Mar 21, 2013

M-Shwari not meeting customers expectations

MicroSave conducted market research to assess customers' perceptions of and reactions to M-Shwari -virtual banking platform that allows Safaricom subscribers to operate savings accounts, earn interest on deposits, and borrow money using their mobile phones.

 From the research,the savings feature is used by high income customers to circumvent the limits on saving on M-PESA; while the small loan facility is accessed by lower income customers.

Of all the clients interviewed, only one had been approved for a loan larger than KES 2,500 (US$ 28.74), while all wanted larger amounts. According to Safaricom, the average loan size is at around KES 1,000 (US$ 11.49).

According to the research, there is also widespread confusion about the basis on which credit limits are decided by the system. As a result, a great deal of the KES 2.8 billion (US$ 32.2 million) deposited in the first three months may have been as a result of customer depositing and withdrawing to test the system and credit appraisal algorithm. 

Customers had the following valuable feedback on how Safaricom can improve M-Shwari.
  1. More transparent credit appraisal and approval process.  Real time feedback via SMS would be helpful here.
  2.  Larger loan sizes and longer terms for micro entrepreneurs as the current amounts are “peanuts”.
  3. Fixed term savings. People want to accumulate value, but are finding it too easy to withdraw their money, thwarting their own plans.
  4. An end to freezing deposits in M-Shwari when there is a loan outstanding.
  5. Easy access to an informed customer service.