JK launches Vodacom’s M-Pawa

Dar es Salaam. It is now official. Vodacom M-Pesa subscribers can from today save and borrow money using their mobile phones.

What’s more, the subscribers will also earn interest on their M-Pesa account savings in a new product by the company that will entrench its position as the market leader.

Through the facility called M-Pawa, Vodacom’s customers will be able to borrow from Commercial Bank of Africa (CBA) for a first in Tanzania’s vibrant telecommunication sector.

President Jakaya Kikwete launched the initiative yesterday at a colourful ceremony in Dar es Salaam. He said M-Pawa will accelerate access to financial services, particularly credit to common Tanzanians.

“We can assure you our cooperation to establishing safety and security systems to make this service more beneficial and minimize risks. I urge the National Identification Authority (NIDA) to hasten issuance of the national IDs which are also important,” said Mr Kikwete.

Tanzania’s Vodacom and CBA partnered to enable M-Pesa users to create an account with the bank through their mobile phones and conduct transactions like deposit and withdrawals. The service will attract no fee charges, according to CBA and Vodacom officials.

Customers can access credit of up to Sh500,000, depending on the credit score, in an eight seconds process. The money would be repaid in 30 days at a nine per cent one-time fee.

Kenya has a similar service called M-Shwari offered by Safaricom and CBA Kenya. Mobile financial services are said to have accelerate access to financial services in Tanzania in the recent years.

According to Finscope Survey 2013 released in April this year, Tanzania adults using financial services (financial inclusion) increased from 15.8 per cent in 2009 to 57.4 per cent in 2013 pushed by mobile money services. At the same time, the government was targeting to reach 50 per cent come 2016.

Volume of monthly transactions in the mobile money services provided by Vodacom, Tigo, Airtel and Zantel are estimated at Sh2 trillion, according to President Kikwete citing data from the Bank of Tanzania.

Vodacom M-Pesa alone facilitates transactions worth Sh1.5 trillion per month, Mr Rene Meza, Vodacom Tanzania managing director, said.

“M-Pawa is a platform for people to grow their money. You save and get interest as you gain credit rating. This service is expected to reach millions of Tanzanians who are currently outside the formal banking system,” said Mr Meza as he stressed in Kiswahili saying “haba na haba hujaza kibaba.”

CBA Tanzania Board Chairman Mr Ndewirwa Kitomari said the bank had invested $2.5 million for the service in Tanzania.

“We expect the service will be a catalyst for bringing more people to more formal banking in Tanzania. It will also promote culture of saving in a more secured platform,” he said.

About 6 million Small and Medium Entreprises (SMEs) are estimated to operate in the country but only 620 of them do use formal financial services, Mr Kikwete noted citing a research by the Ministry of Industry and Trade.