NAIROBI Dec 13 Kenya's Safaricom Ltd
is facing a lawsuit from a local micro finance firm over the
telecom group's revamped mobile phone banking service M-Shwari.
Faulu Kenya, an organisation that lends small amounts of
money to consumers and small businesses who can't borrow from
banks, has launched a legal action accusing Safaricom of
breaching its intellectual property rights with the launch of
In its lawsuit, Faulu said it had taken a proposal for a
similar offering to Safaricom a year ago, before deciding to
start a service with the country's second-biggest mobile
operator, Bharti Airtel.
Safaricom hit back, saying M-Shwari was its proprietary
product and adding it would seek a resolution of the case
through the right legal processes.
"We believe that this lawsuit is tainted with malice because
it is founded on untrue allegations," it said in a statement on
Financial products are an important area for Safaricom,
whose mobile phone-based money transfer service M-Pesa accounted
for revenue of 10.43 billion shillings ($121.5 million), or a
sixth of the total, in the first half.
The M-Shwari service allows users to save and borrow from a
local bank using their mobile phones and is a step-up from
M-Pesa, which was launched in 2007.
Launched with Commercial Bank of Africa (CBA) late last
month, M-Shwari has surpassed both firms' expectations, having
registered 600,000 users in the space of two weeks, Safaricom
(Reporting by Duncan Miriri; Editing by David Holmes)