How to Increase Your M-Shwari Loan Limit

Your M-Shwari loan limit is the maximum amount you can borrow at any given time. For new users, this limit typically starts low, often as little as Ksh. 100. However, over time and with responsible usage, you can increase this amount. The primary factors affecting your limit include your usage of Safaricom services (especially M-Pesa), your savings habits, and your loan repayment history. Fortunately, there are proven strategies to increase your M-Shwari loan limit. This article will guide you through the steps and actions you can take to maximize your borrowing potential.

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Why Is Your M-Shwari Loan Limit Low?

Low Activity on M-Pesa

If you aren’t regularly using M-Pesa to send, receive, or transact, Safaricom has little data to assess your financial capability, resulting in a lower limit.

Poor Loan Repayment History

If you have taken out loans but delayed or failed to repay on time, it negatively impacts your credit score and reduces the likelihood of a higher limit.

Insufficient Savings on M-Shwari

M-Shwari encourages users to save money. A healthy savings account signals to the system that you are financially responsible and likely to repay loans on time.

Irregular Use of Safaricom Services

If you don’t use other Safaricom services like airtime, data, or voice calls regularly, your loan limit may stagnate.

Now that you know what influences your loan limit, let’s explore strategies to increase it.

Build Your M-Pesa Transaction History

The more active you are on M-Pesa, the higher your loan limit will grow. Safaricom assesses your transaction patterns to determine your creditworthiness. Here’s how to boost your M-Pesa activity:

Send and Receive Money Regularly: Make M-Pesa your go-to for transactions. Whether you’re sending money to friends, paying bills, or receiving payments, frequent use will help you build a solid transaction history.
Pay for Goods and Services via Lipa na M-Pesa: Use Lipa na M-Pesa for everyday purchases such as shopping, paying utilities, or settling restaurant bills. Safaricom tracks these transactions and uses them to assess your financial activity.
Top Up Airtime and Data: Regularly use M-Pesa to buy airtime and data bundles. These transactions may seem small, but they contribute to your overall financial profile.
Pay Loans on Time: If you’re already using M-Shwari or Fuliza loans, ensure you pay them off on or before the due date. Timely repayment demonstrates responsibility and improves your credit score.

Save Consistently on M-Shwari

M-Shwari rewards savers by offering a higher loan limit to those who consistently put money away. Here’s how you can maximize this benefit:

Open a Savings Account: If you haven’t already, open an M-Shwari savings account. It’s a simple process that you can complete via your phone.
Save Regularly: Even if it’s a small amount, aim to save money regularly. You can set a weekly or monthly savings goal and automate your savings using the M-Pesa menu. The more consistent your savings, the better your chances of increasing your loan limit.
Use M-Shwari Lock Savings Account: This account is designed to encourage long-term saving. The money saved in the Lock Savings Account is inaccessible for a set period (from one to six months). Using this feature demonstrates financial discipline, which can positively influence your loan limit.

Repay Loans Promptly

Your loan repayment history is a critical factor in determining your loan limit. To maintain a good credit score and qualify for higher loans:

Repay on Time: Always repay your loans on or before the due date. Late payments negatively impact your loan limit and make it harder to access credit in the future.
Pay in Full: Avoid rolling over loans or making partial payments. Paying in full not only clears your debt but also shows that you can manage your finances effectively.
Avoid Defaulting: Defaulting on loans severely impacts your credit profile, not only on M-Shwari but across other financial platforms that track your borrowing history.

Utilize Safaricom’s Fuliza Service

Fuliza is Safaricom’s overdraft service that allows you to complete M-Pesa transactions even when your balance is insufficient. Regular use of Fuliza, combined with prompt repayment of overdrafts, signals to Safaricom that you can handle credit responsibly. This can increase both your Fuliza and M-Shwari loan limits.

Improve Your Overall Credit Score

Your M-Shwari loan limit is also influenced by your overall credit profile, which includes data from the Credit Reference Bureau (CRB). If you have outstanding debts or negative listings on the CRB, your loan limit may be affected. To maintain or improve your credit score:

Clear Any Outstanding Debts: If you have loans with other financial institutions, ensure they are cleared. Avoid being listed on the CRB, as this will negatively impact your loan limit on M-Shwari and other credit platforms.
Check Your Credit Status: Periodically review your CRB status to ensure you are in good standing.

Use Safaricom Services Regularly

Besides M-Pesa and M-Shwari, make use of other Safaricom services. Buy airtime, use data bundles, and subscribe to Safaricom’s various offerings. The more you engage with Safaricom’s ecosystem, the more data the company has to assess your financial habits, which can lead to a higher loan limit.

In Summary

Increasing your M-Shwari loan limit is not an overnight process, but with consistent financial discipline, responsible usage of Safaricom services, and prompt loan repayments, you can steadily grow your borrowing capacity. Keep using M-Pesa for transactions, save regularly on M-Shwari, and maintain a good credit profile to improve your loan limit over time.

By following these tips, you can ensure that when you need to borrow more, your M-Shwari loan limit will be ready to support your financial needs.