Telecommunication giant MTN Uganda this week launches yet another ground-breaking product. The initiative, dubbed MoKash, which is being set up in partnership with Commercial Bank of Africa (CBA), will benefit all registered MTN Mobile Money subscribers who will be able to take small loans in a matter of minutes.
What makes it even more interesting is that it will also enable users to save and earn interest in addition getting small loans to the tune of Shs 1 million without having to sign any papers or give any collateral.
The Independent has learnt that with MoKash, there will be no bank fees or processing fees that people normally pay to a bank and no limits on the frequency of withdrawals.
“There are also no charges on deposits for Mobile Money accounts that subscribe to MoKash,” a source close to the new product, said. The MoKash product will be revolutionary when it comes to financial inclusion as it offers convenience to many unbanked Ugandans who usually have to walk long distances to transact with banks. MoKash will require no minimum balance and there will be no charges for moving money from MTN Mobile money to MoKash account and vice-versa.
The source said MTN Uganda is partnering with CBA due to the bank’s long standing experience that has facilitated the successful rollout of the same product in Tanzania and Kenya. To date, CBA has been first to market with full digital banking channels, first with Safaricom’s M-Pesa and M-shwari products, the first US dollar credit card in Kenya, the first 105% mortgage offering and the first foreign currency based mortgage provider.
In Uganda, CBA and MTN Uganda will be the first partnership to roll-out a micro-loans and savings product targeting mainly the unbanked in order to bridge the gap of financial inclusion. With this product CBA will leverage on MTN Uganda’s mobile money customer base of over six million subscribers.
The loans from MoKash will allow consumers to deposit as low as Shs 50 in savings and borrow up to Shs 1 million, which is payable with a one-off interest rate that is still being discussed with stakeholders. All one needs to do to qualify for a MoKash loan is to build a profile of credit worthiness by depositing on their savings in their MoKash account and be a regular user.
Apart from saving Ugandans from ‘loan sharks’ who charge exorbitant loans, MoKash is expected to go a long way in sustaining many poor Ugandan families by providing a seamless avenue to save, earn interest, and borrow without loss of dignity.