Airtel Uganda through its partnership with KCB Bank Uganda will enable Ugandans enjoy a variety of financial solutions through fully automated digital products including; Instant Unsecured Mobile Loans, Regular Savings and Fixed Deposit Savings Accounts as customers will now be able to borrow mobile loans for as low as shs300 and earn interest on savings for as high 9% on the Airtel Money platform.
This announcement was made on Tuesday morning this week at the Kampala Serena hotel as the partnership aims to facilitate easy access of loans while rooting for increased savings as both Airtel money and KCB bank customers will leverage on the convenience of transacting in the digital way in the drive towards a cashless economy, as Bank of Uganda claims printing of cash notes and coins has been literally costly interms of resources.
KCB Bank Uganda Managing Director, Mr Edgar Byamah during the announcement of the digital savings and loan access facility revealed that, there’s no doubt that the Covid-19 situation has boosted digital usage hence the increased velocity of financial transactions through the platform amounting to billions of shillings on a monthly basis through person to person and business to business transactions.
He added that, ‘’the loan access facility comes in as a solution to Airtel money agents that have always claimed they are out of float as this service will enable them borrow upto Shs250, 000 and repay at very low interest rates, as the same will apply to customers so as they can enjoy the convenience that comes with transacting on the Airtel money platform’’,
Edgar also revealed that, “Digital banking has and still is playing a pivotal role in the industry’s financial inclusion efforts as demonstrated by the rise in mobile money transactions and increase in the usage of digital solutions over the years.”
According to the Uganda Communication Commission (UCC), Q4 Market Report of 2020 Uganda registered commendable growth in new mobile money accounts with 2.6 million new accounts registered between January and December. In the Quarter ending December 2020, the total active mobile money accounts stood at 22.5 million up from 20.9 million in the first quarter. On the business side, the number of active mobile agents had grown to 235,790 from 227,736 in September. For the first time ever, the number of mobile money transactions crossed the 1 billion transactions mark.
Mr. Byamah further added that, “As a bank, our commitment is to enable our customers to Go Ahead by leading in innovation and technology-driven banking services delivered through alternative banking platforms, real-time banking options and cashless transactions. We strongly believe this is now the ideal approach to deepen financial inclusion as well as reach the unbanked population in Uganda and the rest of Africa.”
In his remarks at the launch, Airtel Uganda Managing Director, Manoj Murali said, “We are confident that our partnership with KCB Bank Uganda to deliver affordable, safe and secure financial services that will improve the lives of Ugandans who use our services, and subsequently ensure our mandate of driving financial inclusion in Uganda.”
He observed that there has been a year-on-year surge in the use of both feature and smart mobile phones in Uganda which has led to an increase in the number of people that rely on mobile money services whether for business or sending money to their loved ones. “Today, the mobile phone is more than just a tool for communication. It is a source of information and a one-stop center for financial services.
Commenting during the press briefing this morning, Michael Ssekyondwa, Head of Retail Banking, KCB Bank Uganda explained that the partnership is aimed at providing quick access to Airtel Money float financing and encouraging everyone to save in a convenient manner.
“The first product is Instant Unsecured Mobile Loans which is revolving credit for Airtel Money agents. These will be able to borrow up to Ugx. 250,000 for a period of 48 hrs, at a fee of only Ugx. 300,” he said.
“With the second product: Regular Savings Account, customers will now be able to save using Airtel Money. No account setup fees, no minimum balance is required, there are no charges on deposits and withdrawals. Savings can start from as low as Ugx. 500 at an interest of 5% per annum. Using this product, customers are also able to view mini statements and other functionalities. They can also access their money at any time.”
The third product is the Fixed Savings Account which will enable Airtel Money customers conveniently make deposits from Ugx. 250,000 upwards. The customer can commit to 3, 6 and 12 months’ investment period and earn 8%, 8.5% and 9% respectively. No deposit and withdrawal fees are charged. The fixed deposit savings account will be made available to the public in the coming days.
Mr. Ssekyondwa said that KCB Bank Uganda through its dedication to provide innovative banking solutions and drive digitalization in Uganda found a partner with corresponding desires for the industry in Airtel Uganda, stating that, “We envision the growth of businesses and individuals and the ease of access to financial solutions in this partnership.”
Commenting on the partnership, Airtel Uganda Chief Commercial Officer, Amit Kapur noted that Airtel Uganda prides itself in promoting financial inclusion by extending reliable, safe and secure financial services to people regardless of their background and offering them the best customer experiences.
“Therefore, the partnership with KCB Bank Uganda will not only enable us enhance our finance services to allow customers access customizable and convenient banking services but also cement our position as The Smartphone Network with widely accessible affordable and convenient mobile solutions for our customers,” he said.
Mr Makai Haumu – Incharge of National Payment Systems at Bank of Uganda lauded Airtel and KCB Bank Uganda for the great partnership and push to see that the product is approved by Bank of Uganda.
He said, ‘’Both KCB Bank and Airtel Uganda brought this product before Bank of Uganda, the team looked at it, analyzed how convenient it would be to towards easing access to digital finance solutions to millions of subscribers in Uganda although the product is still under testing for a period of 1 year’’.
He added that, since enactment of the law in September 2020, so far three licenses have been issued to three major entities as Airtel Mobile Money Commerce comes the first followed by MTN Mobile Money Commerce and Micropancy, these follows given approval for regulatory samples by Bank of Uganda.
He concluded that, ‘’We see the velocity of mobile money transactions increasing on a monthly basis as 15.5 million transactions were actively operating in March this year alone or had access to Airtel money services. We are therefore eyeing at more pull factors such as mobile money use which is easy, safe, convenient and gives opportunity cost to customers, nonetheless, payment of bills and utilities like Water, Electricity, Pay TV, School fees among others can be done at the comfort of their homes, Covid-19 proved a menace but managed to encourage people jump on to appreciate use of digital money transaction channels’’,