Momo Kash Cameroon is a savings and loans service backed by MTN Cameroon using its proprietary MTN Momo Cash collection system.
MTN Cameroon has finalized the platform that will enable it to offer microcredit and savings services via mobile money.
About MTN Cameroon
Were already prepared. The mobile phone operator, a subsidiary of the South African group MTN Group, is the first to launch the mobile wallet service (mobile money) in the version we know today. It is also the first to allow the direct transfer of mobile wallets to another telephone network as part of the platform of the central African interbank electronic banking group (GIMAC), even if all the players in the sector are involved.
It also seems to have pioneer status in the field of microcredit. Concretely, in addition to carrying out deposit and money transfer transactions, it will now be possible for its mobile money customers to request small loans and receive interest on the money kept in their mobile money account.
See Also: List of Money Lenders in Cameroon.
How Does Momo Kash Work? (MoMo Cash)
Operationally, MTN relies on the platform created by Credix Cam, a Cameroonian start-up specializing in the field. The service is called MoMo Kash, and people who wish to benefit from it can simply subscribe via a code typed on the phone.
For the management of the payment system, the operation will now be provided by Mobile Money Corporation, a subsidiary of MTN Cameroon, in charge of managing the services of issuing electronic money and depositing and withdrawing funds. It recently complied with the capital rules of the Central African Banking Commission.
The telephone operator has signed agreements with several microfinance institutions in Cameroon for microcredit and savings services. It seems in the device that MTN will not grant the micro-loans itself. It will serve as a distribution platform for savings and credit services for the benefit of these financial institutions. It is, in any case, on the same model as MTN Ghana and M-Shwari in Kenya.
New Possibilities for the Microfinance Sector in Cameroon
The microcredit sector opens up new possibilities in Cameroon. MTN already has rating experience through its airtime credit service. But we learn that Indian and American companies are already asked to offer savings and credit management platforms by telephone.
The offers could therefore multiply very soon. Similarly, the Orange group launched its Orange Bank subsidiary. The other step is to offer credit and savings services via mobile.
Potential Caveats of Momo Cash Loans
The big unknown in this progress remains the interest rate, whether creditor when you have saved or debtor when you have borrowed. On an annual basis, interest is up to 350% of the principal amount borrowed.
MTN charges 10% more on the amount borrowed for borrowing on credit. The Kenyan experience was a tragedy for borrowers, to the point where the Central Bank is giving itself the means to regulate the level of rates.
There is an opportunity for microfinance institutions that could experience organic growth. Without opening new branches, they could reach millions of potential customers more efficiently.
MTN Cameroon, via its payment company, will collect the deposits for them and will carry out the savings on their behalf. It remains to be seen how the costs will be shared between these two categories of actors.
How to Borrow and Save with MTN Momo Cash Loans in Cameroon?
Read this comprehensive guide to borrowing or saving your money using MTN Mobile Money in Cameroon.
Suggested: Personal Loans in Cameroon.