NCBA, Safaricom clash over M-Shwari loans monthly interest

NCBA bank Nairobi. FILE

NCBA Group owning M-Shwari disagrees with its associate Safaricom over the pressure to reduce the client charges on M-Shwari loans.


The move comes after treasury was in a move to control unregulated digital mobile lenders who charge excessive monthly interest rates.


The bank stated that there were no quick plans to cut the fees connected to M-Shwari, replying that it’s directed on making the digital loan competitive relation to similar products in the market place.


The NCBA statements contradict an initial statement made by Safaricom that it was enthusiastic to cut the cost of M-Shwari cut as part of a wider plan of adding more features on the M-Pesa platform, including insurance and wealth management.


NCBA runs the M-Shwari app in partnership with M-Pesa and offers a maximum of Sh50,000 loan for up to 30 days with a "facilitation fee" of 7.5 per cent on credit regardless of its duration.


"We have never said that we are reducing the rate of M-Shwari," NCBA group managing director John Gachora said.


"I think there have been comments about the rate that were made by our partner (Safaricom), not by NCBA. I do not think there have been any such plans."


Safaricom’s push for lower M-Shwari and M-Pesa overdraft facility, Fuliza, charges matched with the increase of uncontrolled microlenders in rejoinder to the growth in need for quick loans, which have left borrowers with high-interest rates.


"We would like the cost of this lending to come down and Safaricom is working to that end. It’s a regulated activity, certainly, we will push to find ways to make it cheaper," Safaricom had stated.