THE hustle of petty traders who require small loans to turn around their businesses is expected to be a thing of the past with the introduction of a short-term loan product for customers of MTN mobile money.
Christened “Mjara loans” the product which was introduced by MFS Ghana, a mobile phone financial services company, is expected to offer fast and convenient options for subscribers including petty traders on the MTN network to access soft loans, stress-free.
It is targeted at people between the ages of 25 and above and the minimum amount to be taken is Gh¢100 and a maximum of Gh¢2,500 at a time.
The product is expected to provide a major relief to people who fall prey to fake micro credit as well as savings and loans companies that have mushroomed throughout the country.
Launch
Launching the product, the General Manager, Marketing, MFS Ghana, Ms Julie Neogy, recounted the many challenges majority of Ghanaians within the lower to middle income brackets face in their quest to access loans, saying acquiring loans from the formal system is cumbersome.
She said many of the people who owned small businesses suffered most because they were unable to access loans to expand.
“With Mjara loans, there is no need for paperwork, guarantors, or collaterals; Mjara loans are quick, convenient and confidential,” she added.
How to qualify
Mobile money users are required to register with GH¢30 within three months.
The money is to be paid in monthly installments of GH¢10 after which a customer qualifies to apply for a loan. It attracts a fee of four per cent and customers have between two weeks and three months to repay.
Explaining the processes involved, the Marketing Manager, Mr Thomas Bannerman-Mensah, said the product was for people who appreciated
he convenience the mobile money service offered.
“All transactions between the loan providers and customers will be done on phone so you do not need to walk a long distance to access loans,” he noted.
According to him, all one needs is to dial the service number *565*5 and follow the instructions.
It is expected that other mobile networks in the country will also be given the opportunity to provide the same service through their mobile money systems by the close of the year.
Will it work?
There are about 28.6 million mobile voice subscribers of which MTN is leading the market with about 13 million subscribers, representing about 45.83 per cent as of February this year, according to the National Communications Authority (NCA).
By this, it is expected that should about a quarter of the total number of subscribers of MTN decide to access the loans, they would have contributed a huge sum into a pool from where MFS would disburse the loans to interested persons.
At the end of the day, the more people contribute to the pool, the more money will be available for disbursement.
Mobile money global
Mobile money seems to be catching up very fast globally because of the security and convenience it offers to people.
Although in Ghana the process is gradually catching up, it is expected that with the new product, more people will join the mobile payment system to grow the global numbers.
For instance a new report from Juniper Research has found that the value of global payments via mobile devices will reach about US$507 billion this year, a rise of nearly 40 per cent year-on-year.
The report - Mobile Payment Strategies: Remote, Contactless & Money Transfer 2014-2018 - found that growth would continue to be driven by purchases of physical goods via mobile devices.
Average transaction sizes over tablets are already exceeding those via desktop PCs in many markets.
It also observed that while ??spend via smartphones?? was increasing sharply, their primary function in retail was as search and discovery devices with the final purchase being made on the tablet.
Meanwhile, the report argued that the scale of digital transactions was receiving a significant boost through the adoption of mobile ticketing applications, with metro and transit authorities in Europe and North America that have already deployed services, experiencing high levels of adoption.
However, the report observed that progress in contactless mobile payments had been slow, with few commercial launches.
Nevertheless, it argued that the prognosis for the medium term was brighter, following the emergence of cloud-based SE (Secure Element) solutions which offer the opportunity for reduced time-to-market for NFC (Near Field Communications) solutions.