Case study

The growth of M-Shwari in Kenya – a market development story

Going digital and getting to scale with banking services

Published by
FSD Africa

Many Kenyans face volatile income and consumption levels. The absence of means to cope with such volatility is a cause of persistent poverty.

M-Shwari (meaning ‘calm’ in Kiswahili) is a combined savings and loans product launched through a collaboration between the Commercial Bank of Africa (CBA) and Safaricom. The M-Shwari account is issued by CBA but must be linked to an M-Pesa mobile money account provided by Safaricom.

M-Pesa helps to reduce income and consumption volatility. By reducing transaction costs and increasing security it has stimulated an increase in the volume, value and diversity of remittances received by its users. 

M-Shwari aims to deepen and diversify the consumption and income benefits of M-Pesa by providing clients with a facility to save and by offering credit beyond a user’s networks of family and friends. 

Surveys of M-Shwari users confirm that they mainly save and borrow to manage fluctuations in their cash flow and to cope with unexpected needs. 

M-Shwari has resulted in millions of poor Kenyans now using savings and credit services that help them manage risks, mitigate the impact of shocks and, increasingly, invest in improving their livelihoods.

 

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