“He that by usury and unjust gain increaseth his substance, he shall gather it for him that will pity the poor.”
I once had someone run an errand for me at a cost of Shs 100 but couldn’t find them later that day to pay the wages. I thus thought it would be easy and convenient if I would simply pay via Mpesa; well it was, but it cost me dearly: I had to send the said person Shs 127 because I had to cover their withdrawal costs; to transfer this amount cost me Shs 27; in total I had spent Shs 54 to pay Shs 100….
A few stats about Safaricom’s profits and financial services (from Fortune no less)
1. In 2013 Safaricom (40% of which is owned by UK’s Vodafone Group) reported a record $22 billion in wireless financial transactions (equivalent to 60% of Kenya’s GDP)
2. Largely on the strength of M-Pesa’s success, Safaricom reported six-month net income of $130 million in its latest quarter. That’s the best half-year result in Kenya’s corporate history and makes Safaricom, which controls about 80% of Kenya’s wireless market, the most profitable corporation in East Africa.
3. Safaricom’s M-Pesa platform has more than 15 million active subscribers
4. Safaricom dubuted a core banking service, M-Shwari, a little over a year ago in partnership with Commercial Bank of Africa. This offering has attracted more than 2 million subscribers.
5. M-Shwari has however been criticised for making too much money from Kenya’s poorest. Loans of up to $300 have a term of 30 days and carry a 7.5% rate of interest, which on an annualized basis works out to nearly 100%. Additionally, a higher rate of interest is applied if a customer pays off his loan early or late, and while a loan is outstanding, the balance in a customer’s M-Shwari savings account is frozen up to the amount due. This creates a scenario where low-income Kenyans could in effect be borrowing from themselves.
Notably the article also states: “The Kenyan authorities have long recognized the potentially detrimental consequences of Safaricom’s quasi-monopoly status,” says Michael Fuchs, a Chevy Chase, Md.-based finance and development specialist who spent years in Africa working for the World Bank, “but have been reluctant to disturb, or possibly derail, the m-money revolution.”
Looks like Safaricom is where they will lend you money if you can prove that you don’t need it.