MShwari Limit: Safaricom and the NCBA Bank have raised the minimum threshold that customers can borrow on Mshwari to Sh. 2,000. Subsequently, borrowers of amounts lower than Sh. 2,000 will now have to contend with borrowing on Fuliza.
“Effective August 10, 2020, the minimum credit limit offered on M-Shwari shall be raised from Sh. 500 to Sh. 2,000,” NCBA announced in a statement.
Kenyans to start getting home loans at seven per cent interest
According to a local daily, borrowers pay a facility fee of 7.5 per cent when taking the M-Shwari loans, amounting to an annualized interest rate of 90 per cent. “On Fuliza, the fee is 1.083 per cent or 395.2 per cent annualized, underlining the high cost of using the short-term credit services regularly. This means a borrower who used to part with Sh. 56.25 for a Sh. 1,000 M-Shwari loan will now be set back Sh. 243.68 for a Fuliza debt that lasts a month,” a related report that appeared in the Business Daily said.
The move by NCBA and Safaricom to raise the minimum limit is seen as an effort that is aimed at cutting down the number of defaulters who borrow below Sh. 2,000. Additionally, the chief executive officer at NCBA, John Gachora, is quoted as saying that the limit increase will bring a clear product differentiation for borrowers seeking digital loans through Fuliza, M-Shwari or Stawi products in which the lender participates. MShwari Limit.
