Co-op gives customers Sh. 105bn salary advances through its mobile app

Coop Bank Salary Advance: The Co-operative Bank of Kenya advanced over Sh. 105 billion salary advances to customers in the 2020 financial year. The bank advanced these loans through its flagship mobile banking app known as MCo-op Cash

During the year, M-Co-op Cash issued Sh. 105.1 billion as salary advances up from Sh. 52.28 billion in the preceding similar period that was issued in the 2019 financial year. This means that the bank advanced an average of Sh. 144.7 million advances daily, proof of the bank’s financial muscle and lending capabilities on both long term and short term facilities.

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The increased requests for salary advances saw the cumulative short-term loans issued via mobile phones jump by 92 per cent to Sh. 122.23 billion at the end of December. 86 per cent of the cumulative e-credit related to salary advances — called e-flexi — while the remainder was taken up by businesses.

“(E-credit) is consumer-based, that is on salary check off deductions at source and therefore low non-performing loan,” says the lender.

The increased uptake of salary advances came on the back of steep coronavirus-induced job losses and salary cuts that disrupted financial plans of salaried people.

Apart from the salary advances, the lender has been at the forefront in provision of various forms of credit to customers as a way of supporting them during the ongoing pandemic. According to the bank’s chief executive officer Gideon Muriuki, Co-op has also restructured loans worth Sh.  49 billion. “We continue to actively engage our customers to support them through this period, by re-aligning the servicing of facilities, funding and transactional needs as the situation unfolds,” he said.

The growth of the bank’s mobile banking app is not so far fetched. Co-op has emerged as one of the most digitized lenders in Kenya, with nearly 100 per cent customer transactions happening via alternative channels. “A growing leverage on digital platforms has seen the bank successfully move over 90 per cent of all customer transactions to alternative channels, with over five million customers registered,” Dr. Muriuki said.