Starting February 20th, M-Shwari, the popular mobile loan and savings service offered by Safaricom and NCBA Bank, will begin deducting excise duty tax directly from the loan disbursement amount. This change is set to impact the way customers interact with the service and their loan repayment strategies.

M-Shwari has grown to become one of the leading digital lenders in Kenya since its launch in November 2012. The service provides loans ranging from Ksh 100 to Ksh 50,000, and in some cases, up to Ksh 1 million. These loans attract an interest of 9% per annum, where 7.5% is the loan fee while the remaining 1.5% is the excise duty.


The new policy will see the 1.5% excise duty deducted directly from the loan disbursement amount. This means that customers will receive their loan amount minus the excise duty. For instance, if a customer borrows Ksh 1,000, they will receive Ksh 985 in their M-PESA account, with Ksh 15 being deducted as excise duty.

This change is likely to affect the borrowing behavior of M-Shwari customers. Since the excise duty is deducted upfront, customers will have to factor this into their borrowing decisions. Customers need to understand this change and plan their finances accordingly.

This move by M-Shwari is a step towards greater transparency in the way it charges for its loans. By deducting the excise duty upfront, customers can see the cost of borrowing. This can help customers make more informed decisions about their borrowing needs.

While this change may require some adjustment for M-Shwari customers, it ultimately leads to greater transparency and better financial planning. As always, customers need to borrow responsibly and understand the terms and conditions of their loans. With this new policy, M-Shwari continues to evolve and adapt to the needs of its customers and the regulatory environment.

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Nigel Jr.
As a tech enthusiast and expert, Nigel Jr. is dedicated to providing in-depth and insightful content on all things technology. With a background in online journalism, product reviewing, and tech creation, Nigel has become a trusted source for all things tech.

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