What are Mobile Loans and Instant Loans?

Created by Emilie Blauwhoff, Modified on Fri, 16 Feb 2024 at 05:12 PM by Emilie Blauwhoff

TABLE OF CONTENTS


Kwara offers 2 types of products that Members can apply for through the Kwara app or USSD:

  1. Instant Loans

  2. Other Mobile loans


Instant Loans 

These are loans that the member applies for and he/she immediately receives the funds in their mobile money wallet. There is no delay because the Credit Committee does not need to review the loan application. Instead, the SACCO has determined certain criteria up front which determine the eligibility and maximum loan amount per member. It works similarly to, for example, mShwari, but now provided by the SACCO!


The main benefit to the member is that they can access money that they need urgently, without having to go to predatory lenders. Instead, they can access it via their SACCO, and indirectly earn from that through dividend payouts.


Benefits to the SACCO are:

  • Reactivating dormant members: Members mainly become dormant because the SACCO offering does not fit their needs and financial capacity, not because they do not have financial needs. Through our Instant Loans, SACCOs can meet their members’ needs without increasing their risk

  • Increasing revenue per member: Most members will at some point take a form of an Instant Loan, but outside of their SACCO (mShwari, Fuliza, Tala, loan sharks). The need is there, and you are now able to bring that business to the SACCO instead of to competitors

  • Increase profits: short-term loans like Instant Loans can have high interest rates. This is direct revenue for the SACCO. Even after the Kwara share, the profit for the SACCO is profit that the SACCO would otherwise not have had at all

  • Healthy cashflow cycle: short-term loans are not a large burden on the cashflow. You can increase member engagement, revenues, profits and dividends without having to worry too much about liquidity


Mobile Loans

These are longer term loans that members apply to through the Kwara app or USSD. They can fill out all application details online, as well as attach the right guarantors to their loan. Once that is completed, the loan will appear to the SACCO administrators and they can go through the usual loan appraisal and disbursement process.


Benefits to the member:

  • No paper forms: Members can apply for a longer term loan without having to go to the SACCO office, fill in paper forms, or print out documents. Instead, they can do everything from the comfort of their home

  • No in-person contact with guarantors needed: instead of having to meet with a guarantor in-person to get their signature to be a guarantor, this can now be done through the Kwara app & USSD. This is faster, more private, and easier in case the guarantor does not live in the same location

  • Transparency on the process: the member can track what the progress is of their loan, instead of having to call the SACCO to be informed


Benefits to the SACCO:

  • No paper forms & printing: The SACCO will save a lot of costs and time on printing loan application forms and supporting documents.

  • Faster turnaround time: Because the loan application will come with all required documents and guarantors digitally attached, the appraisal process will be much smoother and faster

  • Reduced administrative work: SACCO administrators will no longer have to type the information from a paper form into the Kwara system. They also don’t have to constantly be in contact with the applicant to inform after the status of the guarantors or any missing attachments.



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