The Co-operative Bank of Kenya has launched a mobile banking service M-Co-op that will make it possible for its clients to borrow loans based on their savings in the mobile wallet, borrowing history and number of transactions carried out via the platform.
According to the Business Daily, the mobile-based platform will offer small loans, account opening, utility payments, funds transfer, airtime top-up and cash withdrawal services through mobile phones.
The company has set its eyes on the new mobile service to grow earnings from transaction charges, as M-Co-op Cash will levy a one-off seven per cent fee for secured personal loans of between Sh100 and Sh200,000 repayable within 30 days.
M-Co-op Cash will offer a range of mobile-based credit disbursements such as business loans that will attract a similar one-off fee of seven per cent and salary advances and unsecured loans at 10 per cent, all repayable within a month.
“The mobile wallet will be a significant boost to the bank’s performance on non-funded income,” said Gideon Muriuki, Co-op Bank group managing director.
“It enables both customers and non-customers across all networks to open bank accounts, apply for loans straight from their mobile phones and also make cash and utility payments,” he added.
Co-op will offer business loans of between Sh5,000 and a ceiling of Sh50,000. For those seeking unsecured loans they can get from Sh100 up to Sh2,000.
Mr Muriuki said Co-op Bank was turning to alternative delivery channels to cut dependence on interest income and diversify earnings by generating fees.
