Kenyan telecommunications operator Safaricom announced that it had entered into a partnership deal with KCB Group that would allow M-Pesa agents to deliver loans.
The total amount in the deal is valued at KES 1.5 billion (approximately $16,8 million) in unsecured loans for the mobile money facility, the companies said.
“M-Pesa agents will be able to borrow loans worth up to six times their average commissions earned over a six-month period,” Safaricom said in a statement announcing the new partnership.
Agents will now be allowed to borrow a minimum of KES 50,000 (approximately $560) and a maximum of KES 5 million (approximately $57,000).
The goal is to make the market have more liquidity and spur use of the mobile money service and develop the country’s fast-growing economy.
“The loans attract a 20 percent interest rate and are repayable over a 12 month period,” Safaricom said.
Safaricom’s CEO Bob Collymore said that “the new product is designed to ensure that agents have sufficient float to meet the growing customer transaction volumes on the M-Pesa platform.”
According to the Kenyan Communications Commission (KCC), in the first half of the 2012/2013 financial year, “Kenyans transacted an average of KES 80 billion per month through M-Pesa, equal to 31 percent of the country’s national income.”
Any M-Pesa branch in the East African country will have access to the new loan facility, the company said.