Safaricom in deal to fund M-Pesa agents

M-Pesa agents can now acquire unsecured bank loans for business expansion from KCB following a partnership agreement between the bank and mobile phone service provider Safaricom.

Through the facility dubbed M-Pesa Agent Mkopo na KCB, agents can get loans of up to Sh5 million and bank overdrafts to increase float availability.

The amount will be based on the level of their commissions and will be repaid at a subsidised interest rate of 1.5 per cent per month.

KCB Group chief executive Martin Oduor-Otieno said the bank was increasing its lending to small businesses following additional capital raised through the rights issue last year.

“This has immense capacity to grow and yield the right level of returns to investors. M-Pesa agents and dealers will access loans from Sh2 million to Sh5 million with Safaricom holding collateral,” he said on Thursday during the event.

The product also comes with a KCB M-Pesa account allowing the over 22,000 agents access to the bank’s branch network of 217 branches across the region.

“The business has actively been exploring innovative means to improve the efficiency of our partners in order to deliver a better experience for our customers,” said Safaricom chief executive Bob Collymore.

Plan to expand

He said a specially designed short term loan product will finance those who plan to expand their agency business or make other business improvements.

“This partnership with KCB offers us an opportunity to reach all parts of the country given their branch footprint and offer these partners the financing they need to move to the next level,” said Mr Collymore. 

Safaricom has been partnering with banks, appointing them as super-agents, in a deal that enables agents to make withdrawals and deposits.