Barry Silah and Reuters
Kenya’s largest privately owned bank CBA Group has upgraded its Loop mobile phone banking service to allow it to offer loans of up to Sh3 million, the highest mobile loan amount in the market, it said yesterday.
Kenyan lenders have been turning to technology in response to competition from mobile phone-based services such as Safaricom’s M-Pesa. Banking and telecom executives say they are increasingly confident about mobile phone loans since they have suffered default rates of less than 10 per cent.
“In the past, banks were designed for transactions and approval processes, not for experiences. This is our fundamental change. We have redesigned the app from scratch to give a more frictionless experience to help customers manage their money in a rewarding way,” said CBA New Business Ventures division general manager Eric Muriuki.
Launched in March 2017, Loop did not offer loans before the new features were added, but CBA runs another app in partnership with M-Pesa, known as M-Shwari, which offers maximum loans of Sh20,000 for 30 days.
Loop will allow users to access the Sh3 million shillings loan, repayable over three years, as well as overdraft facilities of up to Sh100,000.
“The newly-developed transaction services, coupled with benefits such as the ability to track your expenses, set financial targets and make savings, now positions Loop as the most dynamic digital banking service in the market today and the best tool to have for all your financial service needs.”
Kenya pioneered the use of mobile money with M-Pesa in 2007, but the amount of loans disbursed by those platforms has been kept relatively low.
Barclays Kenya launched its own app last March and capped its 30-day loans on the platform at Sh150,000.