CBA Bank, MTN launch MoKash a savings and loan

In an effort to boost the drive towards a cashless economy, Commercial Bank of Africa (CBA) in partnership with MTN Rwanda launched a savings and loan scheme- MoKASH. The product aims to enable mobile money customers in Rwanda to save, earn interest, and take short-term loans using their phones. Julian Mwika, Digital Financial Services Manager at CBA Rwanda, joined CNBC Africa to discuss the launch and the impact of MoKASH on the financial landscape in Rwanda. The conversation with Julian Wieker shed light on the significant uptick and interest in MoKASH since its launch. Although there have been challenges with sign-ups due to overwhelming demand, Wieker remains optimistic that the service will continue to gain traction as they address the initial hurdles. The product, which has seen success in Kenya, Uganda, and Tanzania, is poised to make a positive impact on Rwanda's cashless economy by providing easy access to savings and loans, with the ability to save amounts as low as one Frank. The investment in MoKASH is seen as a long-term partnership between banks and telecom companies, with the potential for expansion and growth in the future. While the current facilitation fee stands at 9%, Wieker mentioned plans to explore reducing the rate based on customer usage and behavior to make the service more affordable and attractive to users. The focus on consumer awareness and sensitization is crucial for the success of MoKASH, with efforts directed towards promoting a savings culture and educating the market on the benefits of the digital financial tool. Regulatory policies and support from the authorities play a vital role in shaping the digital payment landscape in Rwanda. Wieker highlighted the importance of collaboration with regulators to ensure that innovations are not hindered by restrictive policies. With a positive relationship with the regulator, Rwanda is well-positioned to foster a conducive environment for digital financial services and drive financial inclusion in the country. Looking ahead, the goal of achieving over 80% financial inclusion by 2020 seems realistic based on the success and uptake of similar products in other markets. With the potential to onboard thousands of users daily, MoKASH has the capacity to significantly contribute to Rwanda's financial inclusion targets and pave the way for a more digitally inclusive economy. As MoKASH continues to evolve and grow, stakeholders will closely monitor its progress and make necessary adjustments to enhance its impact on the financial sector in Rwanda.