Barclays Bank recently launched Timiza, a loan application that will allow its customers and non-customers to access banking services through their phones. This is the bank’s first step in the implementation of its virtual banking strategy.
In recent years, mobile banking has continued to grow with more customers opting to use it as a means of transacting money. According to The Communications Authority of Kenya, last year between July- September mobile money subscriptions stood at 28.1 million with a total of 537.2 million transactions.
Timiza is meant to target young professionals ‘hustlers’ who are seeking to acquire capital to either start or grow their businesses. So why is Timiza a great option for you as an entrepreneur?
No need for collateral
You do not need to offer collateral as you register to take the loan. You are also not required to bring in any bank statements of any kind to prove your credit rating. Your credit rating will be determined by your MPESA credit history. To register for the application, you simply just need to download it by dialling *848#. Alternatively, you can download it from your Google Play Store. Once done, fill in your name, ID number and date of birth. You will then receive a pin and are qualified to access loans.
Access to loans worth up to KSHS 150,000
Depending on your credit rating, you will be able to access funds up to 150,000. The loan repayment period is 30 days. The transaction fees are;
1.7℅ monthly fee
5% processing fee
This will bring the total sum interest to 6.7%.
Transacting using your account
Once registered as a customer, you will be able to deposit money into your account using MPESA. This will allow you to send and receive money to and from other Timiza users. It also allows one to save money by keeping it in a wallet.
The application also allows you to buy insurance. For as little as Ksh. 42 you can get a personal accident cover of Ksh. 100,000 and Ksh. 40,000 funeral cover.
Additionally, using the funds in your account, you can pay your utility bills such as electricity or water bills. There are future plans to include a virtual prepaid card that will allow you to pay for online services using your Timiza account.
Barclays has partnered with Safaricom’s Little Cabs to provide customers with taxi services. You can now access a Little Cab taxi right from the Timiza application itself and pay for your ride using your account.
The bank is seeking to leverage the strong preference of customers to mobile and internet banking as opposed to more traditional options. It is also seeking to ease the process of acquiring insurance as opposed to the longer method of having to talk to a bank officer. In time, Barclays will add more insurance options to the application.
The application is among many which will work to drive Gross Domestic Product (GDP) up. This is because physical cash is very expensive to handle, printing, handling etc. If we can increase paperless transactions, the price of goods and services is likely to go down. This will, in turn, drive more levels of goods and eventually GDP.