The partnership between mobile operator Safaricom and Kenya Commercial Bank (KCB), which has seen the two institutions launch the KCB-MPesa account service, seems to be paying off and benefiting not the two partners but their customers as well.
In its latest financial results for the period ending December 31, 2015, KCB announced that it had disbursed over Kshs 7 billion in loans to its KCB-MPesa customers directly via the account holders’ mobile phones.
“We have revolutionalised lending through KCB Mpesa. Lending has never been easier and faster than it is today because of this technology that allows customers to access funds instantly on their mobile phones and we see this as a key cog in our growth story,” said Joshua Oigara, CEO, KCB Group.
The KCB-MPesa Account is a savings account that enables customers to access instant loans up to Kshs 1 million by dialing *844#. Through the service, one can make minimum savings of Kshs 1 and a maximum of Kshs 1 million and be entitled to a personal accident insurance cover based on the savings.
The savings earn a 2 per cent annual interest and the account can be topped up via M-Pesa, KCB Mobi, Mtaani agent or KCB branch but withdrawals from the KCB-Mpesa account can only be done via MPesa.
In terms of loans, one can borrow between Kshs 100 to Kshs 500,000 with a top up option. Once the loan is processed and disbursed, the account holder can choose flexible repayment periods of 1 month, 3 months and 6 months via MPESA, KCB-MPESA account, KCB Mobi, branch or Mtaani with an option of partial payments.
The interest rates on KCB-MPesa loans are structured as follows: 30-day loan at 4 per cent per month (4 per cent); 90 day loan at 3 per cent per month (9 per cent) and 180-day loan at 2 per cent per month (12 per cent).
Overall, the KCB Group posted a 16 per cent increase in profit after tax for the 12 months ending December 2015 while net interest income rose by 9 per cent to KShs 39.2 billion. Fees and commissions increased by 11 per cent, to Kshs 14.16 billion, attributable to increased transactions volumes and new products rolled out to meet customer needs.