M-shwari illustration. [Photo/the-star.co.ke]
Commercial Bank of Africa (CBA) and Safaricom are contemplating cutting the price of M-Shwari from the current 7.5 percent per month to a lower rate.
The move is aimed at withstanding the competition from other similar players.
“The anchor price, which was put forward when the product was launched as a transaction charge of 7.5 percent, which is a facility fee with zero interest rate. When we begin segmenting we will be looking at reducing the facility fee to a number we hope could be below 7.5 percent,” said Mr. Awuondo when CBA kicked off celebrations to mark five years of the product in Nairobi.
In the recent years, there has been an increase in a number of players who are issuing mobile loans at a much lower rate than M-Shwari and the announcement by the pioneers is seen as a reaction to wanting to remain relevant in the market.
Majority of lenders have concentrated their loan services to mobile with Equity Bank Group through Equitel, Kenya Commercial Bank through M-Banking and Co-operative Bank through M-Cop Cash app. Co-operative Bank, for instance, issues its loans at a rate less than four percent.