Kampala – MTN Uganda has announced a strategic partnership with financial institutions, including dfcu Bank and Letshego Bank, to launch a loan service specifically tailored for Mobile Money agents. This initiative aims to address a critical cash flow challenge faced by agents, especially during peak periods.
Richard Yego, the General Manager for Mobile Money at MTN, explained that during high-demand periods like weekends and holidays, agents often face liquidity issues. They experience cash shortages and have limited recourse when funds are withdrawn from their accounts, leaving them vulnerable.
"This is a significant concern," Yego stated. "As we approach major holidays and the election period, more people are choosing to transfer money using the MTN Mobile Money platform. When customers then need to withdraw that cash and the agent doesn't have it, it creates a problem and impacts the trust in these institutions."
Following this partnership, Mobile Money agents can now start borrowing funds through a newly established "Momo Agents Loans Marketplace." This platform will allow individual agents to access loans ranging from 50,000 Uganda Shillings (UGX 50,000) up to 5 million Uganda Shillings (UGX 5,000,000).
This move targets a crucial part of Uganda's economy. Research indicates that approximately 66% of small and medium-sized Ugandan businesses use mobile money for both deposits and withdrawals in their daily operations. However, these same agents frequently face shortages, particularly on weekends when traditional banks are closed, as Yego clarified.
Tony Ssekandi, from MTN Mobile Money, outlined the process for agents to access the loans, which is designed to eliminate the hassle of securing operational cash. The details of the application and disbursement process were explained to ease the liquidity challenge.
Giles Germany, the Head of Letshego Bank Uganda, affirmed their commitment to the partnership. "We have worked to ensure we extend this service to the agents, starting from UGX 50,000 up to UGX 5 million, and with very favourable interest rates," Germany said.
