At the beginning of the last quarter of 2015, I wrote an article examining the question if Mobile Money could be the answer to financial inclusion in the developing world. I argued that Mobile Money could possibly become the tool that will deliver financial inclusion to Sub-Saharan Africa’s two and a half billion lower and middle-income households who remain unbanked.
MTN – Africa and the Middle East’s leading emerging mobile markets operator who then emphasized that “the continued roll-out of MTN Mobile Money and broader financial services [would] remain[s] a priority” is now expected to launch a savings and loans feature to its Mobile Money fabric.
Just like Safaricom in Kenya, MTN has partnered with Commercial Bank of Africa (CBA) to usher in the new service that will offer MTN Mobile Money users the option to save and access loans using mobile handsets.
The new Mobile Money service – currently being tested with a selected base of customers – will allow subscribers to activate a savings and loans account free of charge. An active Savings account is a pre-requisite for one to qualify for a loan, with loans of up to 1 million Ugandan Shillings initially available. The credit score – called Loan Limit – is computed based on assessments of the user’s repayment behavior, savings amount, their use of Mobile Money as well as other MTN services. Interest rates vary between 2% and 5% depending on the amount saved and “interest on savings is accrued and paid quarterly after an account is activated”, as information available on MTN’s website indicates.
For more on this story visit the following link: How MTN’s Mobile Money Savings and Loans Could Aid Uganda’s Middle-Income Ambitions
Source: PC TECH