An overdraft service for Mpesa users

Seabata Mahao

Telecommunications giant company Vodacom Lesotho (VCL)’s Financial Services teamed now allows for users to apply for an overdraft to add on to their financial shortage, this was revealed this week.

Vodacom Lesotho Financial Service teamed up with Redeem Financial Services (RFS) to bring “Ntlatse”, explained as a short term loan ‘overdraft’ which is accessible on the M-Pesa platform which tops up a customer when they have insufficient funds while doing a transaction.

VCL Financial Services Managing Director, Palesa Mphunyetsane explained that in the past few months, M-Pesa had grown to become an independent financial services company registered with the Central Bank of Lesotho (CBL).

“After partnering with RFS, we then realised that it becomes a problem when people want to borrow money from financial services companies because they are either asked for a hoard of impossible requirements, or the logistics are difficult. So, we thought of something that is more innovative using the latest technology from VCL, that’s when the two companies invented ‘Ntlatse’ as a way to reach out to Basotho,” Mphunyetsane explained.

She highlighted that VCL Financial Services is set on partnering with other financial companies including insurance companies, micro finance companies and others already working with Basotho with financial matters.

The ‘Ntlatse’ transactions include; send money, pay bills or pay merchant and is available to all M-Pesa subscribers.

Subscribers have to sign-up or opt-in to use the service and can opt out at any time. Also, users can access and sign up by using the USSD code *200# and continue with services they intended to perform after which an overdraft will be automatically applied in the case where they do not have enough funds in their accounts to complete a transaction.

For his part, RFS Chief Operation Officer (COO), Thuso Mpholo, explained that indeed RFS is licensed under CBL and in their partnership with VCL Financial Services, they have invented ‘Ntlatse’ from the slogan ‘U shorta ka bokae re u tlatse’ which is already running.

He also stated that, ‘Ntlatse’ is affordable and easily accessible because all that is needed is just a phone.

“Customer behaviour differs on M-Pesa and each customer’s behaviour determines their individual score in our assessment which in turn determines how much, and how often a customer may receive top-ups from ‘Ntlatse’. ‘Ntlatse’ is safe and convenient as everyone who uses M-Pesa has all the information needed registered with VCL,” Mpholo said.  

He however said the awarding of limits will depend on a customer’s credit viability and how long they have been using M-Pesa.

“A customer needs to have been using M-Pesa for a minimum period of at least three months to qualify and to repay ‘Ntlatse’. Customers simply deposit money into their M-Pesa account or receive M-Pesa after which their ‘Ntlatse’ balance will be deducted automatically,” he said.

Mpholo stated that, the non-bankables can just borrow money from ‘Ntlatse’ then return it later after making their profits. He added that, this is also in line with the mission of M-Pesa to provide access to credit for those who cannot access credit in the mainstream banking industry.