Case Study

How M-Shwari Works: The Story So Far

Evaluating the use of M-Shwari as a tool for financial inclusion in Kenya
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This case study discusses the characteristics of M-Shwari, a combination of saving and loan products offered in Kenya as collaboration between the Commercial Bank of Africa (CBA) and Safaricom. M-Shwari allows customers to save for the short term while also increasing access to credit options in the future. The product is offered through M-PESA, a mobile money service used by two-third of Kenyan adults. M-PESA has more than 80,000 agents and it processes nearly USD 20 million in daily transactions. The study states that M-Shwari has provided millions of poor, previously unbanked Kenyans with the full benefits of a banking product including interest, deposit insurance, and access to credit. It is also the first large-scale product that taps into digital information of poor and unbanked customers to make credit-scoring decisions. The study finds that M-Shwari:

  • Offers the basic banking services customers need most but, unlike conventional bank accounts, is easy to use and accessible anytime and everywhere;
  • Is perceived by customers to be cheaper than most comparable sources of loans;
  • Is considered to be very secure and the additional separation from M-PESA accounts makes it feel safer and more private than M-PESA.

About this Publication

By Cook, T. , McKay, C.