Mobile operator Telkom Kenya has announced plans to launch a mobile loans service, as the company focuses on diversifying its product offering to increase revenue.
Telkom will join market leader Safaricom in the lucrative fast-growing market for quick digital credit that does not require collateral.
The operator said the loan product will be offered through its mobile cash unit T-Kash and the service is set to be launched in partnership with a financial institution.
In a statement the telco said, “From our interactive sessions with our customers, we have taken note that Kenyans appreciate mobile money solutions better when they keep on finding more reasons to attach value to their mobile wallets, whether they are sending money, paying for goods and services, saving, borrowing or trading.”
The new Telkom loans app will join competitors including KCB Group’s KCB M-Pesa and NCBA Group’s M-Shwari, both operated in partnership with Telkom Kenya’s rival Safaricom.
Since launching on the Safaricom mobile money application in 2012, M-Pesa and M-Shwari have become a key growth driver for both Safaricom and NCBA.
In Kenya, Safaricom dominates the mobile loans segment where borrowers get loans within minutes via their mobile phones, making digital loans a quick fix for daily bills.
Mobile money has grown to be a lucrative revenue stream for telcos and credit providers as customers use them to send cash, pay for goods and services and take short-term credit.
Official data from the Central Bank of Kenya shows that the total number of registered mobile money accounts in Kenya stands at 67.94 million as of February 2022.
Telkom Kenya, which is undergoing restructuring, is banking on fresh revenue streams through new products to push it to profitability and turn around its loss-making business.