Safaricom Launched mShwari, But You Remember Airtel’s Kopa Chapaa?

So Safaricom launched its much rumoured product, mShwari (should we write it as MShwari, Mshwari or mShwari?), at an event which lasted for half a day at the Prestigious Windsor Golf and Country Club. At the event, Safaricom touted the product as “the next big thing” after m-Pesa.

mShwari is a savings and credit product targeted at the low income earners. Users would be able to save from a minimum of just Ksh 1 and qualify to borrow from a minimum of Ksh 100 depending on the credit rating of the user. The credit rating of the user will be generated automatically depending on how she/he saves and withdraws from the mShwari facility. Safaricom will charge a “facilitation fee” (not interest rate) of 7.5% of the borrowed amount. This will be adjusted depending on whether the subscriber score positively during saving and repayments.

mShwari Teaser

httpv://youtu.be/-1pXY6O4tNs

The product is not new since Airtel launched the Kopa Chapaa product early this year. Kopa Chapaa gives loans of between Ksh 1,000 and 10,000. It is a service between Faulu Kenya and Airtel Kenya. Kopa Chapaa has a repayment period of 10 days while mShwari has a repayment period of 30 days.

To qualify for credit on Kopa Chapaa, Airtel Kenya want you to have been on the Airtel Money for at-least 6 months and performed at-least two transactions. Kopa Chapaa’s interest (or facilitation fee) is higher at 8.5% of the principle amount.

• M-Shwari is a paperless
• M-Shwari’s interest on savings are better than those of banks
• Interest is calculated daily and paid out at the end of every three months
• There is no minimum balance on M-Shwari.
• There are no ledger fees.
• There are no withdrawal charges in moving money between M-Shwari account and M-PESA.

m-Shwari is also a saving product where interest earned is calculated as below

• Ksh 1 -­ 10,000 2%
• Ksh 10,001-­ 20,000 3%
• Ksh 20,001 -­ 50,000 4%
• Ksh above  50,001 -­ 5%

There are no ledger fees, limits on the number of withdrawals, minimum balance nor charges on deposits for M-Pesa to M-Shwari account. If you have not paid your loan within 30 days, your loan repayment period will be extended for another 30 days and you will be charged an additional 7.5% facilitation fee on your outstanding loan balance.

Early repayment of m-Shwari loans will increase your future loan limit qualification. Your loan limit is dependent on your previous loan repayment behaviour and usage of other Safaricom services such as Voice, DATA and M-PESA.

To support the monitoring and tracking of defaulters, Ministry of Immigrations and Registration of Persons has unveiled a Integrated Population Registration System (DIPRS) database. The database will have all details of Kenyans who are a live and the dead.

Safaricom is very cunning, with mShwari, it has just got money to finance its ambitious data infrastracture throughout the country. With more than Ksh 200 billion reported as being hidden below mattresses, stones and on roofs, Safaricom can easily get Ksh 100 billion of this and just get the Ksh 2 billion it need for the Fibre rollout from that.

It just makes me sad on who really owns Safaricom and M-Pesa. Kenyan government is just making a big mistake letting Vodafone own M-Pesa for so long. The presence of British High Comissioner, H. Turner, at the M-Shwari was such a strong statement to Kenyans on who is really going to laugh in all these massive “innovations.”