M-shwari loan is a loan facility offered by NCBA bank in conjunction with Safaricom. It is one of the pioneers in mobile phone-based loans in Kenya.
The reason M-shwari is popular with Kenyans is that you do not need to visit any bank or open a bank account to access the services. You can easily move the money between the M-shwari account and the M-pesa account at no extra fees.
Another reason for the popularity of M-shwari is that it offers savings series where one can save as little as Ksh 1 and earn interest while the lowest loan is Ksh 100.
How Do You Register For M-Shwari?
To access the services offered by M-shwari, you will need to register an account. You will need to be registered with Safaricom and have an active M-pesa account. You will use your National ID, Kenyan passport, and Alien ID (resident Permit) registered by the Government of Kenya.
Once you register your line for M-pesa, you need to activate your M=shwari account by:
- Go to the Safaricom menu
- Select “ M-PESA”
- Select “Activate or Wezesha”
- The new M-PESA menu with the M-Shwari menu will be sent to your line. Select the M-Shwari link.
A message will appear requesting you to read and accepted the Terms & Conditions ( English: Visit www.cbagroup.com/m-shwari www.Safaricom.co.ke and Swahili: Tembelea www.cbagroup.com/m-shwari www.safaricom.co.ke)
- After accepting the terms; an SMS will be sent informing you that you are now activated on the M-Shwari service.
The M-pesa pin will be used to access the M-shwari account. The minimum amount that you can keep in your account is Ksh 0 (zero) balance. Though the service is offered by NCBA bank with Safaricom, you cannot access the M-shwari account from NCBA bank branches. You cannot send money directly from M-shwari to NCBA bank or any other bank account.
How To Save And Withdraw From M-Shwari Account
To deposit to M-Shwari Account
- Go to the ‘M-PESA’ menu and select ‘M-Shwari.
- Select ‘Send to Bank.
- Enter PIN.
- Confirm the message displayed “send money to bank Kshs 2000” then press OK.
To Withdraw from M-Shwari Account
- Go to ‘M-PESA’ menu and select ‘M-Shwari
- Select ‘Withdraw from bank’
- Enter Amount
- Enter PIN
- Confirm these details then press OK
- Wait for a confirmation SMS message.
You can send and withdraw money from M-shwari as many times as possible with no extra charge and at a minimum of Ksh 1 per transaction.
How To Check M-Shwari Account Balance?
You can check your M-shwari account balances by going to M-PESA menu:-
- Select M-Shwari.
- Select show balance.
- Enter PIN.
- Wait for SMS confirmation with the message.
What Are M-Shwari Loan Charges
M-shwari charges a flat facilitation fee of 7.5% on every loan applied for. This amount is charged once at the point of application and the amount due will show the interest inclusive.
Example: If you request a loan of Ksh 1,000, you will receive the full loan amount requested if you qualify. You will however be required to pay back Kshs 1,075 within 30 days because each loan attracts a 7.5% facilitation fee.
Checking m-shwari balances is free while a mini-statement will cost Ksh 1. This statement shows the last 4 transactions. When you need the whole account statement, you need to visit Safaricom customer care and you will be charged Ksh 25 for the statement.
To qualify for a loan you will have to be an active M-PESA user for at least 6 months, save regularly on your M-Shwari account, and continuously use other Safaricom services such as Voice, DATA, and M-PESA.
When you save with M-shwari, you will earn interest of up to 5% per year. If you save between Ksh 1 to Ksh 10,000 the interest rate is at 2% p.a. Ksh 10,001 to Ksh 20,000 earns 3% p.a interest while Ksh 20,001 to Ksh 50,000 will earn you interest at the rate of 4%. Any savings above Ksh 50,000 will earn interest at the rate of 5% p.a.
How Does M-Shwari Loan Affect Savings?
When you borrow the Ksh 2,000, the money in your savings account will be frozen to the loan amount and the loan fee (loan amount Ksh 2,000 loan plus a facilitation fee of Ksh 150).
You will only be able to access any balance above the frozen amount. The frozen amount will be accessible once you pay the loan. However, you can continue to deposit money. Note: During the period the frozen savings will continue to earn interest which will be paid into your M-Shwari at the end of a calendar quarter.
You can only have 1 loan at a time. You cannot pay for someone else’s M-shwari loan. You can only send money to their M-pesa account then they pay from there.
What Happens If You Default On M-Shwari Loan?
Your loan repayment period will be extended for an additional 30 days and you will be charged an additional 7.5% facilitation fee on your outstanding loan balance.
If you pay M-shwari loan in excess, the outstanding loan balance will be paid off and the extra amount will be moved to your M-Shwari savings account.
If you pay the M-shwari loan due date, you will still be charged the 7.5% facilitation fee charged on the cost of processing the loan. Early repayment will increase your future loan limit qualification. Remember your loan limit is dependent on your previous loan repayment behavior and usage of other Safaricom services such as Voice, DATA, and M-PESA.
Final Thoughts
M-shwari is one of the best loan apps that you can access from the comfort of your home for emergency needs. However, being the pioneer, M-shwari has a rigorous way of screening clients with the help of vast data collected by Safaricom through M-pesa.
You will not qualify for an M-shwari loan if you are adversely listed by any Credit Reference Bureau CRBs in Kenya. You can view more loan apps in Kenya on the website through the link.
