Financial inclusion drive gets boost as local telecom unveils a micro-loan service

more Rwandans will be able to secure soft loans to cater for emergencies or pay for services thanks to a new initiative by TigoCash.
TigoCash users can now secure micro-loans on the platform without collateral. / Nadege Imbabazi.
TigoCash users can now secure micro-loans on the platform without collateral. / Nadege Imbabazi.

more Rwandans will be able to secure soft loans to cater for emergencies or pay for services thanks to a new initiative by TigoCash.

Chantal Umutoni Kagame, the Tigo Rwanda deputy chief executive officer, said the “Tigo Nshoboza Loan Service” allows eligible TigoCash subscribers to acquire small loans without collateral via their mobile wallets to cater for emergencies, buy groceries, or pay for electricity or school fees.

Kagame said the initiative will increase financial inclusion in the country. “The launch of Tigo Nshoboza product means that subscribers secure quick loans to attend to their needs, no matter the time they need the money and where they are.

“I am confident that this service will encourage more people to use mobile financial services regularly. We believe that this is a solution for people at a critical time when Rwanda is moving towards greater financial inclusion,” Kagame said at the launch of the facility yesterday.

She added that, during the pilot phase, subscribers will be able to borrow up to Rwf7,000, but the amount will increase when the facility is rolled out in the commercial stage.

However, the “Tigo Nshoboza” scheme will be accessed by a limited number of TigoCash customers aged between 18 and 65 years during this phase, she noted. The service will be accessible to eligible customers, regardless of whether they have a bank account or not.

She said the initial stage will allow Tigo Cash users to assess the delivery of the mobile loans service and the public’s response.

Airtel also operates a similar service where Airtel Money subscribers can borrow up to Rwf50,000 soft loans on their mobile phones, repayable in two weeks. The “Igurize Amfaranga” initiative is being implemented with Atlantis Limited, a local micro-finance institution.

In the region, Kenya’s Safaricom provides loans to subscribers under its Safaricom M-Pesa mobile money service. The telecom provides subscribers with loans of up to Ksh1 million or Rwf8 million through KCB. Tigo Tanzania also provides subscribers micro-loans.

Similarly, KCB Bank Rwanda has announced it will start giving customers mobile loans next month.

How the facility works

With the Tigo Nshoboza Loan Service, customers will be able to borrow money for seven, 14 or 21 days with the loan amounts dependent on the transaction usage on their TigoCash account as well as their Tigo airtime usage. To increase the amount of money that one can borrow, customers need must repay their loans on time.

Currently, Tigo has over 3.2 million customers and has invested over $310 million in Rwanda from 2009 to date.

There are over 8.9 million mobile phone subscribers in Rwanda as at December 31, 2016.

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