand has been looking to grow its MTN Money service which has seen it sign deals with allowing MTN Money users in Uganda, Rwanda and Zambia to make cross border remittances with M-pesa customers in Kenya, Tanzania and a host of other nations. Users in these nations would be able to send money to MTN users without having to change currencies.
