KCB Group Hires Huawei To Create a Ksh 1.5 Billion Loan App

Mobile loan apps are sweeping across the Kenyan financial sector like a storm. Despite warning from the Central Bank of Kenya (CBK) Governor Patrick Njoroge terming them as “evolved shylocks who use digital platforms to charge their customers exorbitant interest rates,” the wave is still on.

Kenya has more than 500 digital lenders who give to Kenyans microloans from as little as 100 shillings payable within a period of one week to six months. Most of these digital lenders have been accused of charging higher interest rates for their loans.

The digital lenders have been blamed as the main reason for more than 2.7 million Kenyans being blacklisted on the Credit Reference Bureaus (CRBs) with over 500,000 of them owing less than 200 shillings.

With many Kenyans increasingly moving away from traditional banks and rushing to take up loans from digital lenders, Kenyan banks have had no option but to join the wave. Currently, every commercial bank in Kenya has a mobile app with 90 percent of them issuing loans through them.

To stamp its authority in digital lending, KCB Group has announced that it has contracted Huawei to create a new mobile loan app at the cost of 1.5 billion shillings. This is likely going to be the most expensive app comparing to KCB Group’s peers.

The Chief Executive Officer of KCB Group, Joshua Oigara says the new mobile platform that is already being built by Huawei Technologies will replace the current KGC M-Pesa and will focus on mobile loans, savings and payments.

KCB Group has already moved most of its products and services to mobile with 80 percent of its transactions now being conducted via mobile phones. The bank is contemplating not to open any new branches in the future as it moves to concentrate all its operations on mobile.

KCB M-Pesa is one of the largest mobile lender in Kenya with customers using it to get microloans, pay for goods and services as well as saving for the future.

KCB Group is the largest bank in Kenya in terms of the asset base. The bank acquired 15 branches belonging to the defunct Imperial Bank. The lender is also in the process of acquiring 100 percent of National Bank of Kenya through a share swap.

Kenya remains a leading nation in Africa in financial inclusion with the success attributed to mobile money platforms such as M-Pesa, Airtel Money and T-Kash by Telkom Kenya.