MVola – the money arm of Telma, Madagascar’s second largest mobile operator – became the latest African provider to widen its service to include loans and savings accounts on its platform.
In a statement, MVola said it was the first provider in the country to launch a loan functionality on a mobile money platform.
According to its own figures, the company has 3.6 million users – equivalent to 14 per cent of the country by UN population estimates. The service competes with Airtel Money and Orange Money in Madagascar.
Its loan facility offers advances of up to MGA500,000 ($157) for 30 days with an interest rate of 9 per cent over the period. The service is backed by bank BNI Madagascar.
The expansion of mobile money platforms into wider financial services is an innovation seen in several African markets during the past two years.
In Kenya, Airtel began offering a similar service in September, with market leader Safaricom already providing loans and savings to its customers. MTN Group has been rolling out its Kongola loan service across its money markets since mid-2016.