|John Mwara, MD faulu Kenya with Shivan Bhargava, MD Airtel Kenya at the launch of ‘Kopa Chapaa’.|
Airtel Kenya had to join forces with Faulu Kenya to make this service a reality. Faulu Kenya is a leading micro finance institution based in Kenya.
Faulu Kenya MD John Mwara said the interest rates which will range between 3-10 per cent will depend on the amount and the credit history of the client. Defaulters will be blacklisted on the National Credit Reference Bureau whose information is shared between financial institutions in the country.
The agreement will also see Airtel use 14000 agents on the Faulu network, in addition to the existing 6000 it already has. Mobile money market is currently dominated by Safaricoms's M-pesa which has about 15 million subscribers while Airtel Money has managed three million so far.
Below is Airtel Kenya’s press release on the launch.
Airtel Kenya and Faulu Kenya have today announced a partnership that will see Airtel Money customers access cash on their mobile phones via Airtel Money. The service dubbed ‘Faulu Airtel Kopa chapaa Service’ will provide short term credit and emergency advance to Airtel customers repayable in 10 to 30 days.
“Airtel is focused on delivering innovative world-class mobile solutions. This partnership will enable our customers to access cash advances quickly and conveniently. We are delighted to be able to offer our Airtel customers access to quick cash loans through their mobile phones, hopefully taking care of the short term needs that everyone goes through.” said Mr. Shivan Bhargava, Managing Director, Airtel Kenya.
Airtel customers will apply for a loan from the convenience of their mobile phones by simply dialing *305# and following the menu to access their loans. Customers must be registered with Airtel money and active users.
“Faulu being mass market targeted financial institution has been a leader in financial solutions, innovation that deliver value to the greater population. We seek to adopt the latest technologies through innovative financial products. We are therefore seeking and engaging with partners who are like minded and we are grateful that Airtel believed in us and partnered on what is the onset of next generation credit offering . This innovation when backed by an effective credit reference bureau and mature, will complete mobile banking by ensuring offering of micro deposit mobilization which Faulu already offers through Airtel money at a cost of Kenya shillings Five only (Kes 5/-)and microcredit and hence a full banking solution. We believe that this is a first in Kenya and Africa and a ray of hope to the majority of unbanked or semi banked Kenyans,” said Mr. John Mwara, Managing Director, Faulu Deposit Taking Microfinance.
Microfinance Institutions play an important role in the economic development of both rural and urban communities. It is the access to savings and credit that enables households to accumulate wealth and assets which enables them to better manage their economic and social challenges.
“This day marks a great milestone as we are witnessing a merging of two key sectors in any economy to push the mobile commerce standards higher in the market with full banking services incorporated. This partnership clearly demonstrates of our efforts towards achieving our vision of delivering relevant and innovative mobile solutions with our services as a leading player in the market.” added Airtel Kenya managing director, Mr. Shivan Bhargava.
Speaking during a launch function for the new service, Faulu Kenya Managing Director Mr. John Mwara said Faulu is well geared to exploit technology to scale up outreach to the unbanked and semi banked by the reducing cost of transactions, improving on convenience and ease of access.
Providing financial services to Kenyans living in rural areas with limited access to conventional financial services remains a challenging goal to all. The Kenyan rural environment is characterized by poor communications infrastructure, relatively low population density, low levels of literacy and relatively undiversified economies. Partnerships with players serving such segments are key to meeting Kenya’s financial goals for vision 2030.
Airtel ventured into the local mobile commerce business two years ago and provides e-commerce solutions including online payments, online banking, utility bill payments for electricity, DSTV, and water. Airtel Money currently has a vast dealer network of more than 6,000 agents which include banks, bank agents, supermarket chains and Posta outlets.