Commercial Bank of Africa’s mobile phone-based banking unit in Tanzania has registered 250,000 customers in three weeks since its launch last month, mirroring the lender’s success with the M-Shwari service in Kenya.

The mobile banking service dubbed M-Pawa is targeting low income earners, similar to M-Shwari’s strategy of reaching out to the unbanked population and small business owners.

That has helped it grow number of borrowers by more than 800 per cent in Kenya.

M-Shwari has attracted 897,000 loan borrowers since its launch, making CBA Kenya’s largest retail lender compared to Equity Bank’s 840,000 loan accounts.

“Just like we have seen M-Pesa allow a lot more Tanzanians to be active in the economy, we believe M-Pawa will provide Tanzanians with the confidence to save their money in a more secure way and also allow them to earn interest on their savings,” said Rene Meza, Vodacom Tanzania’s managing director.

Mobile network operator Vodacom has partnered with CBA Tanzania to roll out M-Pawa.

The service has seen a quarter of the registered customers make total deposit of $710,704 (TSh1.2 billion).

M-Pawa has so far loaned out over $41,002 (TSh70 million) to over 3,000 borrowers.

“Customers have been using M-Pawa more as a savings vehicle than a credit product,” said Mr Meza.

Mobile banking has been gaining traction, fuelled by money transfer services such as M-Pesa and Airtel Money that allow subscribers to operate savings accounts, earn interest on deposits, and borrow money using their phones.

Equity Bank, which has a regional presence and recently acquired a Mobile Virtual Network licence in Kenya, is also betting on its mobile division to grow its customers and borrowers in Uganda and Rwanda where Airtel, its mobile network partner, has a presence.

READ: Equity-Airtel deal steals Safaricom’s thunder with money-transfer platform

Just like M-Shwari, M-Pawa also allows customers to save from as little as one shilling and to borrow money depending on their savings and credit history. Depositing and withdrawing money on M-Pesa is free.

Launched in November 2012, in partnership with Kenya’s largest telecom operator Safaricom, M-Shwari has since strengthened CBA’s position in retail banking, with the lender hosting more than a quarter of the country’s total deposit accounts.

M-Shwari’s growth underscores the growing influence of mobile money in Kenya’s fast-changing financial services landscape.

CBA has 5.6 million deposit accounts or 26 per cent of the country’s total. It only ranks second to Equity, which has 7.4 million deposit accounts.