In 2015, Kenya’s biggest bank by assets and profitability, KCB, partnered with Safaricom to establish a mobile banking tool that would simplify the way Kenyans saved and borrowed money. In March, the duo launched the KCB M-Pesa platform. The platform allowed customers to save up to Sh. 1 million, and earn up to six per cent in interest. Also, account holders were enabled to access up to Sh. 1 million in instant loans on the platform.
“The ubiquitous mobile phone has changed the way financial services are consumed. It has made it cheaper and more convenient for account holders to access their bank accounts,” said KCB Group CEO Joshua Oigara.
Within one year, KCB M-Pesa disbursed a total of Sh. 10.3 billion in loans to customers. This came from Sh. 25 million to Sh. 30 million in loans that the platform was advancing to its customers daily. In the same vein, within 17 months, Kenyans had saved over Sh. 286 million on the platform.
READ MORE: How you can achieve your money goals faster using KCB M-Pesa
Currently, a customer can borrow money instantly on KCB M-Pesa in tandem with their loan limit. The amount borrowed is charged an interest rate of 1.08 per cent per month with a one off negotiation fee of 2.5 per cent. The cost for the one month loan is 4.08 per cent including excise duty that is applicable on fees.
Unlike many other mobile-based lending platforms in Kenya, KCB M-Pesa allows customers the flexibility of borrowing and repaying money the same day. This means that while some platforms shrink loan limits upon successful and timely payment of borrowed money, the KCB M-Pesa platform is protective of a loan limit. Also, the limit can only be negatively affected where a borrower has a habitual record of default. To avoid being blacklisted as a defaulter, you can easily repay your loans via M-Pesa or from your KCB M-Pesa account.
Before borrowing money, you will do well to check you loan limit to avoid being frustrated.
Follow these steps to check your loan limit:
- Access the M-PESA menu
- Select Loans and Savings
- Select KCB M-PESA.
- Select Loan.
- Request Check Loan Limit.
Interestingly, there are ways you can grow your limit. according to a statement from KCB, you may increase your M-Pesa activities, increasing your savings on your KCB M-Pesa account, and increasing activity on your account by moving money in and out of your KCB M-Pesa account.
To borrow a loan from KCB M-Pesa on your mobile phone, you may follow these steps:
- Access the M-PESA menu.
- Select Loans and Savings.
- Select KCB M-PESA.
- Select Loan.
- Request Loan.
- Enter amount.
- Enter your M-PESA PIN
- Loan amount will be sent to your KCB M-PESA Account less the interest, negotiation fee and excise duty which is deducted upfront.
- To access, the loan, go to KCB M-PESA menu and select Withdraw to M-PESA.