Mobile network operator Safaricom Ltd in partnership with the Commercial Bank of Africa has launched a mobile phone fixed deposit account to offer more banking solutions on its M-Shwari operations. 

Dubbed M-Shwari Lock Savings, the account will enable customers to save a minimum of Ksh500 ($5.7) for six months, at an interest rate of up to 6 per cent per annum.

The service targets the least penetrated bankable population.

“Most banks pay an average of 1 or 2 per cent for savings, we are offering from 2 up to 6 per cent and we allow customers to get a loan from the M-Shwari credit service to fund the fixed account for long-term use,” said Eric Muriuki, CBA’s general manager.

CBA hopes the new product will widen its capital base, replicating the success of M-Shwari.

M-Shwari was launched in 2012 to provide loans to customers, a move that has grown CBA loans accounts by more than 800 per cent from 89,000 in 2012 to 897,000 in December last year.

ALSO READ: CBA registers 250,000 Tanzania mobile bank customers

The bank is now the country’s top retail lender, accounting for  29 per cent of market share in 2013, up from 4.2 per cent in the previous year, according to Central Bank of Kenya statistics.

“Despite 150,000 customers transacting up to Ksh250 million ($2.9 million) daily, only 20 per cent save money for the long term, as many withdraw it after about 12 days,” said Mr Muriuki.

Recently, Airtel partnered with Equity Bank in a deal that will see up to 60 per cent of Airtel Kenya’s network capacity leased to the bank. Equity is the region’s first mobile virtual network operator. Under the partnership, the bank will disburse loans and offer cash transfer services for its eight million customers. 

READ: Equity-Airtel deal steals Safaricom’s thunder with money-transfer platform
If Safaricom is to ride on its current M-shwari customers, it would have over seven million customers, closely matching Equity’s numbers.