risky borrowers to pay more to access loans

You will pay more to access M-Shwari loans as Safaricom and NCBA Group plan a new lending model with different charges based on the credit profile of customers.

According to NCBA chief executive John Gachora, the bank will roll out a risk rating model for M-Shwari akin to that of commercial banks.

M-Shwari, will mark a departure from the current model where it charges a flat rate of 9%, loans fees of 7.5% and excise duty of 1.5% for all customers.

NCBA will rely on an algorithm that builds a financial profile of customers based on their previous borrowing on the platform, M-Pesa transactions and airtime purchases.

NCBA has reaped huge rewards from pioneering mobile phone-based lending in Kenya after teaming up with telecoms operator Safaricom in 2012 to launch the dominant service, M-Shwari.

M-Shwari disbursed Sh42 billion in the six months to June compared to Sh44.8 billion worth of loans in the same period in 2021, representing a six percent drop.

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