In November 2012, Safaricom and Commercial Bank of Africa announced the launch of M-Shwari; a virtual banking platform that rides on the M-PESA rails.
M-Shwari allows M-PESA users to operate savings accounts, earn interest on deposits, and borrow money using their mobile phones. Deposits into M-Shwari earn interest depending on the size of the deposit. Additionally, borrowers can request loans of up to KES 20,000 through the mobile phone.
M-Shwari is fully integrated into the M-PESA user interface on customers’ mobile phone and it uses a credit score algorithm based on your credit history as well as usage of M-PESA and other products to determine your loan eligibility and maximum loan amount.
Receiving a payment into a digital account (M-PESA) is creating a point of entry into the financial system for millions of Kenyans. M-Shwari now has over 1.2 million active users - a good example of how a shift to electronic payments can reduce the financial inclusion gap and democratize financial services in Sub-Sahara Africa.