Last month, when Econet launched the mobile phone based savings account, in an article titled, “EcoCash (Save) is the new bank account for the masses” we wrote:
The savings account opens up opportunity for EcoCash to launch even more services that so far have been the reserve of traditional financial institutions. Loans especially. And even the release today has a hint of that when you read that they are encouraging employers to start paying salaries into this savings account. Once a salary is being paid into an account, loans can be issued to that subscriber with enough confidence it won’t go bad. And again this doesn’t necessarily have to be the micro loans.
It didn’t take too long. Today, a press release from the company appeared in our mailbox. The title: “EcoCash to lend money“.
Announcing the service, the mobile operator said that starting early next year, users of mobile money savings service will be able to borrow from the company’s partner financial institutions via EcoCash. So far, that financial institution partner is Steward Bank.
The release doesn’t have details about the service – who will qualify, amount limits, how long the loans will take to process, interests rates and so on. We’re guessing however that platform will do some kind of credit rating based on inflows into the savings account; most probably predictable inflows such as salaries. If meeting requirements, the loans will likely be processed much faster than traditional loans banks provide. The price of the money is anyone’s guess right now, but we’re guessing it’ll largely be at par with market rates.
We will posting more details as we get them, but in the meantime, here’s the full release:
EcoCashSave account holders will soon be able to also borrow money, just like ordinary bank account holders. This is part of what will be called EcoCashCredit that Econet is planning to roll out early in the new year.
Econet Wireless CEO, Douglas Mboweni, confirmed that a scheme is being developed whereby people can also borrow money from EcoCash.
He said the borrowing will be done through partner banks, including Steward Bank.
He said lending was a natural next step, adding that the plan was to lend for uses such school fees, right up to housing loans. He said more details would be released in the new year.
Meanwhile, Mr Mboweni confirmed that the number of bank accounts held by Steward Bank on behalf of EcoCashSave now surpassed those held by all the banks put together. “We have more than 900,000 account holders, compared to 850,000 for all the banks,” he said.