The partnership will enable customers borrow mobile loans for as low as Shs300 and earn interest on savings for as high 9%, respectively
Kampala, Uganda | ISAAC KHISA | Telecom operator, Airtel Uganda, has appointed KCB Uganda as a trust account holder for its mobile financial services Airtel Money in a deal that will see the lender have access to a pool of cheaper deposits.
The new partnership will see Airtel Money customers’ access instant unsecured mobile loans and regular savings and fixed deposit savings accounts that enables customers borrow mobile loans for as low as shs300 and earn interest on savings for as high 9%, respectively.
Airtel Uganda Managing Director, Manoj Murali said, the telecom firm is confident that its partnership with KCB Bank Uganda will deliver affordable, safe and secure financial services that will improve the lives of Ugandans.
He observed that there has been a year-on-year surge in the use of both feature and smart mobile phones in Uganda, leading to an increase in the number of people that rely on mobile money services whether for business or sending money to their loved ones.
“Today, the mobile phone is more than just a tool for communication. It is a source of information and a one-stop center for financial services,” he said.
Similarly, Airtel Uganda Chief Commercial Officer, Amit Kapur said Airtel Uganda prides itself in promoting financial inclusion by extending reliable, safe and secure financial services to the people regardless of their background.
“Therefore, the partnership with KCB Bank Uganda will not only enable us enhance our finance services to allow customers access customizable and convenient banking services but also cement our position as The Smartphone Network with widely accessible affordable and convenient mobile solutions for our customers,” he said.
This development comes barely two weeks since the Bank of Uganda issued financial service operator licences to Airtel Money to trade as Airtel Mobile Commerce Uganda and MTN Mobile Money as MTN Mobile Money Uganda, in fulfillment of the National Payment Systems (NPS) Act, 2020.
This eventually placed the telecom’s mobile money business under the BoU and retaining the communications services under the Uganda Communications Commission. MTN Uganda, however, already had partnership with NCBA bank through its product Mokash.
Michael Ssekyondwa, Head of Retail Banking, KCB Bank Uganda said the new partnership is aimed at providing quick access to Airtel Money float financing and encouraging everyone to save in a convenient manner.
“The first product is Instant Unsecured Mobile Loans which is revolving credit for Airtel Money agents. These will be able to borrow up to Shs 250,000 for a period of 48 hours, at a fee of only Shs 300,” he said.
“With the second product: Regular Savings Account, customers will now be able to save using Airtel Money. No account setup fees, no minimum balance is required, there are no charges on deposits and withdrawals. Savings can start from as low as Shs 500 at an interest of 5% per annum. Using this product, customers are also able to view mini statements and other functionalities. They can also access their money at any time.”
The third product is the Fixed Savings Account which will enable Airtel Money customers conveniently make deposits from Shs 250,000 upwards.
The customer can commit to 3, 6 and 12 months’ investment period and earn 8%, 8.5% and 9% respectively. No deposit and withdrawal fees are charged. The fixed deposit savings account will be made available to the public in the coming days.
“We envision the growth of businesses and individuals and the ease of access to financial solutions in this partnership,” Ssekyondwa said.
“Digital banking has and still is playing a pivotal role in the industry’s financial inclusion efforts as demonstrated by the rise in mobile money transactions and increase in the usage of digital solutions over the years,” added Edgar Byamah, Managing Director, KCB Bank Uganda.
Latest data from Bank of Uganda shows that the volume of mobile money transactions rose significantly by 24.1 percent to 3.5 billion while the value grew by 28.2 percent to Shs93.7 trillion in 2020.
The growth, according to BoU, was significant in the quarter ending December 2020 as economic activity increased following continued easing of lockdown measures and as banks and the government continued to encourage the use of non-cash payments to limit the spread of COVID-19.
More than 30.7 million customers were registered for the service at the end of December 2020 of which 19.8 million customers are active.