MTN Uganda’s mobile money subscribers have a new avenue to save and borrow money, the MoKash, a first in the market and one that further blurs the line between telecom and banking services.
The telecom firm recently partnered with Commercial Bank of Africa (CBA) and on Tuesday launched the financial product that will see subscribers borrow up to Shs 1 million.
“Today signifies another major milestone in the evolution of MTN mobile money services, through the addition of MoKash savings and loans to our financial services portfolio. We believe that we are aiding financial inclusion and will thereby add substantial value to the development and social well-being of Ugandans across the country,” Wim Vanhelleputte, the chief executive officer of MTN Uganda, said in a statement.
CBA chief executive officer Samuel Odeke said the launch of MoKash was another example of how the bank has promoted a similar product in other markets.
“The story of MoKash is not entirely new. It is a furtherance of the tremendous success CBA has achieved with similar products in Kenya and Tanzania. In November 2012, CBA in partnership with Safaricom launched M-Shwari,” Odeke said in a statement.
MoKash allows MTN mobile money customers to save as little as Shs 50 or more on their phones while earning interest of up to five per cent.
The service helps customers avoid the hassle of paperwork that comes when dealing with banks. The only requirement is for a customer to be an MTN subscriber and an active mobile money user.
“It’s paperless. There is no need to sign any documents to open up and transact with a MoKash account,” the MTN statement said.
Registered MTN mobile money customers only dial *165*5# to activate a MoKash account.
After activation, MTN mobile money customers have access to small loans that range between Shs3,000 to Shs1,000,000 instantly on their phones. A customer’s loan limit is linked to his or her activity on the MoKash account. So, the more and longer they save money, the higher their loan limit will be.
Launching the product at the Kampala Serena hotel, vice president Edward Ssekandi hailed MoKash as a testament to government’s effort in creating an environment for financial deepening.
“Through the Bank of Uganda, the government has already undertaken various projects to increase access to financial services and empower the users of financial services to make rational decisions in their personal finances so as to improve household incomes and meaningfully contribute to the economic growth of Uganda,” Ssekandi said.
A day later, however, MoKash was criticised in parliament, with some MPs questioning where a telecom firm got the right to behave like a bank. The state minister for planning, David Bahati clarified that Bank of Uganda had okayed MoKash.