MoKash success sends banks to the drawing board-to launch rival products

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Launched two months ago, MoKash, a product of telecom giant MTN Uganda and Commercial Bank of Africa (CBA) has been well received in the market.


The latest market reports indicate the groundbreaking innovation that blends mobile telephony, mobile money and banking has already hit 850,000 customers and still growing.

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The MoKash was started in Kenya in November 2012. Four years later, the platform has more than 18 million customers. In Tanzania where it was launched two years ago, MoKash boasts of four million customers.


MoKash allows MTN customers to save and borrow using their phones. Customers can save while earning an interest or take out short-term loan at a reasonable fee. Depending on their loan limit, a customer can take a loan between Ugx. 3,000 up to Ugx. 1,000,000.


Behind the success of MoKash

MoKash success is driven by a host of factors, but chiefly, convenience. The service enables MTN customers to transact from anywhere, any time.


Unlike banks and microfinance institutions which require customers to fill in forms and present collateral, MoKash allows gives customers access to unsecured loans.


There is no need to sign any documents to open up and transact with a MoKash account. Customers have up to 30 days to repay the loan. However, if the loan is not paid within the 30 days, customer can extend the outstanding loan for another 30 days at a fee of 9%. Approved Loan is deposited directly onto customer’s MTN Mobile Money account. The money can be withdrawn from any MTN mobile money agent.
The other benefits are: No minimum balance required, No transactional charges while moving money between



These benefits have seen more Ugandans abandon commercial bank, Microfinance institutions and SACCO’s for MoKash. The worst hit are microfinance institutions and SACCO’s operating up-country.


In order to qualify for the loan, a customer needs to have been an MTN Mobile Money subscriber for a minimum of six months, save on MoKash and actively use other MTN services such as voice, Mobile Internet and MTN Mobile Money.


The minimum loan amount a customer can access is Ugx. 3,000 Maximum is Ugx. 1,000,000 but, is subject to customer loan limit. The loan limit is determined by utilization on the following services: MTN Voice, MTN Mobile Money and MTN Data and also by how long the customer has been on the MTN network. Customers are also encouraged to save with MoKash before they can borrow. The customer’s average MoKash savings balance and loan performance i.e. loan uptake and repayment will also affect their loan limit.
Competition developing similar products

To avoid further damage, commercial banks and micro finance Institutions including Bank of Africa, Pride Micro Finance, FINCA Uganda, Housing Finance Bank, among others are developing platforms similar or even better than MoKash. The platforms are hitting the market soon.


MoKash is a mass product, this is the target market for  micro Finance Institutions. It is evident; they [especially leading players Pride, and FINCA] could not sit as competitions eats into their market.


Speaking to journalists after the launch of MoKash recently, CBA’s General Manager for New Business Ventures, Eric Murioki, revealed that their projection is that MoKash would hit 40 percent of the current seven million mobile money users within one year, 60 percent within two years and 75 percent of mobile money users within three years.

MTN overshadows CBA

According to MoKash arrangement in Uganda, CBA is responsible for the operating capital, risks, balance sheet management and regulatory compliance. On the other hand, MTN is charged with connection, communication, distribution and user interface.


As MoKash grows, CBA has been overshadowed by MTN, thanks to its brand. The CBA is a Kenyan bank that targets a unique market-the high-end [Kenyan firms in Uganda, rich living and working in Uganda among others].



Analysts say, the CBA should capitalize on MoKash success to get gain more visibility and brand awareness.

The bank is able to have its brand felt in the market without opening more branches. The CBA must to work out more marketing and brand awareness strategy.


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