MTN’s mobile money platform, MoMo, and banking technology company Jumo have partnered to launch Qwikloan, an affordable short-term loan facility targeting the South African market that will drive financial inclusion across the country.
The telecom giant explains in a statement that Qwikloan enables MoMo users to obtain small, short-term loans on their mobile phones, ranging from R250 to R10 000 depending on eligibility, through an application process available via the MTN MoMo App or USSD (*151#).
It notes that unlike traditional banking institutions with a 24% interest rate on short-term loans, Qwikloan is able to reduce the cost of lending to a customer to as low as 10%.
According to the statement, this is made possible by MTN MoMo’s payment infrastructure and Jumo’s core banking infrastructure with AI prediction capabilities.
Speaking on the development, Bradwin Roper, chief financial services officer at MTN South Africa, said, “MoMo’s Qwikloan offering is a testament to our dedication to providing financial solutions that prioritize accessibility and affordability. In these challenging economic times, our goal is to empower South African consumers by offering a reliable alternative with significantly lower interest rates compared to banks."
The partnership comes as telcos across the country are ramping up their fintech offerings in a bid to diversify revenue streams. Last year, MTN rival Vodacom partnered with insurer Old Mutual to launch VodaLend Personal Loans, which gives customers and non-customers access to a personal loan of up to R250 000.
Telkom also recently launched a lending facility, targeting businesses with loans of up to R5 million.
MTN notes that Qwikloan has been available to smartphone users in South Africa via the MTN MoMo app since December 2023.
It points out that opening up access to include users of feature phones via USSD will now enable all South African individuals and informal traders to fund productive and sustainable ventures without the need for costly data or smart mobile devices.
“Our work with MTN will support entrepreneurs who need simple, quick access to working capital to grow their businesses. This work demonstrates how partnerships between financial technology companies such as Jumo and mobile money providers are essential to driving financial inclusion and creating more opportunities for customers to borrow and save conveniently,” says Jumo president Joe Mucheru.
“There is even greater potential to grow eligibility and accessibility by introducing bank partners to the initiative. Working with partners to build the infrastructure they need to achieve their goals is what we do.”