MTN Uganda has partnered with Kenya’s NCBA Group to introduce an overdraft facility via MTN Mobile Money.
The overdraft facility has been christened MoMoAdvance, the Fuliza version of Kenya, a move seen as a new strategy to put the Yoweri Museveni-led country into the fintech world.
Ugandans will be charged 2.75 percent as an access fee of the amount borrowed and a daily interest of 0.5 percent on the outstanding balance for a maximum of 45 days.
“MTN MoMoAdvance is a product that we have been working on for some time with our partners from NCBA Bank. We are happy to finally roll it out to all our customers and we believe that it will give them the convenience to transact seamlessly beyond their wallet balances during times of need then pay back later,” Stephen Mutana, the General Manager MTN Mobile Financial Services said.
MTN Uganda says the MoMoAdvance is not a loan facility.
“Unlike the MoKash loan facility where MTN customers can borrow money within their credit limits and pay back in 30 days as they wish, MoMoAdvance on the other hand is an overdraft facility that allows customers to use more money than they actually have on their accounts, and the overdraft amount is automatically deducted the next time a customer gets funds on their MoMo account,” adds Mr. Mutana.
MoMoAdvance is a borrowed idea from Fuliza of Kenya’s giant telco Safaricom which was launched in January 2019 and allows subscribers to complete transactions even when they have insufficient funds in their M-Pesa mobile wallets.
The overdraft services are based on a borrowing limit that is defined by a customer’s transaction history, while the overdrawn amount and accrued interest are deducted from the customers’ wallets anytime they are topped up.
Fuliza has grown in popularity over the last three years among M-Pesa users, with Safaricom now giving out about Ksh.1.3 billion worth of overdraft loans every day.
Fuliza is offered in partnership with Kenyan-based KCB and NCBA.
