TNM Mpamba Ltd, a wholly owned subsidiary of TNM Plc has become the first mobile telecoms network service provider in Malawi to offer cash loans using mobile phone wallets.
General Manager Christopher Sukasuka has told reporters in Lilongwe that the loan attracts a prorated interest rate of 6%, a penalty of 0.5% and access fee of 10% where customers exceed a prescribed repayment of 30 days.
He said the maximum amount currently allowed is K20,000 in form of either cash or electronic value from an agent or bank, and electronic wallet value. The cap will increase over time, he said.
“This is the smartest way to manage finances in these hard times. It takes away the stress from customers, as it is the easiest overdraft to get, accessible 247 on your phone wherever one is. It’s difficult to obtain loans when one needs most from conventional banks, but TNM Mpamba has eased that burden. Our agents will also be able to complete transactions even when they don’t have positive balance,” he said.
Sukasuka, who was flanked by TNM Plc Chief Executive Officer Michel Hebert and Managing Director of Huawei Malawi Gu Mu, the official TNM technology partner said the key eligibility requirement is customers who have used Mpamba for 90 days and satisfying KYC requirements.
“An interest rate of 6 percent per month, prorated, will apply and a penalty of 0.5% may accrue where customers exceed a prescribed repayment period of 30 days. Such interest will be necessary to cover the service costs when customers exceed 30 days before crediting their wallets. The funds will be deducted from the same Mpamba wallets,” he said.
Dubbed TNM Mpamba Kankhe, the facility offers a financial envelope allowing customers withdraw cash or transact with equivalent value using their TNM Mpamba wallets.
Sukasuka said apart from the option of cash advances, Mpamba Kankhe will provide overdrafts for payment categories such as utilities, merchant (POS) payments, satellite television subscriptions, airtime and bundle recharges and Person-to-Person (P2P) transfers.
He said apart from the option of cash advances, Mpamba Kankhe will provide overdrafts for payment categories such as utilities, merchant (POS) payments, satellite television subscriptions, airtime and bundle recharges and Person-to-Person (P2P) transfers.
The General Manager said apart from individual customers, the overdraft facility has also been extended to agents to allow them to transact with more than their wallet balance.
Determination of agent overdraft registration/limit will be based on agent’s monthly commissions, transaction volumes (Cash in, cash out, airtime top ups and agent bill payments) and duration on Mpamba (6 months)
Through the facility, agents will be able to carry out customer cash in, ESCOM token sales, TNM airtime/bundle sales plus other Mpamba agent bill payments that may be introduced.
He said Mpamba Kankhe is safe as it is protected by TNM Mpamba’s safety features that include PIN encryption, and privacy settings. Mpamba kankhe will operate within the legal framework provided by the Reserve Bank of Malawi (RBM).
Sukasuka said Mpamba Kankhe highlights TNM’s commitment to contribute to economic growth activities by applying mobile telecoms technology.
“TNM Mpamba strongly believes that providing our customers with credit at concessional rates as Mpamba Kankhe does, will shred the barriers to financial inclusion while accelerating growth of the credit society and fulfilment of personal and institutional financial goals,” he said.
Gu Mu said Huawei is working hand in hand with TNM Plc to transform the telecoms landscape in Malawi by offering life-changing innovations such as the latest loan product.
“We are committed to improve the telecoms landscape with TNM, and we will continue to support them to build best network and mobile money platform in Malawi,” he said.