The event was held at the Windsor Golf Club on Tuesday.
In addition to M-pesa's functions such as person to person transfer, deposit and withdrawal, M-Shwari brings in additional services such as loans, bank deposits and withdrawals and loans.
M-Shwari is targeted at low income earners who lack access to banking services including savings and credit.
Transfer of funds between M-pesa and M-Shwari will be free. Loans on the new service will be available between Ksh. 100 and Ksh. 20,000 for 30 days with a "facilitation fee" of 7.5 percent. Awuondo says the facilitation fee is not interest. Deposits are acceptable from Ksh. 1.
Deposits of between Ksh. 1 and Ksh. 10,000 will earn 2 percent annual interest while Ksh. 10,001 to Ksh. 20,000 will earn 3 percent, Ksh. 20,001 to Ksh. 50,000 will earn 4 percent while deposits above Ksh. 50,000 (Ksh,50,001 and above) will earn more 5 percent annual interest.
Considerations for the amount of the maximum loan amount one can acquire will be assessed depending on usage of Safaricom services including Okoa Jahazi, Data, voice and be a regular M-Shwari user. Users can dial *234*6# to see the amount of loan they qualify for. CBA says it will freeze a similar amount of M-Shwari deposits to the amount borrowed, though it is not clear if users can borrow more than they have deposited in their M-Shwari accounts.
Defaulters will see their loan rolled over for a further 30 days and a further 7.5 percent facilitation fee slapped on them. Defaulters after 60 days will see their M-Shwari accounts closed; Terms and Conditions of the service says that users owe CBA legal fee accrued in relation to their accounts.
Awuondo however remarked the default rate amongst lower and middle income earners tend to be quite low.
The product has been two years in the making, according to Betty Mwangi - Safaricom's Director of Financial Services and Isaac Awuondo. Michael Joseph says he first introduced the concept to Awuondo five years ago.
CBA said it would be using the newly launched Integrated Population Registration System (IPRS) system which will enable them to "Know your customer". Kajwang says IPRS enables the authentication of identity documents such as national ID cards and also whether the person presenting such a document is its actual user. IPRS will help in the minimisation of fraud risks.
M-Shwari is the second banking product to be linked to M-pesa after M-kesho, which wasn't that successful. Collymore said that Safaricom was banking on the M-Shwari to be successful and see the savings base in the country go from 6 percent to 30 percent. It also remains to be seen if Equity Bank, Safaricom's partner will revamp M-Kesho whose pitfalls included the need of users to visit the bank for transactions.
More information in relation to the service is available at http://www.safaricom.co.ke/personal/m-pesa/m-shwari/m-shwari-faqs