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Why is Mpesa Bank not regulated by CBK?
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Mainat
#1 Posted : Wednesday, May 01, 2013 6:51:04 PM
Rank: Veteran

Joined: 11/21/2006
Posts: 1,590
Safaricom receives deposits and lends the same. These are two core banking functions for which banks are supervised stringently with requirements to identify their credit, operational, liquidity risks et al and hold capital as necessary.
Why then does Mpesa not fall under the same rules?
Sehemu ndio nyumba
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jerry
#2 Posted : Wednesday, May 01, 2013 7:04:12 PM
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Joined: 9/29/2006
Posts: 2,570
CBA is the bank which is regulated. SCOM is an agent of CBA.
The opposite of courage is not cowardice, it's conformity.
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Museveni
#3 Posted : Wednesday, May 01, 2013 7:09:00 PM
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Joined: 8/16/2012
Posts: 661
Mainat wrote:
Safaricom receives deposits and lends the same. These are two core banking functions for which banks are supervised stringently with requirements to identify their credit, operational, liquidity risks et al and hold capital as necessary.
Why then does Mpesa not fall under the same rules?


Of course it is regulated.

All those issues of liquidity, operational & credit risk are all adressed.

The reason you can ONLY deposit/withdraw a maximum of 140,000 & can only have 100,000 maximum hold in your M-Pesa account.

Or what kind of regulation did you have in mind?
Live and learn; and don’t forget, nothing ventured, nothing gained.
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  | | Edit by user: Wednesday, May 01, 2013 7:10 PM | Reason: Not specified
Mainat
#4 Posted : Wednesday, May 01, 2013 9:32:41 PM
Rank: Veteran

Joined: 11/21/2006
Posts: 1,590
Do you know that for fact ama ni guess work? So does CBA carry the credit risk liquidity risks on its books?
jerry wrote:
CBA is the bank which is regulated. SCObM is an agent of CBA.


M7- tusaidiane jamaneni. Please soma the 2013 Prudential regulations. Hats kama ni chapter one.
Sehemu ndio nyumba
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  | | Edit by user: Wednesday, May 01, 2013 9:38 PM | Reason: Not specified
muganda
#5 Posted : Wednesday, May 01, 2013 10:18:48 PM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
I do know that for a fact. Little known but CBA is the proponent and key driver of the MShwari product - depositing/lending for interest. They take most of the gains and risk.
Mainat wrote:
Do you know that for fact ama ni guess work? So does CBA carry the credit risk liquidity risks on its books?
jerry wrote:
CBA is the bank which is regulated. SCObM is an agent of CBA.


M7- tusaidiane jamaneni. Please soma the 2013 Prudential regulations. Hats kama ni chapter one.
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Mainat
#6 Posted : Wednesday, May 01, 2013 11:16:53 PM
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Joined: 11/21/2006
Posts: 1,590
Unless they conned CBK, CBA gets a handling fee since the customers are through Safaricom.

muganda wrote:
I do know that for a fact. Little known but CBA is the proponent and key driver of the MShwari product - depositing/lending for interest. They take most of the gains and risk.
Mainat wrote:
Do you know that for fact ama ni guess work? So does CBA carry the credit risk liquidity risks on its books?
jerry wrote:
CBA is the bank which is regulated. SCObM is an agent of CBA.


M7- tusaidiane jamaneni. Please soma the 2013 Prudential regulations. Hats kama ni chapter one.


Sehemu ndio nyumba
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MoneyMonger
#7 Posted : Thursday, May 02, 2013 7:31:53 AM
Rank: Member

Joined: 4/25/2012
Posts: 110
Mainat wrote:
Unless they conned CBK, CBA gets a handling fee since the customers are through Safaricom.

muganda wrote:
I do know that for a fact. Little known but CBA is the proponent and key driver of the MShwari product - depositing/lending for interest. They take most of the gains and risk.
Mainat wrote:
Do you know that for fact ama ni guess work? So does CBA carry the credit risk liquidity risks on its books?
jerry wrote:
CBA is the bank which is regulated. SCObM is an agent of CBA.


M7- tusaidiane jamaneni. Please soma the 2013 Prudential regulations. Hats kama ni chapter one.




I recall from the news that CBA is the lender and not safaricom. M-shwari is a product of CBA to safaricom M-pesa customers. CBA has also been the banker for M-pesa before M-shwari came about.
There is nothing as dangerous as an Idea, when there is only one Idea
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Museveni
#8 Posted : Thursday, May 02, 2013 7:57:20 AM
Rank: Member

Joined: 8/16/2012
Posts: 661
MoneyMonger wrote:
Mainat wrote:
Unless they conned CBK, CBA gets a handling fee since the customers are through Safaricom.

muganda wrote:
I do know that for a fact. Little known but CBA is the proponent and key driver of the MShwari product - depositing/lending for interest. They take most of the gains and risk.
Mainat wrote:
Do you know that for fact ama ni guess work? So does CBA carry the credit risk liquidity risks on its books?
jerry wrote:
CBA is the bank which is regulated. SCObM is an agent of CBA.


M7- tusaidiane jamaneni. Please soma the 2013 Prudential regulations. Hats kama ni chapter one.




I recall from the news that CBA is the lender and not safaricom. M-shwari is a product of CBA to safaricom M-pesa customers. CBA has also been the banker for M-pesa before M-shwari came about.


Since you started the thread on M-Pesa, I thought the query was answered satisfactorily.

But since you have expanded to M-Shwari, you know very well these are two distinct services.

When you read the fine print when activating M-Shwari, then utaona unafungua account na CBA, in simple terms, you can say that the M-Shwari A/C is a virtual CBA account. SCOM just herds the subscribers & due to the high subscription rate, it used that as a leverage on CBA to get the higher fees.

See this from the M-Shwari "Terms & Conditions". the one nobody ever reads:

Quote:
2. DEFINITIONS
2.1. In these Terms and Conditions the following words and expressions (save where the context requires otherwise) bear the following meanings:
2.1.1. “M-Shwari Account” means a bank account held by a Customer with the Bank and which is opened and operated in accordance with the terms and conditions herein contained;
2.1.2. “Bank” means Commercial Bank of Africa Limited incorporated in Kenya as a limited liability company under the Companies Act (Chapter 486 of the Laws of Kenya) and duly licensed as a bank under the Banking Act (Chapter 488 of the Laws of Kenya) and includes subsidiaries of the Bank as may from time to time be specified by the Bank to you;


The integration with M-Pesa is just a bonus meant to entice everyone to jump aboard.
Live and learn; and don’t forget, nothing ventured, nothing gained.
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  | | Edit by user: Thursday, May 02, 2013 8:00 AM | Reason: Not specified
mlennyma
#9 Posted : Thursday, May 02, 2013 8:45:30 AM
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Joined: 7/21/2010
Posts: 6,194
Location: nairobi
A serious governor would look into coverups which safcom hides behind banks but at the moment they have the goodwill this time hiding in kenyattas bank.
"Don't let the fear of losing be greater than the excitement of winning."
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dunkang
#10 Posted : Thursday, May 02, 2013 8:54:50 AM
Rank: Elder

Joined: 6/2/2011
Posts: 4,824
Location: -1.2107, 36.8831
mlennyma wrote:
A serious governor would look into coverups which safcom hides behind banks but at the moment they have the goodwill this time hiding in kenyattas bank.

Ujinga nayo.
Receive with simplicity everything that happens to you.” ― Rashi

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