Nairobi-based Kenyan fintech company, myNGOVO has introduced a self-service monetary app through which Kenyan workers can request for as much as 50% salary advance from their employers at zero interest charges. myNGOVO joins mobile money lenders such as Kenya Commercial Bank KCB M-Pesa and iPesa, which are both affiliated to Kenyan telco giant Safaricom, as well as Airtel Money and Eazzy in Kenya’s fintech space. The company’s CEO Methuselah Marava said about the launch, “myNGOVO stemmed from me seeing how my sister struggled in paying exorbitant interest charges to loan sharks because her employer didn’t have the working capital to offer her a salary advance. On further research, we realised it was a problem for many workers.” 75% of Kenyan workers earn below the average cost of living (Ksh50,000)
The minimum wage in Kenya is currently KSh13,572 ($125.52) per month. A report by the Kenya National Bureau of Statistics (KNBS) showed that 25% of the salary earners in the country earn less than the minimum wage. 75% of salaried Kenyans earn below KSh50,000, which is the average cost of living per month in Kenya. Most of Kenya’s employees would, therefore, likely have exhausted their salaries before each month’s end due to the cost of living being higher than the amount that they earn per month. With this being the case, many salary earners end up obtaining loans or requesting for a salary advance. Statistics from the Kenya Credit Reference Bureau (CRB) revealed that over 19 million of 53.8 million Kenyans are mobile loan borrowers. 40% (7.6 million) of this figure have acquired loans from at least 6 out of 10 mobile money lending services in the country.
Generally, the CRB statistics show that a large number of Kenyans, including salary earners borrow loans from mobile money lenders because they have a very limited budget. The problem is that many of the lenders take advantage of this situation by charging very high interest rates on repayment, high facility fees or deliberately accumulating hidden charges on customers’ loan or salary advance transactions. Kenya’s expansive fintech space and money lenders
Safaricom’s M-Pesa is the leading fintech platform in Kenya, possessing a huge 98.8% of the market share , according to the Communications Authority of Kenya’s Q1 Statistics Report. A Safaricom M-Pesa agent To qualify for KCB M-Pesa and M-Shwari loans, a user must be an M-Pesa subscriber for at least 6 months, have […]