MTN Uganda has introuced a mobile overdraft service in the country following the success of the Safaricom MPESA Fuliza overdraft service.
Dubbed Momo Advance, the Service is a collaboration between MTN Mobile Money Uganda and NCBA Bank Uganda.
NCBA Bank is the same bank that has run Fuliza, the region’s first mobile overdraft service since 2019 in partnership with Kenya’s Safaricom.
Momo Advance is expected to enable MTN mobile money customers to access advance mobile money (MoMo) funds that they can use to complete their MoMo transactions and pay back later. This follows a successful pilot scheme with about 135,000 subscribers since December 2020.
Available to all MTN MoMo customers, MTN MoMo Advance is an extension of the MTN MoMo customers’ transacting capability, enabling them to continue transacting even when they have run out of MoMo within an approved credit limit.
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For eligibility, MoMo Advance is open to those who have been using MTN’s mobile money offering for a minimum period of 6 months, passed credit scoring based on their usage of mobile money, and other MTN services.
Some of the uses from the service include:
- Send mobile money
- Pay for goods and services via MomoPay
- Pay bills
- Its also available to corporates, SMEs, merchants and mobile money agents
As an overdraft facility, MoMo Advance lets customers use more money than they actually have on their accounts and the overdraft amount is automatically deducted the next time a customer gets funds on their MoMo account.
The service attracts a one-off access fee equivalent to 2.75% of the amount overdraft amount used and a daily interest of 0.5% on any outstanding balance. The daily interest shall be charged at the end of each day that the overdraft is outstanding up to a maximum of 45 days.
In Kenya, Fuliza has become quite popular with reports revealing the service lends over $12 million to Kenyans daily.
African payments gateway, Flutterwave, also recently announced a partnership with MTN’s MoMo service that will see users able to make payments to businesses using their mobile money accounts via Flutterwave.
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RECOMMENDED READING: Mobile Money Account Holders in Uganda Will Now Start Earning Interest, Says Bank of Uganda
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