M-Shwari Leads by 34% Share in Digital Credit

According to Competition Authority of Kenya (CAK) statistics, NCBA-owned mobile lending platform M-Shwari leads the list of digital lenders with a 34 percent market share.

The regulator’s data shows M-Shwari is followed by Fuliza at 25%, KCB M-Pesa at 15%, Tala at 13%, Branch at 9%, and others at 4%.

The news came as the regulator approved Nigerian fintech Moniepoint Inc’s full purchase of Kopo Kopo, a mobile payments network in Kenya.

According to the CAK, the merger will not have a negative impact on the competitiveness of other companies in the digital credit market.

The transaction value was not disclosed, but the agency claims that the overall turnover exceeds Sh1 billion.

“The Competition Authority of Kenya has approved the proposed acquisition of 100 percent shares in Kopo Kopo Inc by Moniepoint Inc unconditionally,” said CAK in a statement on Tuesday.

Moniepoint, which was founded in the United States, had no operations in Kenya prior to the CAK certification, but the company plans to expand into the country soon.

“The Competition Authority of Kenya has approved the proposed acquisition of 100 percent shares in Kopo Kopo Inc. by Moniepoint Inc. unconditionally,” said the State agency.

The CAK claimed that since M-Shwari makes up the remaining 4% of the market share, the merger would not have an impact on M-Shwari or any other digital lenders.

“With regard to the proposed merger, the target entity is ranked among firms with a combined market share of four percent… Premised on this, the proposed transaction is unlikely to lead to a substantial lessening or prevention of competition in the market for the provision of digital credit.”

M-Shwari, a savings and lending service that enables M-Pesa users to save, get credit, and earn interest, is offered by Safaricom in collaboration with NCBA Bank Kenya.

Customers of M-Pesa can complete their transactions when there are insufficient funds in their mobile wallet thanks to the overdraft Fuliza service that is provided in collaboration with NCBA and KCB Bank Kenya and the telco.

The facility is used by borrowers to take care of their immediate requirements, such as paying bills and buying groceries. Additionally, small businesses use the overdraft to get operating capital and replenish their inventory.

The CAK claims that although there are many service providers in the market, most customers generally use one of the three loan products connected to M-Pesa—M-Shwari, KCB-M-Pesa, or Fuliza.

32 digital lenders have received licences from the Central Bank of Kenya thus far.