MICROCAPITAL BRIEF: Opera Charging 1% Daily Interest on Short-term Loans in Kenya via OKash Mobile App, M-Pesa

OPay, a digital payment service developed by Norway-based technology firm Opera Software, recently began offering loans as small as KES 1,500 (USD 15) in Kenya via OKash, an app that works on Android smartphones. The minimum interest rate for initial loans is 1 percent per day, with a maximum term of 14 days. Repeat borrowers may apply for loans as large as KES 500,000 (USD 4,900) with an interest charge of 5 percent for the term of the loan.

The application process, which Opera describes as taking “minutes,” includes an analysis of the purpose of the loan as well as the borrower’s “repayment behaviour.”

The loan disbursement and repayments are made via M-Pesa, a mobile money service launched in 2007 by Kenyan internet service provider Safaricom. M-Pesa, which was developed by UK-based Vodafone, serves 29 million people in 10 countries as of 2016.

OPay allows users in Kenya, Nigeria and South Africa to purchase air time for mobile devices. Those in Kenya can also use the platform to pay water and electricity bills.

Opera, which was founded in 1996, is known for its eponymous web browser, which is used by 350 million people. The firm is privately held, and financial information on it are not available.

Sources and Additional Resources

Information given directly by Opera to MicroCapital

Opera press release
https://www.operasoftware.com/press/releases/mobile/2018-03-12

About OPay
https://operapay.com/about

Vodafone on M-Pesa
https://www.vodafone.com/content/index/what/m-pesa.html

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