M-Shwari loans dip to Ksh.86 billion on CRB listing freeze

The value of loans disbursed through M-Shwari slumped to Ksh.86.1 billion in 12 months to March this year as banks shied away from lending from a freeze in credit information sharing.

In its 2022 Sustainability Report, Safaricom indicates lenders slowed down in making disbursements after a directive barring the negative listing of borrowers defaulting on loans of less than Ksh.5 million in October last year.

At the same time, the firm which runs the M-Shwari service says the platform faced stiff competition from other credit providers at the marketplace.

“This was due mainly to increased credit offerings in the market and conservative bank approach to lending due to non-listing of low value loans based on the government directive,” Safaricom stated.

M-Shwari loan disbursements had peaked at Ksh.129.6 billion in 12 months to March 2020.

The usage of the service has nevertheless held steady with the number of active customers standing at 4.67 million and with Ksh.745 billion worth of customer deposits.

M-Shwari is a savings and loan service targeted at M-Pesa customers.

Loans via the service are capped at a minimum Ksh.1,000 and a maximum Ksh.1 million attracting charges of nine per cent to include loan fees of 7.5 per cent and 1.5 per cent in excise duty.

Safaricom’s overdraft facility Fuliza has meanwhile seen inverse outcomes to M-Shwari with disbursements rising to Ksh.502.6 billion in the same period from Ksh.351 billion previously.