M-Shwari is officially joining the ranks of the many Kenyan firms trying to cushion its customers against the effects of coronavirus.
Safaricom made the announcement yesterday after a press release. The telecommunications giant is making changes to its M-Shwari lending facilities.
M-Shwari was developed by the public limited company to offer saving services to its customers. It provides saving packages, including lock savings accounts.
The program later got an overhaul to incorporate lending facilities to creditworthy customers. M-Shwari has since come a long way and has become a customers’ favorite.
M-Shwari utilizes a customer’s M-PESA track record to analyze their creditworthiness. This information is also in combination with saving trends on the platform.
M-Shwari previous terms and conditions
Safaricom initially set the terms and conditions for M-Shwari lending to comply with Central Bank’s regulatory measures.
Once a customer gets a successful approval for a loan, the money automatically debits to their account. The customer has a period of not more than 30 days or one month to settle the loan.
Failure to settle the loan in this period meant, a levy of an additional facility fee to roll over the credit to the next month.
This 30 day period, after a revision by M-Shwari, will increase to 60 days. Failure to pay up the loan within 60 days will now attract the additional fee.
The amount of the additional facility fee is charged on a per loan basis, meaning it is calculated based on many factors, including the amount of the loan in question.
The loan achieves a rollover to a 60 day repayment period, and the additional fee adds on top of the initial amount.
A temporary 30-day suspension of the customer from accessing another loan is also set in place. However, the customer’s loan limit remains unchanged despite their default.
The new COVID-19 changes allow M-Shwari customers to borrow another loan as soon as they make their payment. This condition stays valid as long as the loan is not outstanding after 60 days.
Credit Reference Bureau (CRB) listing
Failure to pay the loan after 120 days initially means M-Shwari listing the defaulter with CRB. However, the new changes have made it clear that no customer will be registered with the credit reference bureau.
The customer will only receive a cancellation of their loan limit, and their listing will halt until further notice. These new changes will remain valid until the 26th of June 2020.
Meanwhile, on 3rd April, the Safaricom’s new CEO Peter Ndegwa, officially took the reins of the multimillion-dollar telecommunication company.