According to a message sent to its customers, money deposited in  Safaricom’s M-Shwari  account will now earn more at an interest  rate of 7.35 per cent. The rate is 70 per cent of the Central Bank Rate.

Interest on loans will however, stay the same at 7.5 per cent.

Before the alignment with CBR, M-Shwari paid interest ranging from two percent to five percent, based on a customer’s average daily balance.

What’s M-Shwari?

M-Shwari is billed as “the revolutionary banking product for M-PESA customers that allows you to save and borrow money through your phone while earning you interest on money saved.”

Enjoy the following features when you save with M-Shwari:

  • No minimum balance
  • No charges levied on the account
  • No charges for moving money from M-PESA to M-Shwari account and vice versa
  • And now fully in line with the recent Banking (Amendment) Act 2016.

The loan account allows you to borrow money in times of need or to complement your savings towards an investment or enterprise. A one-time fee of 7.5% is levied for each loan.

When you borrow an M-Shwari loan you start building your credit history which qualifies you for  higher loans.

4.5 million Kenyan Customers

According to Safaricom one in five Kenyan adults (4.5 million) are active M-Shwari customers.

“The uptake and usage of M-Shwari in the past two years has been remarkable. There are over 10 million M-Shwari accounts.  One-third of all active M-PESA users are also active M-Shwari customers,” says Safaricom.

According to Financial Inclusion Insights (FII), 54% of M-Shwari accounts were held by customers without any other bank account, an important development for financial inclusion in Kenya.

Non-Performing Loans

“M-Shwari represents the next frontier of digital financial services as it demonstrates that mobile money infrastructure can be leveraged to offer higher value financial products at scale,” says FII.

M-Shwari reportedly has very low default rates with less than non-performing loans of 2% over 90 days.