Chase Bank Kenya has partnered with Safaricom to launch a mobile phone-based loan repayable at a fixed interest rate of 23 per cent targeting small and medium enterprises, intensify the battle for mobile banking with other lenders.
The minimum loan a business can borrow is S5, 000 and a maximum of Sh500,000 per transaction, however the business are eligible to make up to five transaction per day meaning one can borrow up to Sh2.5 million in a day .
The amount borrowed is paid within a period of six months at an interest rate of 23 per cent.
Mobile banking has become a competitive edge for Kenyan lenders, giving them easier and broader access to customers.
“With Mobile2Bank businesses- small and large, will no longer need to make physical withdrawal of cash from bank accounts to make payments to third parties thereby enhancing their efficiency,” said Paul Njaga, CEO, Chase Bank.
“Using a business’s receivables, we will now be able to instantly decide and approve for a business credit for new stock, cash flow deficits or even agency float for alternative revenue,” he added.
The newly-launched product will also compete for customers with Equity Bank’s Eazzy Loan which the bank is providing through Equitel, through lenders mobile platform. KCB also offers loans of between Sh50 and Sh1 million repayable for between one and six months, through its KCB-Mpesa platform.
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Chase bank added that it is targeting manufacturing, logistics and retail business with the service.
The service dubbed, Mobile2Bank also allows businesses to make payments and collections directly to their bank accounts through a mobile phone by moving funds from one Lipa Na M-PESA till to another in real-time.
Under the agreement, M-Pesa agents will also move float (operating electronic cash) between their tills and bank accounts in real-time, and send float directly to another agent’s account- without having to visit the bank. The will also be able to access loans that will boost their operations through Mobile2Bank.
“Mobile-money has been the most impactful positive disruption to the financial services sector, and we are proud to be at the core of this development,” Safaricom’s CEO Bob Collymore said.
Kenya has been ranked among the top five African countries with the fastest growth in telecommunication, infrastructure and mobile money innovations.
The engine behind rapid growth has been mobile telephony which has caused a mobile revolution in the country.
Mobile penetration in Kenya is currently at 82.6 percent with 33.6 million subscribers, proving that the mobile phone is fast becoming an important tool in transforming lives.
SOURCE: BUSINESS DAILY