Transactions on mobile banking service, M-Shwari, crossed the Sh3 billion mark last week as savings continued to outpace loans.
In a phone interview with the Daily Nation on Friday last week, Safaricom chief executive officer Bob Collymore revealed that Sh2.8 billion had been deposited into M-Shwari accounts as at February 7 while the total value of loans was about Sh378 million.
“Trends show that it has become more of a savings service than a lending service. This is what we intended since the beginning,” he noted.
Nevertheless, the value of individual transactions remained small with average deposit clocking in at about Sh1,100 while the average amounts borrowed was about Sh1,000 per customer.
In total, about 1.6 million customers have used M-Shwari during the period.
M-Shwari is a virtual banking platform that allows Safaricom subscribers to operate savings accounts, earn interest on deposits, and borrow money using their mobile phones.
The service was launched in November last year by the Commercial Bank of Africa (CBA) in partnership with mobile phone services company, Safaricom.
M-Shwari, which on its first day recorded 70,000 new accounts, was the second such tool to be launched in the Kenyan market after Airtel’s Kopa Chapaa
Both Airtel and Safaricom had ventured into a zone that had thus far remained the domain of commercial banks, increasing number of deposit taking micro-finance institutions besides Savings and Credit Cooperatives (Saccos).
Its coming into the market was expected to send jitters through the local financial services industry where banks had already started launching mobile banking products in an effort to steer clear of cutthroat competition.
Further, M-Shwari was expected to raise the profile of CBA in the local banking sector. In an interview with Daily Nation last month, CBA chief executive officer, Mr Jeremy Ngunze revealed that the bank’s balance sheet and customer base had already expanded due to the impact of M-Shwari. The lender projects that the virtual banking platform will have a significant impact on its turnover.
However, M-Shwari has not been without setbacks. Safaricom is currently embroiled in a court battle in which it is accused of having taken the M-Shwari idea from microfinance institution, Faulu Kenya, without permission.