Safaricom and NCBA have differed on cutting down interest rates charged on M-Shwari mobile loans. This comes after Kenya’s regular – the Central bank outlined measures intended to curb digital lenders who impose unrealistic monthly loan rates that have so far led most Kenyans into debt traps and several default especially during the pandemic era.
NCBA owns the M-Shwari loan facility available within the MPESA menu and currently charges customers a 7.5 percent interest on loans. According to the lender, there are currently no plans to reduce the rates, adding that, its main objective at the moment is making the facility as competitive as similar products on the market.
This comes as a contrast to Safaricom’s recent statement aimed at making M-Shwari loans more affordable to its subscribers. The mobile service provider intents to add more features on the MPESA platform including insurance as well as wealth management.
According to an interview between businessdaily and NCBA group managing director John Gachora, the lender never indicated plans to cutting down M-Shwari loan rates. Gachora further distances the financial institution from comments made by Safaricom affirming there haven’t been any plans in that respect.
Safaricom’s intention to lower M-Shwari and Fuliza rates came at a time when there has been a surge in unregulated digital lenders that have left most Kenyans in huge depts occasioned by high interest rates. The mobile service provider had earlier stated they wanted to bring down cost of loans on its platform and was working towards the same.