Ugandans first to benefit from a new credit facility from MTN Money – if they repay it quickly
MTN Uganda has launched a news finance product to extend quick credit to users of its mobile money services. The MTN Mobile Money division has created a new MTN MoMo overdraft service for MTN MoMo customers so they can buy now and pay back later.
The MoMoAdvance (MMA) service has been launched in partnership with NCBA Bank, reports Africa Tech and it makes overdrafts available to all MTN MoMo customers.
The MMA service will also extend to MoMo agents, merchants, SMEs and corporate users of MTN MoMo. MTN MMA is an extension of the MTN MoMo customers’ transaction system, which now lets customers spend even when they have gone beyond the original MoMo approved credit limit.
Fast credit, rapid interest accumulation
MMA is not a loan facility, like MoKash, because borrowed money has to be paid back within pay back in 30 days. While MMA allows customers to use more money than is in their accounts the overdraft amount is automatically deducted the next time a customer gets funds on their MoMo account.
MMA customers will pay a one-off access fee of 2.75 per cent of the amount overdraft used and a daily interest of 0.5 per cent on any outstanding balance. The interest is charged at the end of each day the overdraft is outstanding - to a maximum of 45 days.
This development follows a successful pilot scheme with 135,000 subscribers who have been with MTN MoMo since December 2020. MTN says customers must have been on Mobile Money for at least 6 months and passed credit scoring tests based on their usage of Mobile Money and other MTN services.
Mobilising the cash flow
MMA users will be able to send Mobile Money, pay for goods and services through MoMoPay, Airtime and bundle purchases. They can also pay their water and electricity bills and manage their TV subscriptions.
The new MMA apps is all about convenience, claimed Stephen Mutana, general manager for MTN Mobile Financial Services. It’s a product on which MTN and NCBA Bank have collaborated ‘for some time’. “We are happy to finally roll it out to all our customers. We believe it will give them the convenience to transact seamlessly beyond their wallet balances during times of need then pay back later,” said Mutana.
MMA convenient, needs discipline
MMA will solve the emergency funding problems that customer experience while transacting with MoMo, said Mutana. Activating MMA involves a one-time registration and dialling and number and selecting YES to accept Terms and Conditions. Once approved, the customer’s credit limit is available for unlimited use with no need for a new application when they access the limit.
“I encourage all customers to continue actively using MTN services such as MTN MoMo, data and voice, which improves their credit score over time,” Mutana said.