MTN’s mobile money platform, MoMo, has partnered with banking technology company Jumo to launch Qwikloan, a short-term loan service targeting the South African market.
According to MTN, Qwikloan allows MoMo users to secure short-term loans ranging from R250 to R10,000 on their mobile phones, based on their eligibility. The application process is available via the MTN MoMo App or by dialing USSD (*151#).
MTN notes that Qwikloan stands out from traditional banking institutions which typically charge a 24% interest rate on short-term loans. Qwikloan significantly reduces the cost of lending to as low as 10% for customers.
This is possible due to the payment infrastructure provided by MTN MoMo combined with Jumo’s core banking infrastructure equipped with AI prediction capabilities.
Bradwin Roper, chief financial services officer at MTN South Africa, stated;
MoMo’s Qwikloan offering reflects our commitment to providing financial solutions that prioritize accessibility and affordability. In these challenging economic times, our goal is to empower South African consumers by offering a reliable alternative with significantly lower interest rates compared to banks.
This partnership comes as telecom companies are expanding their fintech offerings in an effort to diversify their revenue streams.
Last year, Vodacom, a competitor to MTN, collaborated with insurer Old Mutual to launch VodaLend Personal Loans, offering customers and non-customers access to personal loans up to R250,000. Telkom also recently introduced a lending facility, targeting businesses with loans of up to R5 million.
Qwikloan has been available to smartphone users in South Africa via the MTN MoMo app since December 2023. MTN emphasizes that extending access to feature phone users via USSD will now allow all South African individuals and informal traders to fund sustainable ventures, without the need for costly data or smartphones.
“Our collaboration with MTN will support entrepreneurs who need simple, quick access to working capital to expand their businesses. This project showcases how partnerships between fintech companies like Jumo and mobile money providers are crucial in promoting financial inclusion and creating more opportunities for customers to borrow and save conveniently,” says Jumo president, Joe Mucheru.
He added, “There is even greater potential to increase eligibility and accessibility by bringing bank partners into the initiative. Helping partners build the infrastructure needed to achieve their goals is our mission.”
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