M-Shwari Takes Banking To a Whole New Level

Mshwari is a revolutionary mobile phone product. It was initiated by Kenya’s mobile service provider Safaricom partnering with the central bank of Africa. Safaricom is known for its innovativeness in mobile banking. It was the first company to provide such service in Kenya and the whole of the world.
The CBA provides the banking platform. It accepts deposits and offers loans. Mshwari is a savings and a loan product. The service is accessible to about 15 million customers who are subscribers of Safaricom. This service offers access to banking services to a registered Mpesa user. The revolutionary mobile banking platform (Mshwari) by Safaricom favors people running the informal businesses.

How to use Mshwari

The process of setting up Mshwari service on your phone is as simple as tapping on a few keys on your ipad, Blackberry, Nokia Asha, Tecno or Safaricom Kababmbe; In fact, that is the whole advantage with Mshwari. Unlike other more popular Apps, to access Mshwari, it doesn’t matter which phone you are using.

• Step one: update the Mpesa menu 

Go to the Mpesa menu on the phone and select the ‘update menu’. This prompts you to enter your Mpesa password after which the menu is made available.

• Step two: how to activate Mshwari 

• Select Mshwari on the Mpesa menu
• You will find two options under it; Activate and terms and conditions
• Select activate
• You will be required to fill your Mpesa password after which you will receive a short message confirming your activation.

• Step three: how to update the Mshwari menu 

• Repeat step one again to get the complete Mshwari menu.

Merits of using Mshwari

_1. Zero transaction fee_Mshwari has no maintenance or transfer fees. This gives it an edge over other loan providers.
_2. Good reputation of CBA_CBA is a renowned bank. It is trusted in the region for its strong capital base. Customers therefore feel safe as their money is well secured.
3. Ease of access to loansIt is very easy to get a loan from this service. The only requirement is savings making this service very convenient.
4. Interest. You earn interest at the rate of 5% per year o your savings.
 _5. No need of collateral_Unlike other financial institutions, Mshwari does not need security for you to get a loan. Qualifying for a loan solely depends on the savings you have and your transaction history.
_7. No documentation needed_Mshwari does not require you to fill any forms. It is an efficient way of getting a loan in times of emergency.
8. With Mshwari you can save as little as 1 shilling and borrow as little as 100 bob. Access of money is made cheap through this service.
_9. Favorable repayment period_Mshwari offers good repayment terms. Loans are repayable within three months which is manageable to borrowers.

Cons of using Mshwari 

_1. High interest rate_The interest rate is exorbitantly high. The service charges 7.5% interest per month. That translates to 90% interest per annum. Going by the current market rate, the rate is excessively high. The most expensive banks charge an interest rate of about 30% per annum. This rate should be reviewed to make the service more affordable.
_2. The service solely relies on the SIM card_This becomes a challenge when you lose your phone and you are in dire need of cash. If you have to withdraw money using the service, you must first replace your SIM card to access your Mpesa account. The service could be more appealing if use of ATMs is made available.
3. No top up loan With Mshwari, you can only get another loan after you have repaid the first one. This means that you can only take one Mshwari loan at a time.
_4. Not suitable for people with big financial needs._Mshwari locks out those who require large amounts of loans for big projects. The maximum loan offered through this service is kshs 20,000. This service is therefore limited to people with low financial needs.
5. Age -Mshwari is only available to people aged above18 years. It locks out a great number of youths who have entrepreneurial spirit below that age bracket.

Safaricom is always taking advantage of growing technology. It is sustainably fighting poverty through innovation. It is transforming the communication industry to a great extent and its future looks promising. It is providing alternatives to many who cannot afford the bank services. It remains the best option.