One year ago, MTN Uganda launched MoKash, a service that allows customers to get micro-loans and save using their phones. The banking is actually done by Commercial Bank of Africa (Uganda) but through MTN’s mobile money platform. It is very fast and convenient, as it requires no forms or documents.
MTN Uganda has 9 million mobile money customers, 4.6 million of which are active according to its half-year results; of these, 2.5 million signed up for MoKash. The company says 1.2 million of enrolled users are actively using it, and collectively borrowed Shs30bn in the first year. That translates into Shs25,000 per active user.
MoKash’s loans start from Shs3,000 to a maximum of Shs1 million. They are unsecured, but before an MTN customer qualifies for the service they need to have used mobile money regularly for at least six months. To increase their loan limit, they need to save on the platform and actively use it.
The loans are given for a month, irrespective of the amount, and attract a monthly interest of 9% – or “loan facilitation fee” in the parlance of the providers. Interest on savings depends on the amount, varies between 2% and 5%, and is paid quarterly.
In its most recent financials, for the first half of this year, MTN Uganda said digital services like MoKash and mobile money contributed 25.34% – or Shs171.85bn – to revenue, which was Shs678.2bn.
The telecom is Uganda’s largest company by revenue. It has a self-reported market share of 54.7% and 11.2 million subscribers as of 31 July.
In March, Airtel Uganda, the second largest telecom, introduced Wewole, a service similar to MoKash. Wewole “provides a convenient way for Airtel Money customers and agents to access loan facilities and can be utilized by any Airtel Customer or Agent that is fully registered on the Airtel Money platform.”