I have used the service from more than six months, and it has been a curse in disguise. I say this because, I mostly view it as a blessing, but on scrutiny, it feels like a curse. I keep giving out my money in form of interest payments, when I could just avoid borrowing money.
The other side of M-shuari is that, you can earn interest on the money you save. The catch is that you money has to be there for at least 3 months to qualify for interest, and the interest rates are too low. For example, with anything less than KES 50,000 you get less than 5% per annum. That is about 1.25% interest after three months. If you ask me, there are better ways of earning more than that amount in interest. A real bank will be happy to give you between 6% and 10% for the same amount of deposit annually, and that would translate to about 2% per quarter, which is still low by my standards.
Anyway, back to Mshuari, my credit limit is now KES 1,100 and I suspect I will move to a higher amount soon. Time passes fast. It just seems like yesterday, when I activated my Mshuari. Now, I have paid back about 500 in interest alone. That is a very sad fact. To the shareholders of Safaricom and CBA, this is good news. The service is a real source of income, and it has very little administrative costs.
To users, this service can be a savior, especially when you need that money so bad, but any misuse of the payday loan service quickly puts you in the red.
I have talked to some people about the service. Other said they are yet to activate it on their phones, others are unable to do so after very many attempts and others got themselves blocked for failing to pay on time. I guess they did not see the point of paying and borrowing immediately so that, it looks as if you just rescheduled repayment and increased the interest due.
If you borrow 500, and then it’s due, all you need to do is pay back the 500 plus interest, and then borrow it again, so for a cost of the initial interest you have your 500 back in your pocket. This knowledge helps when you are really in deep shit and cannot get yourself to pay up your debts. This is somehow related to paying the minimal amount due on your credit card. Remember, this M-shuari payday loan service is just like a credit card service for Kenya, now that you can transfer money to your M-pesa account and then use mpesa to pay bills.