impact investing in Kenya and East Africa

Narrowing the financing gap: Safaricom launches mShwari


It has been a week since Safaricom launched a new service mShwari. This is not a new service in Kenya. Jipange kusave had a similar approach whereby users were encouraged to save and could also borrow via mPesa. Pesapata has been providing emergency loans by using the many small shops where people buy products they need daily as the main distribution channel. In this case, a borrower obtains a scratch card from their local shopkeeper, the customer uses the code on the card to load money on mPesa, and it allows the user to access the loan. mPepea is also another startup offering emergency loans via mPesa. While all these small startups have to worry about the distribution channel, Safaricom obviously has an advantage since the mShwari platform is easily accessible under the Safaricom menu options on the phone. Airtel’s Kopa Chapaa, a partnership between Airtel and Faulu Kenya has also been around for a while. Airtel still has a very small market share, so their emergency loan service has a long way to go before it reaches the volume that Safaricom currently enjoys.


Image source: Safaricom

mShwari is a partnership between Safaricom and Commercial Bank of Africa (CBA). CBA owns the mobile banking platform, mShwari and as a bank, it is able to accept deposits and give loans. Safaricom was the best partner for CBA, especially because Safaricom has over 15 million mPesa users. Some of the metrics that Safaricom uses to determine the credit worthiness of the borrower include voice usage and the user’s repayment rate for outstanding loans. The new service will continue to address the financing gap that is often felt by the rural poor. mShwari distinguishes itself from other existing services in that the subscriber does not need to go to a bank and open an account; rather, they are able to access the service on the phone. I cannot use the service yet since I have been a subscriber for less than 6 months, but I have talked to some people who have been able to use it, and they have all said it has been mostly easy to use.




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7 thoughts on “Narrowing the financing gap: Safaricom launches mShwari

  1. Team JD on said:

    Am as skeptical as they come about anything to do with safaricom. Kwanza this M- shwari business is the one that am most skeptical about. How come everything is just without charge? Hakuna cha bure, there will come a time hii mshwari itakula tu watu. May be safcom should come up with anotherM inspired thing that really describes them like M- alenge hehehe.

    • I agree JD, especially after the recent m-Pesa failures. I think Safaricom definitely needs to remember that as much as majority of Kenyans use m-Pesa, we are getting really tired of the fact that customer service is a foreign term to Safaricom. This last time i waited 5 HOURS for m-Pesa to work!!
      The reason why Safaricom cannot charge for the service is because they are not a bank, but I am surprised that the rate for the loan is so low (7.5%). The minute you miss out on the first payment, the rates become really high, so that is likely to deter people from borrowing as much/ and encourage them to pay on time.

  2. Njema123 on said:

    The rates are not low! 7.5% per month means 90% per year flat rate, or about 136% on a declining balance. That’s way WAY higher than anything else in the market! And it’s how they can afford to offer the service. An M-Pesa microloan from a place like Musoni is a much better product for consumers…

  3. imttawen on said:

    thanks for the article your writing skills are awesome i am jealous hhh
    E Wealth Blueprint

  4. Wangila David on said:

    M-shwari agood service to bussiness people so it will uplift our economy since interest is very low

  5. Wangila David on said:

    M-shwari ;however is accessed to ,is going to be employed himself to small bussines which generate money@vegetable seller,shoe polisher,podapoda (fuel,spair,uniform,)rent,small retailer shop,harwkers have advantage. Etc.

  6. Wangila David on said:

    Real is good to those who like advances from financial institution now interest is very very low.

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