NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Monday, October 31, 2016

Six broke university students were sitting in a room at Maseno University back in 2013, discussing how best to spend their Friday night. Without money, however, their options were looking pretty limited and very dull. As they glanced down at their phones in the hopes of finding a miracle, one of the students came across a text message he had received from M-Shwari, a mobile loans product that had launched a year earlier.

He excitedly told his friends about it, and suddenly, their Friday night began to look a lot more interesting. They quickly signed up and by making a small deposit into their M-Shwari mobile wallets, they unlocked loan limits to access quick cash. In a matter of minutes, these students, who included this writer, had Sh6,000 between them.

Safaricom and Commercial Bank of Africa (CBA) launched M-Shwari as a mobile-based loans and savings platform in November 2012. According to CBA, since then, the platform has grown to more than 16 million customers. It has also expanded to Tanzania as M-Pawa, which launched in 2014 and has 4.9 million customers, and to Uganda in August this year as MoKash, which has drawn over 600,000 customers.