Telkom plans to take on Safaricom in the field of mobile loans

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Telkom plans to take on Safaricom in the field of mobile loans


Mugo Kibati, CEO of Telkom Kenya. PICTURES | SILA KIPLAGAT | NMG

Telkom Kenya plans to launch a mobile loan service, joining the lucrative and growing market for fast digital credit that does not require collateral.

The loan product that will be offered through its T-Kash mobile payment unit has been tested and found to be feasible. The service is expected to be launched in partnership with a financial institution, giving Telkom Kenya customers instant access to microcredit via their mobile phone.

“From our interactive sessions with our customers, we noted that Kenyans appreciate mobile money solutions better when they continue to find more reasons to attach value to their mobile wallets, which they send money to. money, pay for goods and services, save, borrow or trade,” the telecom operator said in a statement.

“We continue to have these exploratory sessions which will inform and enhance the experience we provide to our customers; we can update once the new value proposition is ready for market. »

Telkom Kenya reopened its T-Kash mobile money service in 2018 after shutting it down a year earlier.

The new Telkom lending app will join competitors such as KCB Group’s KCB M-Pesa and NCBA Group’s M-Shwari, both operated in partnership with Telkom Kenya rival Safaricom.

Market leader Safaricom also operates the Fuliza overdraft facility, which launched on January 5, 2019, in partnership with Commercial Bank of Africa (now merged with NCBA) and KCB Group.

Launched in 2012 on the Safaricom M-Pesa mobile money app, M-Shwari has become a key growth engine for Safaricom and NCBA. KCB M-Pesa, on the other hand, was launched in March 2015.

Safaricom dominates the mobile lending segment where borrowers get loans in minutes via their mobile phone, making digital loans a quick solution for daily bills.

Mobile money has become a lucrative source of revenue for telecom operators and credit providers as customers use it to send money, pay for goods and services, and take out short-term credit.

The total number of registered mobile money accounts in Kenya stands at 67.94 million as of February 2022, according to official data from the Central Bank of Kenya.

Transactions performed on mobile money providers include paying for products and services, taking out loans, opening savings accounts, paying for government services, and betting, among others.

Telkom, which is being restructured, is banking on new revenue streams through new products to push it to profitability and turn around its loss-making business.

The restructuring of the company’s business came after merger talks with rival Airtel Kenya Limited broke down.

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