KCB Group and Safaricom’s has so far issued Sh7billion worth of loans through their mobile banking product (KCB MPESA).
The KCB Mpesa loans were issued to about five million customers within the last 10 months since its launch back in March 2015. This indicates the demand for credit in the country.
“The trend we have seen is that most customers borrow in the morning and return the money in the evening same day despite the loans being offered with a repayment period ranging from one month to six months,” KCB Group Chief Executive Joshua Oigara said.
Speaking during the third regional credit information sharing conference on Tuesday held in Nairobi Oigara said, 98 percent of the loans are repaid, with 50 percent of the borrowers coming back to borrow more. The majority of the lenders borrow around Sh3,000. He added.
The loans interest rate is at 2 percent per month with credit facilities ranging from Sh50 to Sh1 million instantly on their mobile phones.
The customer’s loan limit is determined by a number of factors including but not limited to, the amount of savings that the customer has, the customer’s usage of M-PESA, and their savings on other KCB platforms.
The customer can also save, place standing orders or make fixed deposits on their phones.
This service is especially useful to young customers who make up the bulk of the service’s customers.
For example, 21 percent of the younger customers are aged between 18 to 25 years while 24 percent are between 26 and 30 years.
According to the 2016 FinAccess household survey released last week, about 75.5 percent of Kenyans have recognized accounts up from 26.7 percent in the year 2006.
The report states that 32 percent of Kenyans favor digital banking services as their most essential financial tool.