Banks target mobile micro loans

Thursday April 5 2018

mobile phones to access financial services

Impact. The high usage of mobile phones to access financial services has had an impact on banks. PHOTO BY ERONIE KAMUKAMA  

By Dorothy Nakaweesi

Kampala. Centenary Bank has added itself to the growing number of financial service providers targeting mobile phone users.

In a media briefing yesterday, the bank announced the launch of Cente Mobile Loan, a mobile phone enabled service through which customers will be able to access loans from as low as Shs5,000 up to Shs2m.

The launch comes at a time when telecom companies are increasingly eating into the market of formal financial service providers by offering similar services such as loans and money transfer.

Mr Fabian Kasi, the Centenary Bank managing director, told journalists that the product addresses financial inclusion – to make banking accessible and simplified.
Centenary Bank has one of the highest market reach in Uganda with an asset base in the excess of Shs2.31 trillion.

Mr Kasi said the bank was looking for more avenues through which it can reach more people as well as easing access to financial services.

Uganda has slightly above four million bank accounts. However, the advent of mobile money has afforded more people an opportunity to access financial services.
Banks have over time been challenged to make access to financial services a priority in an era when telecom companies are eating into their market share.

“As a bank we will continue to ensure that customers are served in the fastest way possible,” he said.
The drift towards the use of the mobile phone for financial intermediation is undisputed and the 21 million mobile based money accounts with a nearly Shs5 trillion worth of transactions annually is testimony on how this trend cannot be ignored.

Centenary Bank has been working with Kenya-based Craft Silicon to build the CenteMobile application, which according to Mr Kamal Budhabhatti, the company’s chief executive officer, will help to ease banking services.

How it works
Instant access: According to Mr Robert Canwat, Centenary Bank manager micro loans, the service unlike other loans has no interest rate, no application fees but a one-off fee of 5 per cent on the loan one is taking. The product helps customers to access a loan immediately as long they own an account or their salary is credited through Centenary Bank.

“Getting a loan through CenteMobile is instant and helps those customers who may be stuck for instance clearing domestic bills, fuel or school fees and then pay later,” he says.